LAND TRANSPORT SERVICES-Part 04

(ii)                 Interurban passenger transport

19.                  Interurban passenger transport is mainly supplied by coaches, and marginally by taxis whose regime was briefly examined above.  This sector is characterized by poor economies of scale and low access costs.  Sector concentration is very uneven depending on the country.  It is low in developing countries and countries such as France or Australia.  On the other hand, it is very high in the United States and in the United Kingdom, where in both cases a quasi-duopoly has been replaced by a quasi-monopoly (Greyhound in the United States, National Express in the United Kingdom) following the buyout of the principal competitor.[1]

20.                  In this competitive situation control of coach stations and terminals has been a decisive factor.  These stations are given separate mention in the CPC road transport classification and it is possible to imagine rules on access to and non-discriminatory use of this infrastructure being developed, where necessary, along the lines of those which already exist in maritime transport and, to a lesser extent, in telecommunications and might also be introduced in rail transport or indeed in connection with the allocation of slots in air transport.

21.                  Although it has often taken over from the railways when loss-making lines have been closed, the sector appears to be in long-term decline due to the steady increase in private car ownership.  It is also symptomatic that a large proportion of its customers do not themselves own cars (young people, the elderly).

22.                  Interurban passenger transport covers transport of several types: regular services (providing passenger transport accessible to all over a specified route according to a timetable for a set fare with passengers being picked up and set down at predetermined stopping points), shuttle services (organized transport of previously formed groups of passengers, by means of repeated outward and return journeys, from a single place of departure to a single destination) and occasional services which do not fall within the definition of either a regular or a shuttle service.

23.                  Occasional services and shuttle services are generally run as purely market activities (although in international traffic they are often required to operate within a certain regulatory framework), whereas regular services are more strictly regulated and sometimes operated by a public authority (the Swiss postal buses, for example) or under a concession arrangement.  This is because local regular services, especially in rural or mountain areas, are not always profitable and therefore can only be financed by equalization (cross subsidization) or by subsidies.

24.                  As in road transport, the regulations mainly go back to the '30s and were inspired by the same concern to limit competition with the railways (hence the rules on prices, entry, withdrawal and sometimes on numbers and services) and to obtain assurances with regard to the reputation and solvency of the carrier, the safety of the vehicle and the observance by the drivers of the driving and rest periods requirements to which must be added, in the case of regular services, public service regulatory considerations:  networks, timetables, and access to transport for people living in remote areas.

25.                  These sectors, too, have experienced partial internal deregulation, for example in Great Britain the liberalization of long-distance passenger transport in 1980 and local (in some cases interurban) services in 1985, the partial liberalization of passenger transport in Sweden (1989) and in the Netherlands (1988), and the American deregulation of the "Bus Deregulatory Reform Act" of 1982 which reduced the tariff-setting powers of the Interstate Commerce Commission up to 1996 and then those of its successor the Surface Transportation Board (carriers are still required to file tariffs but the STB may not suspend the rate unless it is shown to be predatory or discriminatory).[2]

26.                  In interurban passenger transport, the World Bank has focussed on reducing the barriers to the informal supply of transport and on devising effective subsidy programmes for the "social service" of public transport by defining public service obligations and establishing fiscally sustainable contractual compensation arrangements.[3]

27.                  The effect of this internal liberalization has been a reduction in prices, a reduction in wages, a fall in profits and an in increase in employment.  The effect on traffic has been extremely varied, partly because it depends on external factors such as intermodal competition.  Thus, in the United Kingdom traffic almost doubled in five years, rising from 9 to 15 million passengers, before falling back almost to its initial level after another five years.  Similarly, in the United States deregulation increased the number of carriers and led to sharp growth in the areas of charter and tour or special operations, whereas regular route traffic experienced a decline.

28.              Most interurban trade takes place within the frontiers of a single State and thus mainly involves the commercial presence mode.

29.              The international traffic is by nature intra-continental and dominated by links between areas at different levels of development (for example, from North Africa and Southern Europe to Northern Europe for immigrant workers, from Eastern Europe to Western Europe for tourists), since it provides a cheaper alternative to rail or private car transport.

30.              This international traffic is generally regulated by bilateral agreements which establish tariffs and quantitative restrictions and divide the traffic between the two States concerned. It too has begun to be liberalized, mostly at the regional level.  Thus, in the European Community, shuttle services, occasional services and cabotage were liberalized in the context of the construction of a single transport market.  Similarly, passenger transport was included in the model bilateral agreement of the European Conference of Transport Ministers which brings together the countries of Western Europe, on the one hand, and those of Central and Eastern Europe, on the other.  This model bilateral agreement[4]constitutes a first step towards the multilateralization of bilateral agreements and endeavours to limit the number of cases in which authorization is required and to extend the period of validity of authorizations (up to five years).  Similarly, passenger road transport falls within the scope of NAFTA, with limited reservations mainly concerning cabotage traffic.

31.              Modes 2 and 4 do not seem to have any real relevance for this sector.

32.              Apart from the general barriers to road transport (see paragraphs 52 to 59), the transport professionals represented by the International Road Transport Union have only identified one barrier specific to passenger transport:  the bans and restrictions on coach movements and parking in cities and tourist centres.[5]

(b)               Freight transport

33.              Clearly, freight transport by road is the principal mode of freight transport:  in the European Community its modal split share is 72.3 per cent (1995, in tonne/kilometres) and increased by 155 per cent between 1970 and 1995, i.e. almost tripled in volume, whereas during the same period rail transport recorded a decline in absolute value (-22 per cent) and a halving of its share.  Road transport takes a smaller share of the modal split in the countries of Central and Eastern Europe:  41.5 per cent in 1995, but there also it is progressing, whereas rail transport is in decline.  In the United States the modal split share is even smaller:  28.9 per cent, whereas railways still account for 40.9 per cent of the tonne/kilometres transported;  however, in value terms, transport represents about 80 per cent and in volume terms its rate of growth (+123 per cent between 1970 and 1995) is very much higher than that of rail transport (+70.6 per cent).[6]

 

34.              Freight transportation by road also plays an essential role in the developing countries, particularly in those which did not develop an extensive rail network during the 19^th century and at the beginning of the 20^th century (generally speaking, this applies to Latin American countries and African countries lacking cross-rail links).

35.              In the absence of detailed traffic statistics, one way of estimating the relative importance of the different markets worldwide is to compare the numbers of trucks duly registered in the various countries.  Altogether, Africa has 5.62 million goods vehicles, or 3.33 per cent of the total (the largest fleets being in South Africa:  1.73 million, in Egypt:  1.28 million, in Algeria:  0.87 million, in Zaire:  0.55 million, in Libya:  0.31 million, in Tunisia:  0.28 million, and in Morocco:  0.27 million), America has 80.43 million goods vehicles or 47.64 per cent of the total (United States:  65.46 million, Mexico:  4.22 million, Canada:  3.72 million, Brazil:  2.76 million, Argentina:  1.23 million, and Chile:  0.81 million), Asia has 45.22 million goods vehicles or 26.8 per cent of the total (Japan:  21.93 million, China:  6.22 million, Thailand:  4.13 million, South Korea:  2.65 million, India: 2.2 million, Indonesia:  2 million, and Saudi Arabia:  1.17 million), Oceania has 2.63 million goods vehicles or 1.56 per cent of the total (Australia:  2.24 million and New Zealand:  0.35 million), the whole of Europe has 34.78 million or 20.6 per cent of the total, including 22.99 million for the European Community (France:  5.25 million, Germany:  3.74 million, Spain:  3.48 million, United Kingdom:  3.19 million, and Italy:  2.88 million), 5.01 million for the Russian Federation, 1.79 million for Turkey, and 1.47 million for Poland.[7]

36.              These figures should be deflated by deducting the proportion of the fleet used for transport on own account, a proportion which varies from country to country depending on the organization of the sector (for example, in the member countries of the OECD it is between 40 and 60 per cent).  They also give a better picture of the size of the domestic market in each country than of the international traffic.  Thus, the Netherlands with a fleet of 680,000 goods vehicles does not appear in this brief summary although it is one of the biggest players on the European international transport scene.