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Logic of logistical development

Geographical position promises major economic benefits from development of transport-logistic services, worth billions of Dollars
By Yuri Chernyakevich

The geographical position of Belarus is advantageous for transit, promising major economic benefits. In 2007, discussions began at the highest level and, in 2008, the National Academy of Sciences developed a programme of logistical development until 2015, approved by the Council of Ministers. According to the programme, not only logistics centres, but their conditions of functioning are being supported, noted Pavel Bozhanov, the Head of the Ministry for Transport and Communications, speaking at a press conference in Minsk. He feels that good progress is being made, with 12 logistics centres now operational and 46 investment projects soon to be realised. Belarus is to gain huge transport-logistic sites, such as InterStroiPortalPlus, (20,000 square metres) and the Prilesie centre (50,000 square metres) — to open in November. Meanwhile, Beltamozhservice has announced plans to create a 500,000 square metre ‘A class’ warehouse in Minsk.

According to plans, 60 logistics centres are to be operational by 2015, allowing Belarus to attract additional financial assets into the economy. It is no secret that logistics is a profitable business. For example, in Germany, logistics generate 20 percent of gross domestic product. Therefore, Belarus has decided to take financial advantage of its favourable geographical position.

According to Valery Kozlov, the Head of Logistics at the Belarusian Transport Research Institute — Transtekhnika, prices for logistic services in Belarus are comparable to those in Vilnius. He believes that Belarus could become one of the top 50 countries for efficiency of logistics, stressing, “These are not just simple words, but expert estimations from the World Bank.” However, he emphasises that an action plan is needed to achieve our full potential.

Mikhail Kovalev, the Dean of the Economic Department at the Belarusian State University, adds, “The development of transport-logistic services is promising for Belarus, despite it taking time to recoup investments. We’re currently generating about $3.5 billion annually from this sphere but the potential is huge; Belarus could raise its volumes of transit services considerably.” He especially notes the role of EurAsEC membership in inspiring expansion. “Today, our country, in joining this international organisation, has every chance of increasing cargo flow through its territory,” he explains. “China sends most of its goods to Europe by sea but the Suez Canal (used by Chinese containers and cargoes) is simply overloaded. China, in my opinion, will be seeking an overland route to the EU through Russia and Belarus. The Eurasian Bank estimates that Belarus could earn up to $5-6 billion per year from transiting goods from Asia to Europe.” He is eager to see Belarus engaged more actively in transport-logistical projects, investing in infrastructure. Meanwhile, he believes that domestic companies must be structured and united.

Clearly, Belarus has already taken the decision to pursue this path, working efficiently to facilitate cargo flow. Consulting company McKinsey predicts a quadruple rise in volumes of world trade by 2020, which will increase demand for transit services. By attracting flow through its territory, Belarus can generate revenue. All that’s needed is to develop logistics and create the necessary infrastructure.
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