TIR Experiences

For a country with a very extensive land border, India does very little trade by road. Either roads do not exist or they are used in traditionally inefficient ways.

With the internal highway system of India -- at least the major arteries connecting the four main metropolitan cities of Delhi, Mumbai, Kolkata and Chennai-- getting upgraded to international standards, it is time for India and its neighbors to upgrade the international, cross-border road links also.

At present, road-based trade exists primarily between India and two of its neighbors: Nepal and Bangladesh. The systems are slow, inefficient, congested, and corrupt.

For example, in the India-Bangladesh road-based trade, these are some of the issues:

• Exporting a single shipment from India to Bangladesh via road often entails a border delay of up to four days. Ninety percent of this delay occurs in parking of trucks, customs clearance, and crossing of border. Another 10% of the delay is because of required unloading at Benapole.
• For the typical Indian exporter, these delays generate an auxiliary transaction cost of 10 per cent of the shipment value.
• These delays occur despite the widening of border approach roads, availability of customs bonded warehouses, and an Electronic Data Interchange (EDI) system. The EDI system, in fact, is non-operational most of the time.
• Adequate drinking water and restroom facilities do not exist at the border crossing.
• Vagaries of power supply and strikes cause further disruptions and delay.
• The Petrapole border crossing has a single gate for exports, imports, and passengers. This leads to long lines and congestion.
• With the trade balance is highly in India’s favor, trucks from Bangladesh carrying that country's exports to India have to give way to the Indian trucks carrying Indian exports and the waiting time on an average turns out to be 4 to 5 hours, especially for Bangladeshi trucks.
• Bangladeshi trucks are not allowed to ply on the Indian side, and there is no customs bonded warehouse for Bangladesh exports entering India. Therefore, immediate transshipment of merchandise from Bangladeshi to India trucks becomes necessary.
• There is no well-designed transshipment facility. The actual transshipment occurs in a vacant lot that becomes muddy during the rainy season.
• Perishable goods often get damaged due to such border crossing and transshipment delays, especially during the wet monsoon season.
• Bangladeshi exporters using road-based methods face harassment at the hand of Indian border officials, despite a typical transfer of about US$10 as a bribe for each crossing. This prompts the Bangladeshi exporters to favor the more expensive but less bureaucratic air route. The general impact is to dampen the enthusiasm of Bangladeshi exporters for the Indian markets.

This state of affairs stands in stark contrast to EU road borders with the neighboring countries. Using the TIR Carnet system, trucks cross the international borders quickly, with at most a quick inspection of the customs documentation and the TIR seal.

If South Asia can adopt even the simplest form of such system, the resulting efficiencies and gains in trade and income would be enormous. With the addition of more sophisticated systems, such as the electronically monitored "green lane" between Hong Kong and Mainland China which allows trucks to roll through without stopping at the border, the impact on South Asian and Southeast Asian trade would be phenomenal.

Business groups and governments need to act quickly and cogently to replicate, adapt, and implement the best-of-breed international road transport systems across South, Southeast, and East Asia.

Nik Dholakia
University of Rhode Island

What has a truck carrying finished lumber from Turkey to Kazakhstan and crossing the Termirbaba border check post at the Turkmenistan-Kazakhstan border have to do with the basement of a nondescript office building of International Road Transport Union (IRU) in Geneva?

Plenty, if the truck crossed international borders using the TIR Carnet documents that are issued and ultimately managed by IRU.

These documents start -- and end -- in the office basement in Geneva.

Security-printed and numbered TIR documents arrive at this basement of IRU headquarters in Geneva and then get shipped to IRU affiliates in member countries.

The Turkish IRU office, assuming Turkey is the origin point of the truck we are talking about, receives these TIR Carnet documents. For a small fee, the Turkish IRU office issues it to a known and legitimate road transporter wanting to transport some lumber all the way from eastern Turkey to a construction project in Kazakhstan.

The originating office reports the issuance of the TIR Carnet to IRU. The customs-sealed truck with the IRU Carnet crosses multiple borders, with border checkpoints such as the one at Temirbaba reporting back to IRU in Geneva about the load and its associated TIR Carnet document having crossed that point. At the destination, after customs clearances, the TIR Carnet is retrieved by the IRU Kazakhstan office. Eventually, bundles of such TIR Carnets get shipped to IRU head office in Geneva, with the document completing its full cycle of journey that started in Geneva.

The used TIR Carnets are archived in Geneva and, in case of problems of disputes, the images of the documents or the documents themsleves can be recovered for appropriate action leading to the resolution of the problems.

Smooth, relatively seamless, fast, and secure road transport across national borders can occur when the TIR Carnet system works well.

While will established in Europe and its proximate nations for decades, the TIR Carnet system is practically nonexistent in Asia, with the exception of the CIS states.

It is time for the "unconnected" nations of East and South Asia to get on board with this system that has worked quite well for nearly half a century in Europe and its neighboring nations.

Nik Dholakia
University of Rhode Island