ASSESSMENT OF CARGO FLOW COVERING TRANSPORT OF AUTOMOBILES VIA TERRITORY OF LITHUANIA

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1 ENVIRONMENTAL ENGINEERING The 8 th International Conference May 19 20, 2011, Vilnius, Lithuania Selected papers ISSN print / ISSN online ISBN (3 Volume) ISBN (3 Volumes) Vilnius Gediminas Technical University, 2011 ASSESSMENT OF CARGO FLOW COVERING TRANSPORT OF AUTOMOBILES VIA TERRITORY OF LITHUANIA Aurimas Vilkelis 1, Mantas Kausylas 2 1 Dept of Transport Management, Vilnius Gediminas Technical University, Plytinės st. 27, LT Vilnius, Lithuania. 2 JSC Kelvista, Ukmergės st. 283, LT Vilnius, Lithuania. s: 1 aurimas@vilkelis.lt; 2 mantas.kausylas@kelvista.lt Abstract. The favourable geographical situation of Lithuania puts the country among the most important transit states between the European Union and the East. With availability of the ice-free seaport of Klaipėda, a welldeveloped road infrastructure and a broad railway gauge, the country enjoys competitive advantages in the development of transit functions of road and railway transport. Nevertheless, the Strategy of Distribution Network cannot be built on the basis of economic benefit alone, it is vital to take into consideration the global transport problems, such as extensive load on the road network and the subsequent negative environmental effects. The article provides an analysis of the transportation of automobiles via the territory of the Republic of Lithuania in In accordance to the results of the analysis, the article views the transportation of automobiles via Lithuania's territory as a separate transport system. For this purpose, the article identifies the main components of the automobile haulage system, methods and the factors that influence the intensity of transportation. A conclusion is drawn that the automobile haulage system features system marginal measures. Among the key marginal measures are system capacity, and exceeding the capacity would lead to negative effects upon the condition of the transport infrastructure and economic indicators. With the help of methods of simulation of cargo haulage and air pollution, an automobile carriage scheme with the lowest environmental effects is established. Keywords: road and rail transport, automobiles, cargo flow, economic value, ecological loss, route, haulage. 1. Introduction Without any automobile factories and a relatively small population, Lithuania is among the most outstanding countries in Europe in the respect of the automobile market. Lithuania's automobilisation level per resident is similar to that of France, the fleet of car transporters matched up to Germany in 2008, and the exclusively large sales market of used automobiles has served as a centre of attraction of buyers from Russia, later Kazakhstan and other Asian countries. Under the statistics provided by the International Trade Center, automobiles are the second commodity after oil products in terms of the value of cargo imported and exported by Lithuania (Trade Competitiveness Map: Analyse ). The indicators were largely influenced by rapid economic growth in Eastern countries. Comparing the automobile density per 1,000 residents in 2008, an average of 470 automobiles were reported in the European Union, as compared with 226 in Russia. Due to the relatively low level of automobile penetration and high fuel costs, Eastern countries, such as Russia, Kazakhstan, Belarus, Tajikistan, Kyrgyzstan, etc.; accounted for 16.2 per cent of automobiles exported from the European Union in 2008 (The Automobile Industry ). One of the key tasks of a transit country, which connects trade flows of the European Union, Russia and other countries of the CIS (Commonwealth of Independent States), is to ensure good relations between countries, facilitate adequate conditions for business development and protect the society against negative consequences. Price, time of delivery and reliability are the factors that decide clients' choice between types and ways of haulage. Therefore, foreign long-distance carriers have to optimise routes to the maximum and choose more attractive transit countries. In order to reinforce Lithuania's image as a transit country and attract cargo flows, it is vital to identify the existing situation of cargo haulage and assess environmental effects. Only with a proper and optimal automobile haulage scheme in place, it is possible strengthen the Republic of Lithuania as a transit country and eliminate and prevent results of subsequent negative effects. 2. Intensity of flows of automobile haulage via Lithuania Developing international trade and growing need for transport and transit services has transformed Lithuania into one of the most important countries in Europe, merg- 1235

2 ing Eastward traffic flows. A traffic flow consists of automobile imports, exports and automobile haulage transit via the territory of Lithuania. Fig 1 below indicates directions and volumes of haulage. The crossing point of flows near Kaunas is also the crossing point of trans- European transport corridors I, IX D and IX B. However, this does not mean that all imports or exports flows concentrate there. Fig 1. Automobile haulage numbers (in units) and directions via Lithuania in Automobiles are imported into Lithuania in three directions, i.e.; by roads from the side of Poland and Latvia, and by sea transport to the Klaipėda seaport. An average of 10 per cent of automobiles imported in Lithuania come from the United States they arrive at the port of Klaipėda in containers. Due to a rather well-developed used automobile sales infrastructure and rich supply, Lithuania has been attracting buyers of used automobiles from Eastern countries for almost two decades. The fast-growing market has built demand for production and haulage services, which has led to emergence and development of transport companies. From Lithuania, automobiles are mainly exported to Kazakhstan, Belarus, Tajikistan and Kyrgyzstan. It is important to specify that automobile exports from Lithuania to these countries in 2008 made 75 per cent, 60 per cent, 96 per cent and 81 per cent of all imported automobiles, respectively. Meanwhile, exports to Poland, Latvia and Estonia was relatively low, reaching merely 4.2 per cent in 2008 (Trade Competitiveness Map: Analyse ). Because of restrictions applied by the state, complex documentation and high requirements of competences, CIS and Western European carriers are not duly prepared to provide the transportation services. Therefore, Lithuanian road transport companies enjoy competitive advantages in haulage from Western Europe to the East (Vilkelis 2009). The bulk of automobiles are transported in Lithuania by road transport, the figure stood at 88.1 per cent in 2007 (Transport and Communications 2010). Table 1 provides numbers of automobiles imported, exported and transiting from Kaliningrad to mainland Russia via the territory of Lithuania in Russia's international trade relations with Europe and other countries is one of the main factors, which influences volumes of international haulage. To protect its domestic market, every country has certain protective measures to prevent invasion of foreigners. Russia is not an exception, it has been working for years to keep its local automobile manufacturing market. The improving financial situation of the population naturally formed a need for higher-quality vehicles from the West. Considering the problems caused by the old age of Russia's automobile fleet, the country considerably raised imports duties on automobiles up to five years of age, however, the decision was one of the reasons that led to extremely high imports of brand-new cars. According to research of Russia's and CIS automobile markets carried out by Ernst&Young, the flow of imported new passenger cars exceeded 2 million cars in 2008, as compared with 2.8 million new automobiles sold in the country that year. The rapid growth of the automobile market caused auto- Table 1. Numbers imported, exported and transiting automobiles via Lithuania's territory in (in units) Import to Lithuania Export from Lithuania Transit Kaliningrad-Russia From To Through Germany Kazakhstan Lithuania France Belarus Belgium Russia Italy Tajikistan Netherlands Kyrgyzstan Switzerland Latvia UK Estonia Estonia Poland USA Uzbekistan Other Turkmenistan Total Total Total mobile factories of Volkswagen, Škoda, Nissan, Toyota 1236

3 Ford and General Motors in Russia to start operating at full capacity this year (Automotive market in Russia and the CIS. 2010). About 70 per cent of all automobiles imported to Russia make their way to the country via ports in Finland, 17 per cent arrive via Poland and the Baltic states, 10 per cent via Ukraine and another 3 per cent via the Trans- Siberian railway (Automotive market in Russia and the CIS 2010). The key criteria for the large transit flows via Finland include security, availability of storage services, predictability of the time spent on the route, frequent liner traffic between Central European and Finish ports, adequate-quality railway and road connections between Finland and Russia. Furthermore, the lowest haulage price is not the deciding factor when choosing a route, if this could cause a higher number of transport damages (Jumpponen et al. 2007). Competitive advantage of Lithuania as a transit country, as compared with Finland, is more modest. Infrastructure of the Klaipėda port is not equipped to serving large flows of new automobiles. Furthermore, the port does not have automobile terminals that would correspond to high requirements for reloading and storage. Absence of a connection between Lithuanian railways with the European-gauge railway network via Poland to Western Europe is yet another important factor, which limits transit flows. As Lithuania has a mutual border with the Russian Kaliningrad region, the country allows favourable conditions for cargo flows via its territory. This led to the decision of Kaliningrad's Avtotor automobile factory, which assembles various brands of cars, to transport its production as transit by railways via Lithuania (see Table 1) (Automobile production 2010). In the light of a few years of political decisions on unification of customs duties in Russia, Belarus and Kazakhstan, this exports direction is becoming a very important issue in respect to Lithuania. However, considering the special focus on infrastructure in Lithuania's transport and transit development strategy, flows of exported used cars from Lithuania to Eastern Europe is likely to be replaced by transit of new automobiles in the future. 3. Creation of an Experimental Model of Cargo Haulage The experimental model of passenger car haulage was built on basic fundamental economic theory on a macro modelling scale. These provisions allow examining the communication transport system of the Republic of Lithuania under market conditions. In the experimental model, the Republic of Lithuania's network of sea, railway and automobile roads and cargo stations consisting of links, connecting knots and related costs serve as the demand force. The costs are described by functions, which consist of variables link performance parameters (distance, cargo haulage speed, infrastructure capacity, taxes, travel costs dependence of traffic intensity). Meanwhile, the demand force was evaluated by the number of trips between pairs of transport districts (shipping country and receiving country) and infrastructure service level, which corresponds to the type of transport. The load level of transport infrastructure is expressed through travel time, financial costs (highway tax, fuel costs) and are summarized with the characteristics of infrastructure services. It was established that in cases when the service level offered by the infrastructure of the road transport network is lower than the calculated one, the infrastructure demand decreases, i.e.; existing demand is satisfied by other types of transport (railway or sea transport) and routes (Ortúzar et al. 2005). This principle of model operation can explain the tendencies of car haulage to countries in Central Asia by railways. The model of haulage of passenger cars was created, using four interrelated sub-models: 1. haulage generation sub-model (automobile manufacturing and sales sub-model providing forecasts of future haulage numbers); 2. sub-model of haulage distribution by countries (model of passenger car haulage routes, which evaluates automobile haulage numbers between shipping country and receiving country); 3. sub-model of haulage distribution by types of transport (the sub-model is intended to identify the type of transport (sea, road or railway); 4. sub-model of haulage distribution on road network (sub-model intended to identify haulage roads). A model recalculation algorithm was applied to balance out the transport system. Balance is achieved by approximation, using the model balance algorithm. 4. Evaluation of Flows of Automobile Haulage via Lithuania To evaluate the flows of passenger car haulage via the territory of the Republic of Lithuania, a comparison of haulage by automobile roads and railways was made. Numbers of automobile haulage via the territory of the Republic of Lithuania in 2007 was used for travel generation and distribution in both automobile road and railway infrastructure. The cargo haulage numbers were calculated in accordance to the following presumptions: 8 passenger cars are transported in the car-transporter that meets EURO 3 requirements by automobile roads, 250 automobiles are carried on a train of 25 cars (10 automobiles on each of the double-layer cars). According to cargo flows and volumes provided in Fig 1, the experimental evaluation envisages a condition of restriction that imported cargo is transported from Lithuanian border checkpoints to Kaunas and from Kaunas exported cargo are carried to the Belarusian border. Different routes were chosen for the transit flow from Kaliningrad: Kybartai- Medininkai for road transport and Kybartai-Kena for railway transport. Road transport vehicle user fee, size of which depends on type and class of vehicle and is differentiated by the duration of driving on top-category roads, was applied for calculation of economic benefits of passenger car hau- 1237

4 lage by automobile roads. Cargo vehicles and their compounds with total weight of up to 40 tons are required to pay a tariff of LTL 20 per day (Transport means owner's ). Railway tariffs for using the public railway infrastructure consists of the initial payment per train kilometre and the final payment for gross one tonnekilometre, which is applied to railway companies carrying cargo. In 2007, the initial fee amounted to LTL , , per train kilometre, and the final fee in 2007 was set at LTL 0.162, , per tonne-kilometre (Charges for use of public ). Results of evaluation and calculation of tariffs applied in Lithuania for the use of road and railway infrastructure are provided in Table 2. Table 2. Road and rail cargo flow and size of fee for use of infrastructure Road cargo flow, per annum Route Distance, km. Number of trains Infrastructure charge Kalvarija Kaunas Klaipėda Kaunas Kybartai Medininkai Saločiai Kaunas Kaunas Medininkai Total Rail cargo flow, per annum Route Distance, km. Number of car-transporters Road tax charge Kalvarija Kaunas Klaipėda Kaunas Kybartai Kena Saločiai Kaunas Kaunas Medininkai Total COPERT4 automobile gas emissions calculation model, which has been generated in accordance to EMEP/CORI- NAIR emissions inventory guidelines, was applied for evaluation of economic losses of passenger car haulage by automobile roads. CO 2 equivalent units were used for calculation of automobile gas emissions (Baltrėnas et al. 2008; Vaitiekūnas and Banaitytė 2007). Economic losses of automobile haulage by railway transport were evaluated in accordance to EMEP/CORI- NAIR emissions inventory guidelines. CO 2 equivalent units were also applied for emission assessment. According to HEATCO data, emission amounts (CO 2, tonnes) established by way of calculations were expressed in monetary units (LTL) (Developing Harmonised 2004). The economic losses are presented in Table 3. Calculations found that the economic loss incurred from automobile haulage by automobile roads on the routes Kybartai-Kena, Klaipėda-Kaunas and Saločiai- Kaunas is higher than the economic revenues collected from the road transport vehicle user fees. Also, dependence of the economic loss generated by one cartransporter on the length of car-transporter s route Table 3. Economic value of automobile haulage by automobile roads Economic value of car transportation by road transport Route Kalvarija-Kaunas Kybartai-Medininkai Klaipėda-Kaunas Saločiai-Kaunas Kaunas-Medininkai Total Emission (CO 2), t Economic loss, LTL The economic value of the revenue loss, LTL Economic value of car transportation by rail transport Route Kalvarija-Kaunas Kybartai-Kena Klaipėda-Kaunas Saločiai-Kaunas Kaunas-Medininkai Total Emission (CO 2), t Economic loss, LTL The economic value of the revenue loss, LTL in the territory of the Republic of Lithuania was established and found that economic losses of one cartransporter, which meets EURO-3 requirements, exceed the LTL 20 road fee after covering a distance of over 140 kilometres (Fig 2). 1238

5 30,00 25,00 20,00 15,00 10,00 5,00 0,00 LTL / km State revenues from highway tax, LTL Ecologic losses caused by CO? emissions, LTL Fig 2. Dependence of economic loss upon the length of the car-transporter's route 5. Conclusions 1. The long-introduced idea of free market, ignoring the principles of consistent development, created ideal conditions for the transport system to evolve to a highly unbalanced system with overfilled types of transportation with negative environmental effects. The passenger car haulage sector examined in the article is not an exception 88.1 per cent of automobiles were carried via Lithuania by automobile roads in The article identifies the main factors that regulate the supply of the transport system: infrastructure capabilities (time of haulage, size of fee for use of infrastructure (highway tax) and factors of the transport system supply, namely: indicators of economic operations of countries selling and buying automobiles, geopolitical solutions (customs, restrictions of automobile sales and operations, taxes). 3. Surveys have found that automobile haulage is dependent on the economic price of the transport infrastructure (price for the use of infrastructure and haulage time). The largest volume of automobile haulage by roads can be explained by the shortest time of shipping and a lower price for infrastructure use. 4. Improvement of the supply/capacities of railway and sea transport infrastructure (construction of the European-gauge railway Rail Baltica in the South- North direction and construction of additional terminals at the Klaipėda port) is expected to reduce the usage of automobile roads for haulage of passenger cars. 5. A comparison of automobile haulage by highways and railways by principles of cost-benefit analysis has shown that shipping passenger cars by roads is economically detrimental, as ecologic costs alone expressed in CO 2 emissions units exceed the economic benefit that can be received from the fee for the use of transport infrastructure (highway tax). 6. Evaluation of highway taxers for the use of transport infrastructure shows that carriers who haulage automobiles by highways via the territory of the Republic of Lithuania for more than 140 kilometres does not compensate the economic damages he causes to the country by emissions of air pollution. References The Automobile Industry Pocket Guide European Automobile Manufacturers Association. Available on the Internet: < 924_Pocket_Guide_2nd_edition.pdf>. Jumpponen, J.; Märkälä, M.; Arposalo, A.; Liedes, M Project summary. TRAKET Competitiveness of transit chains. Available on the Internet: < et/ _traket_yhteenveto_eng.pdf>. Ortúzar, J. D.; Willumsen, L. G Modelling Transport. John Wiley and Sons p. Transporto priemonės savininko ar valdytojo naudotojo mokesčio dydžiai [Transport means owner's or manager's user's charge rates] Available on the Internet: < =254521>. Rinkliavos už naudojimąsi viešąja geležinkelių infrastruktūra [Charges for use of public railway intrastructure] Available on the Internet: < inter3/dokpaieska.showdoc_l?p_id=336962&p_query=d %CBL%20rinkliavosS%20u%de%20naudojim%c0si%20 vie%d0%c0ja%20gele%deinkeli%d8%20infrastrukt%dbra %20%c1mok%d8%20tarif%d8%20nustatymo&p_tr2=2>. Vilkelis, A The importance of getting international permits for road transport sector. Science Future of Lithuania (Transport Engineering), 1(6): Automotive market in Russia and the CIS Ernst and Young. 13 p. Available on the Internet: < blication/.../automotive /automotive-2010-en. pdf>. Vaitiekūnas, P.; Banaitytė, R Modeling of motor transport exhaust dispersijon. Journal of Environmental Engineering and Landscape Management, 2007, 9(1): Производство автомобилей [Automobile production] Avtotor. Available on the Internet: < ru/about/top_position.html>. Transportas ir ryšiai [Transport and Communications] Statistikos departamentas [Statistics Department]. Available on the Interenet: < pages_list/?id=1123>. ISSN: Developing Harmonised European Approaches for Transport Costing and Project Assessment (HEATCO) Available on the Internet: < Trade Competitiveness Map: Analyse Country and Product Competitiveness with Trade Flows (database) [online] International Trade Centre [cited 12 January 2011]. Available from Internet: < countries.htm/>. Baltrėnas, P.; Vaitiekūnas, P.; Vasarevičius, S.; Jordaneh, S Modelling of motor transport exhaust gas influence on the atmosphere. Journal of Environmental Engineering and Landscape Management, 16(2):