Diagnostic Study of the June 30 Road Freight Sector – 2017 Draft Final Report Towards Greener and This document contains the Draft Final Report of the More Efficient Logistics in Study on the Road Freight Transport Sector in Ukraine -submitted by Peter Krausz, Consultant Ukraine – a World Bank Project Draft Final Report Peter Krausz, Consultant 30 June 2017 Towards Greener and More Efficient Logistics in Ukraine: Diagnostic Study of the Road Freight Sector Draft Final Report Contents Executive Summary ................................................................................................................................. 5 Summary of Observations / Recommendations and Proposed Action .............................................. 5 Objectives ......................................................................................................................................... 2120 Outline of the Study .......................................................................................................................... 2120 Method of Work ................................................................................................................................ 2221 Main Stakeholders and Sources of Information .......................................................................... 2221 Data Needs and Processing ........................................................................................................ 2221 Methods of Data Collection: Internet, Interviews and e-Survey .................................................. 2322 Data Collection Problems ........................................................................................................... 2423 Study Team, Reports, Workshops .............................................................................................. 2625 On-going Reforms ............................................................................................................................. 2726 Transport Strategy ..................................................................................................................... 2726 Ukraine-European Union Association Agreement ....................................................................... 2928 National Law in Force ................................................................................................................ 3130 International Legal Framework .................................................................................................. 3432 Evolving Domestic Legal Framework .......................................................................................... 3735 Institutional Structure of Governing Bodies and Public Partners ........................................................ 4240 Organogram .............................................................................................................................. 4240 Policy Uncertainties ................................................................................................................... 4442 Lack of Competent Staff in Governing Bodies ............................................................................. 4442 Lack of a Representative Organisation of Domestic Hauliers ...................................................... 4543 Transport Demand Drivers – Production & Trade .............................................................................. 4644 Recent Economic Trends ............................................................................................................ 4644 Foreign Trade ............................................................................................................................ 5047 Domestic Trade.......................................................................................................................... 5148 Transport Network Geography and Main Features ............................................................................ 5350 Freight Transport Modal Split and Road Traffic Patterns .................................................................... 5552 International Transport .............................................................................................................. 5653 1 Draft Final Report Peter Krausz, Consultant 30 June 2017 Domestic Transport ................................................................................................................... 5754 Road Freight Transport Output by Form of Undertaking ............................................................ 5956 Domestic Road Transport by Main Commodities ........................................................................ 6057 Regional Distribution of Road Freight Transport Volumes (tons) and Performances (ton-km) ..... 6259 Most Frequented Roads ............................................................................................................. 6461 Most Frequented Border Crossing Points ................................................................................... 7067 Difficulties to Cross Borders ....................................................................................................... 7269 Structure of the Trucking Industry ..................................................................................................... 7471 Number of Operators and their Distribution by Size ................................................................... 7471 Features of Operated Vehicle Fleets .......................................................................................... 7976 Corruption – a ‘Social Disease’? ......................................................................................................... 8784 Informality in the Trucking Industry ................................................................................................... 8885 Own-Account Transport .................................................................................................................... 9087 Traffic Controls, Roads and Road Users ............................................................................................. 9289 Road side Checks and Inspection at Company Premises ............................................................. 9289 Overloading ............................................................................................................................... 9491 Transport Market Developments ....................................................................................................... 9693 Recent Trends and Expectations ................................................................................................ 9693 Chain Contracts ......................................................................................................................... 9794 Inter-company Indebtedness ..................................................................................................... 9795 Web-based Freight Exchanges ................................................................................................... 9895 Renewal of State-owned Capacities ........................................................................................... 9996 Fleet Development .......................................................................................................................... 10097 Costs and Tariffs .............................................................................................................................. 10298 Information from Interviews .................................................................................................... 10298 Tariffs of a Freight Exchange .................................................................................................. 103100 Cost Comparison with Other Modes ...................................................................................... 106102 Cost Distribution .................................................................................................................... 108103 Average Distances and Empty Runs ............................................................................................... 109105 Average Annual Mileage and Round Trip Distance ................................................................. 109105 Empty Runs............................................................................................................................ 110106 Labour Market Developments ....................................................................................................... 113109 Number of Employees and Salaries ........................................................................................ 113109 2 Draft Final Report Peter Krausz, Consultant 30 June 2017 Professional Driver Shortage .................................................................................................. 114110 Visa Restrictions .................................................................................................................... 117113 Supply of Qualified Managers ................................................................................................ 117113 Facilitation, Efficiency and ‘Greening the Industry’ ........................................................................ 118114 Facilitation ............................................................................................................................. 118114 Sustainability ........................................................................................................................