Part III Full presentations Presentation 1

Hello, dear members of the state examination (qualification) commission!

I’d like to present my diploma research project. The theme is: The role of a transport component in providing external economic relations between the Sverdlovsk region and China.

Nowadays bilateral trade and economic relations between Russia and China are drastically increasing. It is expressed in high rates of growing goods turnover, activation of the interregional and frontier communication, appreciable strengthening of interest to mutual cooperation in Russian and Chinese business society. To maintain economic relations and development of international trade there is a necessity to create reliable transport communications.

The objective of this diploma project is to define the role of a transport component in the bilateral economic relations.

In order to achieve the objective it is essential to fulfill the following tasks:

First of all, to analyze the level of transport communication development between Russia and China;

Secondly, to investigate the level of bilateral economic relations development of Sverdlovsk region and China;

Thirdly, to characterize two basic schemes for foreign trade cargo transportation on Shanghai – Yekaterinburg route, to reveal their strengths and weaknesses, opportunities and threats for the company “Panalpina World Transport”;

And finally, to suggest the ways of improving transport support in bilateral relations between the Sverdlovsk region and China.

In the first chapter characteristics of railway, sea and mixed cargo transportations in China – Russia communications are considered. I’d like you to focus your attention on slide 3 that illustrates the fact that over the past six years the volume of goods exchange doubled due to direct railway communications.

In the second chapter the level of external economic relations development between China and the Sverdlovsk region is analyzed. The following factors are favorable for the development of economic and trade relations between Russia and China, China and the Sverdlovsk region:

• geographical affinity of the two countries

• common directions of economic reforms for both countries

• both nations are interested in acceleration of social and economic development

Let’s now look at the slide 5 which shows characteristics of transport operations between the Sverdlovsk region and China. What I’d like to point out here is that import from China to the Sverdlovsk region increased by 28% in 2005 – 2006. It should be also mentioned that China was the seventh trade partner of the Sverdlovsk region in 2006. The graph on slide 5 illustrates a dynamic development of foreign trade parameters between China and the Sverdlovsk region. You can see that both import and export have reached a high in the last 15 years. It is expected that import and export will reach the level of 290 and 300 million dollars respectively. The overall tendency for bilateral economic relations is forecast to be upwards.

In the third chapter the basic schemes of cargo transportations on Shanghai – Yekaterinburg route, used by the company “Panalpina” are characterized. Optimization schemes are suggested in the context of foreign economic relations activation between the Sverdlovsk region and China. For analysis we have used SWOT – analysis based on empirical knowledge, obtained during a work period for “Panalpina “company.

Let’s look more closely at the first scheme – the scheme of transportation by direct railway communication. From Shanghai to Manchzhuria cargo is transported in a Chinese rolling stock. When a train reaches the frontier transition point Manchzhuria – Zabaikalsk, the cargo is then loaded on the train of 1520 mm track. After cargo re – load a mode of national customs transit has to be registrated which allows import cargo to travel to the place of destination. After registration of this mode the cargo goes to the destination point. I’d like to highlight some disadvantages of the scheme illustrated on slide 8:

• the absence of cargo tracking system in China

• low carrying capacity of a frontier check-point

• the absence of shipment schedules between railway systems

• delays in providing information on re-load of import cargo into Russian railway cars

• the absence of storage areas for big consignments

• threats to rolling stock congestion at the check-point

• threats to railroad tariffs increase in this direction (Zabaikals – Yekaterinburg)

The second scheme is the scheme of sea transportation through Vostochny port and further in Russia along the Transsiberian Railway. When the cargo is discharged, registration of national customs transit mode begins. After that the cargo goes to the station of destination. You can see the following disadvantages and threats of this scheme on slide 10:

• the dependence of the scheme on geographical, navigation and weather conditions

• insufficient capacity of cargo handling areas in Vostochny port and at Vostochnaya – export railway station

• threats for congestions of containers to be loaded

• threats for railroads tariffs increase in the direction Vostochny – Yekaterinburg.

The SWOT – analysis of the two schemes allows to make a conclusion that any scheme is not exceptional. As a rule, the given schemes should supplement each other. The preference of any of them should be based on real situations arising in Shanghai and Vostochny ports. For a forwarding company, there is no sense to vary the preferences of choice in transportation schemes. The option of using both schemes in a different ratio is optimum. For participants of the external economic relations monitoring of conditions and quality of transport support is an essential requirement to succeed. It can also help plan business operations correctly. The role of a transport component in this case is proved.

Some ways to solve the problems of transport support in bilateral economic relations are listed in slide 11. Suggested ideas could be valuable not only for the company “Panalpina” but for other participants of external economic relations as well.

In the section “Safety and ecological compatibility of the project” basic parameters of organization of transport operator’s workplace are given.

Thank you very much for listening. I am happy to take any questions if you have any.