37 Transport Ministers and other high-level government representatives signed on 26 February, 2013 in Geneva – on the occasion of the 75th jubilee session of the Inland Transport Committee serviced by UNECE - a Joint Declaration that could pave the way towards negotiation of a unified railway law (URL) making rail freight transport first between Asia and Europe, and later in the whole world easier, faster and cheaper. The Declaration contains the commitment of countries along Euro-Asian rail transport lines to work together to establish unified legal conditions for railways that are equivalent with those existing already for many years for other modes (road, air, inland water and sea).
The current situation
Countries such as Bulgaria, Georgia, Islamic Republic of Iran, Lithuania, Romania, Russian Federation, Ukraine etc. (countries in green on the map) are currently obliged to operate with two different legal systems. Due to this multiplicity, these countries and eventually all countries without a harmonised legal and administrative system for international rail freight spend additional time and incur higher costs. The process is further hampered by other administrative obstacles and by high probability for mistakes and errors, which in turn can be translated in further delays, and potentially by the possible return of cargo back to customs.
The value of the Declaration
Standard legal objectives, principles and operational rules would allow transport of cargo and containers by rail across countries with a single transport contract, a single consignment note and under a single liability and claims system. It would thus provide railways with new options to reach out to transcontinental traffic and to turn Euro-Asian transport market opportunities into rail business.
The Declaration also calls on interested railways to work out optional model rules, i.e. general terms and conditions for Euro-Asian rail transport contracts (GTC EurAsia) that would provide a contractual bridge between the present two different legal railway regimes: COTIF-CIM in Western Europe and SMGS in Eastern Europe, Central Asia and China and that would be a significant further development of the successfully introduced temporary arrangement for common CIM-SMGS consignment note
Under the auspices of UNECE and in cooperation with UNESCAP, legal experts from all interested Governments, international organizations, such as OSJD, OTIF, CIT, UIC and the transport industry will meet in 2013 and 2014 to work out the required mechanisms and legal provisions. It is expected that the adoption of an international legal instrument could become applicable world-wide.
The Euro-Asian Transport Linkages (EATL) study launched on the occasion of the Ministerial Meeting shows : “while maritime transport is cost-effective, in most cases shipment takes up to 30 days through the standard routes. Rail is a very viable alternative for Euro-Asian freight transport because it is twice as fast as maritime transport. The unification of railway law could be particularly essential for the economic progress of many countries, particularly with regard to international trade and seamless railway transport. This is especially the case between Europe and Asia, where trade continues to grow exponentially, while seaports on both continents are approaching saturation. The Unified Railway Law would bridge the two existing legal regimes with optional contractual rules for Euro-Asian rail transport.
Countries which must operate with different rail legal regimes suffer from the same operational inefficiencies as landlocked countries, despite having access to sea ports. For landlocked countries, the operational inefficiencies become even higher when they have to operate with two or sometimes three or four different rail legal regimes. With the extra staff and time required to process cargo, forwarding companies operating under such circumstances incur costs that are 10-15 per cent higher and spend 15 per cent more time than those who only need to deal with one legal regime.
The application of the Unified Railway Law will eliminate these inefficiencies by providing one, single consignment note and one rail legal regime, globally. Instead of operating with multiple or national legal regimes, countries will apply only one law. With no extra costs and no extra time, railways will become more competitive and markets will have an efficient and effective transport alternative.
Demonstration of political will to make a change
The Declaration on the Unified Railway Law was signed at the Ministerial meeting which took place during the 75th session of the Inland Transport Committee (ITC) of the United Nations Economic Commission for Europe (UNECE). The meeting was opened by Mr. Sven Alkalaj, Under-secretary General, Executive Secretary of UNECE, Mr. Gyan Chandra Acharya, Under-Secretary General and High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island States. The UN chiefs underlined the significance of railways in connecting countries and continents. The special needs of landlocked developing countries lend a political responsibility to transport operators and in particular to railways in improving their connectivity and minimizing the threat of being marginalized. Mr. Sergey Aristov, State Secretary, Deputy Minister of Transport of the Russian Federation delivered an opening speech and a presentation about the important role of Russia in transport between Europe and Asia, as well as about the vision of the Russian government on the unification of legal and administrative conditions for the railways. The Russian government’s strong political support for the unified railway law was matched by equally strong commitment by the Russian Railways. Mr. Vladimir Yakunin, president of JSC Russian Railways pointed out in his keynote speech that globalization and the need of customers speak strongly in favour of unification of the existing railway law(s). In November 2012 a container train between China and Germany, crossing Kazakhstan, Russian Federation, Belarus and Poland made a run with a common CIM/SMGS consignment note agreed between CIT and OSJD and clearly demonstrated advantages of having harmonized railway legislation. Mr. Yakunin welcomed the signing of the Declaration expressing his expectation that it will mark the new page in progress toward establishment of the unified railway law to the satisfaction of all actors - Governments, railway industry and its clients and potential customers.
Mr. Jean-Pierre Loubinoux, Director General of the International Union of Railways, UIC spoke about railways as a viable alternative to maritime transport. Travel by railway between China, through Russian Federation, to Europe takes between 18 and 23 days. By maritime transport it takes between 35 to 45 days, while combined sea-air travel on the same route takes about 22 days. The four key railway corridors between China and Europe pass through Russian Federation. Different gauge width, however, reduces to certain extent the apparent advantages in time and costs that the railways could offer to customers.
The Declaration signed by 37 Ministers and other high-level representatives is a testament to the political will which exists to establish the Unified Railway Law and, in parallel, provides the “rail map” for further actions towards this objective.
A new UN framework convention could be essential in eliminating non-physical obstacles which for years have impeded on railways’ competitiveness compared to other modes of transport. International rail transport is currently disadvantaged by non-harmonised legal regimes for international transport and by the practice of different types of consignment notes and varying liabilities. The Unified Railway Law (URL) could harmonize international rail transport the same way that air, maritime, road and inland water transport have been governed by international treaties for decades.
On the occasion of the 75th jubilee session of the Inland Transport Committee and the Ministerial Meeting as its policy segment, a CIT-OTIF-UIC—OSJD - UNECE inter-agency consultation meeting on railway policy issues, future cooperation and efficient implementation of the rail map that the joint declaration towards the unified railway law requests was held with the participation of the Secretaries General of the respective Organizations and the Director of the UNECE Transport Division.