LOGISTICS OF EXPORTING TO EURASIA SERIES
Tajikistan:
Transportation, Distribution and Warehousing Services
November 2006
Author: Jamshed Rahmonberdiev, Bisnis Representative in Tajikistan
INTERNATIONAL
COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND U.S. DEPARTMENT OF STATE,
2006. ALL RIGHTS RESERVED FOR USE OUTSIDE OF THE UNITED STATES.
Summary
The objective of this report is to
provide U.S. companies with an overview of transportation and logistics
infrastructure, major projects and potential market opportunities in
Tajikistan. The information provided will be useful, not only to exporters of
physical goods who include domestic distribution in their business model, but
to all exporters and investors who are assessing market potential, operational
costs and other data needed for project feasibility studies.
1. GENERAL MARKET OVERVIEW
1.1
U.S.-Tajikistan market Trade
a) U.S.-Tajikistan trade
statistics
Table 1: U.S.-Tajikistan
Trade in Goods, in millions of U.S. dollars
|
|
2006* |
2005 |
2004 |
2003 |
|
Export, $ mln |
31.0 |
28.9 |
55.9 |
50 |
|
Import, $ mln |
60.6 |
241 |
7.2 |
7.2 |
|
Total |
91.6 |
269.9 |
63.1 |
57.2 |
* Data is from January to September
Source:
U.S. Census Bureau, www.census.gov
b) Percentage share of Tajikistan in the overall U.S. trade flows to the NIS region - insignificant
c) U.S-Tajikistan trade flow composition by commodity type and/or mode of transportation.
From 2001 to 2005 average
annual U.S. exports to Tajikistan totaled $39 million, included mostly pharmaceuticals,
medical supplies and wheat and were exported under U.S. government assistance
programs. Export of goods for
commercial purposes is minimal, except for equipment and supplies for the
telecommunications sector.
1.2 Transport Infrastructure
Tajikistan is a land-locked country; its transport infrastructure was constructed in the 1960s and 1970s to integrate Tajikistan into former Soviet Union trade. Due to geographical landscape (93% of the territory is mountainous), Tajikistan’s trade routes are highly concentrated, and depend on transit through Uzbekistan. Shanghai is some 4,800 km away -- the Pamir mountain range separates Tajikistan from China. According to an Asian Development Bank study, transport from seaports to Tajikistan ranks with some of the longest distance in the world.
According to a World Bank study, current road transport accounts for less than 5% (both weight and value) of Tajikistan’s international transport. In part, this is due to the availability of relatively smooth and inexpensive rail transit through Uzbekistan that is used for bulk shipments of alumina, aluminum and cotton.
Tajik-Uzbek visa requirements make it almost impossible for cars with Tajik license plates to enter Uzbekistan. After obtaining all necessary papers, vehicles are subjected to extensive and unpleasant search at the border.
Non-Tajik-registered trucks traveling between Uzbekistan and Tajikistan also face high costs and many other barriers. Border crossing procedures are difficult. According to experts, many trucks leave Tajikistan empty, despite the demand for truck transport. Although all Central Asian Countries have joined the TIR System (an international system designed to facilitate trade), it is poorly implemented and not respected in transit countries. There are few Tajik trucks that satisfy TIR technical requirements.
According to an Asian Development Bank (ADB) report, the intermodal transportation system in Central Asia is slow to develop due to the following reasons:
· Lack of equipment to handle ISO containers outside of a limited number of major terminals;
· The rail tariff system sets high price on container transport;
· Limited demand patterns for regular two-way movement of full containers;
· The border crossings which interfere with the organization of fast container movement; and
· Inefficient regulations and business practices.
The same reports also studied disharmony and complications related to transit fees on road transport. While these are irrelevant to U.S. business, they seriously affect the total logistics cost of doing business in Tajikistan. Additional information is available from the BISNIS representative.
Tajikistan’s railway network is only 950 km long (consisting of two sections – one in northern Sughd, and one in southern Khatlon, - not connected to each other directly). The railway has a wider track gauge, while China, Iran and other European networks have a standard gauge track. Trans-shipment of freight takes place at Turkmen/Iranian border (Zamyn Uud, Dostik, and Saraks).
· Railway
· Length: 950 km
· Rail network: is not extensive
· Rail mode share for freight transport: 70% (2001)
· Airway
· Number of airlines with flight to Tajikistan: 23
· Cargo flights: None
· Major airport is located in Dushanbe:
o Built in 1960
o Traffic capacity: 200 passengers/hour
· Roads
· Length: 26,000 km
· Total number of registered vehicles is approximately 200,000.
· Major roads are accessible only during certain months of the year.
· Domestic road network is poor, making year-round logistics a challenge.
· Road map: http://www.traveltajikistan.com/maps/roadmap.jpg
Central Asia Regional Transport Map
http://www.adb.org/Documents/Reports/CAREC/Regional-Transport-Corridors/transport-corridor-map.pdf
Major border crossings of Tajikistan
1. Sulokta (Kyrgyz Republic)
2. Murgab (Kyrgyz Republic)
3. Jirgital (Kyrgyz Republic)
4. Tursunzade (Uzbekistan)
5. Penjikent (Uzbekistan)
6. Ura-tube (Uzbekistan)
7. Bulok (Uzbekistan)
8. Ishkashim (Afghanistan)
9. Aivadzh (Afghanistan)
10. Kulma Pass (China)
Transportation Infrastructure Map:
1.3 Market peculiarities
Administratively, Tajikistan is subdivided into
five regions:
1.
City of
Dushanbe, the capital;
2. Districts of Republican Subordination (DRS);
3.
Sughd Province
in the north separated by mountains from the rest of the country;
4. Khatlon Province in the south, located in the valley;
5. Mountainous and sparsely populated Gorno Badakhshan Autonomous Region (GBAO) in the east.
1.4 Major Infrastructure Development Projects
· The rehabilitation of a road from Dushanbe via Kulyab to Gorno Badakhshan and on to the Chinese border. The approximate cost of the project is estimated at $290 million. Improved road conditions on this route would help to better integrate the GBAO region with a population of around 200,000 into the Tajik economy. It would also improve access to China.
· The rehabilitation of a road from Dushanbe to the Rasht valley and on the Kyrgyz border. The estimated project cost is $110 million. This road would help better integrate 430,000 people in the Rasht Valley into the Tajik economy and provide access to Kyrgyzstan and further on to China.
· The rehabilitation of the route between Dushanbe and Khujand plus the construction of the Anzob and Sharkhristan tunnels will make this route passable in winter. Estimated project cost $360 million. The Anzob tunnel is already under construction, completion date is unknown. The year-round link between the two major economic centers of Tajikistan Khujand in the north and the capital Dushanbe will have substantial benefits by reducing the cost of transport and the seasonality of transport costs.
· The U.S.-funded bridge across the Amu Darya river at Nyzhni Pyanzh. Some 1,000 trucks will be able to cross the bridge on a daily basis once completed in late 2007.
2. PRIMARY TRANSPORTATION MODES
According to the Tajikistan Trade Diagnostic study carried out by the World Bank, about 95% of total external trade tonnage is carried by rail. The ports of Poti in Georgia and Tallinn in Estonia are the main destinations for aluminum, the main export commodity of Tajikistan both by value and weight. The port of Riga in Latvia is also an important destination for Tajik cotton. Recently Tajikistan began transporting containers by rail to China (via Uzbekistan and Kazakhstan) with some 30 to 40 containers shipped per month. During winter when the Anzob road pass linking northern and the southern Tajikistan is closed, rail transit through Uzbekistan provides the main connection between the north and the south for passengers and cargo.
The majority of goods are delivered by rail and road, while the majority of inbound and outbound passenger traffic is via airline. Road connections dominate domestic transport connectivity. Due to geographical landscape, the northern part of Tajikistan is physically inaccessible by road from the south during winter times. The domestic road network needs serious repair; however, it is sufficient for transportation between regions.
Sughd
is located in the Ferghana valley and serves as an entry point for a
significant portion of Tajikistan’s imports.
Sughd and Dushanbe are considered to be the major commercial centers of
Tajikistan.
Tajikistan’s
Regions ranked by GDP, Population and Retail Turnover (2003)
Region
|
GDP |
Population |
Retail
trade turnover |
|||
|
Million
US$ |
% of
total |
million people |
% of
total |
million
US$ |
% of
total |
|
|
Sughd |
341 |
28% |
2.1 |
30% |
124 |
38% |
|
Khatlon |
308 |
25% |
2.2 |
35% |
42 |
13% |
|
RRS |
294 |
24% |
1.6 |
22% |
49 |
15% |
|
Dushanbe |
236 |
20% |
0.6 |
9% |
110 |
34% |
|
GBAO |
30 |
2% |
0.2 |
3% |
3 |
1% |
|
Total: |
1,553 |
100% |
6.7 |
100% |
328 |
100% |
Source: World Bank document, originally
cited State Statistics Committee
2.1
Rail
Rail carries about 90% of total external cargo shipment.
Tajik Rail can handle large-volume rail freight; its handling of small-volume consolidated shipments is inefficient.
According to experts, railroad transport through Uzbekistan costs between $25 and $35 per ton, or about $0.03 per ton-kilometer. However, rail transport typically involves additional informal payments to railway officials, longer transport times, and other inconveniences.
The existing railway network is poor; the capital is connected to major regions (Khatlon and Sughd) by a transit route through Uzbekistan. The Gorno Badakhshan region does not have a direct railway connection to Sughd; its railway connection to Dushanbe is through Khatlon.
2.2 Roads
Automobile transport is the main mode of domestic travel and freight shipment (road transport mode accounts for 69% of total freight (2005). Roads are in poor condition and snow and mud slides close important roads in winter. Road access to GBAO and the mountainous eastern part of RRS – Rasht – is particularly difficult. Most highways are two-lane. There are no four-lane highways.
The cost of transport per ton between Khujand and Dushanbe during summer, via the Anzob pass, is $13 per ton for the 340-kilometer trip. In winter, trucks need to take a long detour via Uzbekistan, costing $67 per ton for the 930-kilometer trip.
Transportation of goods within Tajikistan is challenging - proper paperwork must be in place. U.S. companies are encouraged to use local logistics and shipping companies listed in this report.
Cost of Cargo Transport between Dushanbe and Khujand
|
Alternative Routes between Dushanbe and Khujand |
Truck via Anzob without
snow |
Truck via Anzob with some
snow |
Truck via Uzbekistan |
Rail via Uzbekistan |
|
Distance (km): |
340 |
340 |
930 |
989 |
|
Time on average (hours) |
16 |
27 |
48 |
71 |
|
Cost per ton, $/ton |
13 |
23 |
67 |
25-35 |
Source:
Survey of truckers, Tajik Rail
According to a World Bank study, Tajikistan’s total logistics costs are among the highest in the world. Part of Tajikistan’s high logistics costs is a consequence of its remoteness.
2.3 Airways and Airports
3. TRANSPORTATION AND LOGISTICS SERVICES
Consolidated information on the number of shipping and freight forwarding companies is not available. Based on desk research, there are less than 10 companies, the majority of which are local. The distribution system is not developed, and the majority of trading companies have their own internal distribution systems. Retail sales are dominated by standalone open air shopping areas, commonly known as bazaars. These shopping centers do not meet international standards and are not well organized. Warehousing services are performed by standalone warehouses, and export-import storage warehouses licensed by the customs authorities. The latter are owned and operated by trading and manufacturing companies. Standalone warehouses are usually privatized or collectively owned. These warehouses typically have very primitive storage conditions and operations; new owners do not invest in facilities upgrades, such as, with fire alarms, fire safety, heating, ventilation, and perimeter security.
3.1 Shipping and Freight forwarding
There are
several freight forwarders operating in the Central Asia. Most of them are focused on railway
transport, and some operate in other modes as well. All freight forwarders have links with other international
forwarders; some forwarders in Tajikistan are members of the FIATA, the
international freight forwarding organization.
Globalink
Logistics
11 Behzod
Street, Apartment 6
Dushanbe,
Tajikistan
Tel: +992
(37) 221-7790
Fax: +992
(37) 221-7767
Email: Dushanbe@globalinkllc.com
http://www.globalink-logistics.com/taj.htm
Vavilon
Shipping Company
Headquarter
Office in Khujand
5 Syr Darya
Street
Tel: +992
(3422) 5-5497, 2-8681, 5-4143
Mobile:
+992(92) 777-8681
Fax: +992
(3422) 5-4143
E-mail: info@vavilon.tj
Universal
Marine Services LLC
1 Svobody
Street, Office 406-407
Novorossiysk,
Russia, 353900
Tel: + 7
(8617) 601-025
Tel: + 7
(8617) 601-308
Fax: + 7
(8617) 601-304
Email:
Mikhail.Bobryshev@earthlink.net
Email:
mbobryshev@umsnovo.ru
Email:
umsnovo@umsnovo.ru
Tajikvneshtrans,
JSC *
3
Yuzhno-obhodnaya Street
Korvon Market
Road
Dushanbe
Tajikistan
Phone: 992 37
231-4902
FAX: 992 37
231-9107
3.2
Distribution (wholesale/retail supply networks)
Some domestic manufacturers prefer direct supply channels to deliver their products to retail outlets based on “full vehicle” loads. Some manufacturers have internal distribution operation, which stores the produce and processes individual orders that are delivered to retail stores. This channel is popular among the water bottling, beverage and brewing industries.
Wholesalers, which usually act as intermediaries, provide the link between domestic and/or international producers and the smaller retail shops within a town or even a district. Wholesalers have a price advantage by buying in bulk from producers or suppliers. Wholesalers usually use their own storage area and rented vehicle fleets. Third-party distribution service to retail shops is not common in Tajikistan.
For non-packaged food items (fruits, vegetables, and other food products) a major retail network is an open-air bazaar, available in all major cities throughout Tajikistan. For packaged food items, a local company started to operate a network of five grocery stores united under the ORIMA brand. This company built and operates its own logistics center. Most of home appliances, and construction materials are sold in open-air markets, such as Sultoni Kabir market, located in Dushanbe, with more than 300 retails stores, and several thousand square meters of trading area. Ganjina and Korvon open-air markets are among the largest apparel outlets available in Dushanbe.
Useful resources:
Tekstilcontract
Trans Stroy, LLC (a small distribution company)
143
Nazarshoev Street
Dushanbe
734012 Tajikistan
Tel/Fax: +992
(37) 227-8497
Email:
niceman2004@bk.ru
3.3
Warehousing
Licensed Warehouses for Export-Import Operations
As of January 1, 2004 there are 63 warehouses licensed by the Customs authorities for export-import operations. The total area of these warehouses is approximately 105,200 square meters. The average size of a warehouse is 1,670 square meters. There are only five warehouses over 5,000 square meters; all located in Dushanbe area. All licensed warehouses are integrated into trading and industrial companies and do not operate as an independent warehouse service provider.
The Customs authorities maintain additional information including a list of licensed warehouses. This information is not available to the public.
Standalone Warehouses
As a result of privatization many standalone warehouses operate independently. There is no consolidated information on the number of warehouses, locations, size and the type of services they provide. According to local experts, most of these warehouses are utilized by trading companies engaged in the retail and wholesale of consumer goods, supplies and etc. Some warehouses are split and rented to small workshops (carpenters, metal workers, production of construction materials and etc.).
Readily available information on standalone warehouses is not available. Additional assessment would be needed to determine the quantity and characteristics of these warehouses. Such an assessment should include data examining functionality (long term storage, distribution, transfer, special purpose), assortment specialization (special, universal, mix), storage mode (heated, not-heated), technically equipped, type of warehouse (open air, closed, area with cover), etc.
Owning a Warehouse: Legal and Regulatory Framework
General activities of warehouses are governed by the Civil Code (Part II, Chapter 50). The Code defines the warehouse, its obligations, contractual arrangements, and warehouse documents.
U.S. companies would have to assess the possibility of
establishing a warehouse for their own needs.
Existing warehouses are below Class D requirements. Many warehouse owners have limited knowledge
about well-equipped and managed warehouses being an important part of a large
value chain cycle.
These warehouses do not have classification codes. According to local experts, they hardly meet minimum requirements for class “D” warehouses.
Because the market is not well developed, some local
companies create and own their own warehouses.
It is a significant capital investment, but in return companies have
greater security and control over the goods.
Owning a Warehouse: Design and Construction Cost
U.S. companies may consider two options of establishing a
private warehouse
·
Buyout or
create a joint venture with existing warehouse/terminal facility
·
Built a complete warehouse
According to a local Tajik-Swiss consulting and construction company, construction costs for a warehouse ranges between $500-600 per square meter (excluding equipment). The following table illustrates approximate project development costs for three types of warehouses:
|
Storage Purpose |
Size, square meters |
Cost, $m |
||
|
Design |
Building |
Total |
||
|
Food items |
<5,000. |
0.100 |
2.5-3.0 |
2.6 to 3.1 |
|
>10,000 |
0.145 |
5.0-6.0 |
5.145 to 6.145 |
|
|
Non-food items |
<5,000. |
0.075 |
2.5-3.0 |
2.575 to 3.075 |
|
>10,000 |
0.100 |
5.0-6.0 |
5.1 to 6.1 |
|
|
Multi-purpose |
<5,000. |
0.088 |
2.5-3.0 |
2.588 to 3.088 |
|
>10,000 |
0.128 |
5.0-6.0 |
5.128 to 6.128 |
|
Note: costs are indicative,
based on external and internal factors actual costs may vary
The table above does not include fire protection systems, handling equipment, staff and information management systems. These items are not available in Tajikistan, and would have to be sourced and imported as necessary.
Project development takes up to six months depending on the complexity of the design. Actual construction works can take somewhere between 18-20 months. Project development costs are approximately two to four percent of the total cost.
4. MARKET OPPORTUNITIES FOR U.S. COMPANIES
4.1 Equipment, Vehicles and Materials
Single opportunities may exist for the suppliers of:
|
HS Code |
Item description |
|
84.26.12 |
Mobile lifting frames on tires and straddle carriers |
|
84.27.10 |
Self-propelled trucks powered by an electric motor |
|
84.27.20 |
Other self-propelled trucks |
|
84.27.90 |
Other trucks |
|
84.28.10 |
Lifts and skip hoists |
|
84.28.20 |
Pneumatic elevators and conveyors |
|
84.28.32 |
Bucket type conveyors |
|
84.28.33 |
Belt type conveyors |
|
84.28.90 |
Other machinery |
4.2 Government and Public Procurement
Government and public procurement notices are regularly published BISNIS web site at
http://bisnis.doc.gov/bisnis/tradeleads1.cfm
5. USEFUL
RESOURCES
5.1 Government Organizations
Ministry of Transport of the Republic of Tajikistan
Ayni Street
Dushanbe, Tajikistan
Office of International Relations
Tel: +992 (37) 223-3889
Email: straceca@rs.tj
5.2
Trade associations and information portals
ABBAT
Mr. Boymurod Eshonov, President
35/1 Bohtar Street
Dushanbe 734042 Tajikistan
Tel: +992 (37) 221-1857
Fax: +992 (37) 221-1862
Email: abbat@tojikiston.com
5.3
Trade consultants, lawyers, etc. (as relevant)
TB Service, LLC
Mr. Jalil Halilov, Director
34 Shotemur Street, Apt 6
Dushanbe. Tajikistan
Tel: +992 (37) 224-7327
Fax: +992 (37) 223-5773
Email: tb-servis@tajnet.com
5.4 USG Resources
U.S. Embassy in Dushanbe
109A Ismoil Somoni Avenue
Dushanbe, Tajikistan
Tel: +992 (37) 229-2000
Fax: +992 (37) 229-2050
http://tajikistan.usembassy.gov
Mr. Jamshed Rahmonberdiev
U.S. Embassy Dushanbe
10 Pavlova Street
Tel: +992 (372) 210350/52
Fax: +992 (372) 210362
Email: Jamshed.Rahmonberdiev@mail.doc.gov
For more information on Tajikistan, visit BISNIS online at http://www.bisnis.doc.gov
BISNIS (www.bisnis.doc.gov)
is part of the U.S. Commercial Service (www.export.gov).