International freight transit in Kazakhstan: a SWOT analysis

The SWOT analysis were applied to explain competitive position of Kazakhstan's international freight transit services. They were instructed in the SWOT matrix, see Table 1. The SWOT provides a good basis for formulating strategies both for public and private sectors, as well as it is widely used in research.

Table1. Competitiveness of Kazakhstan's international freight transit services: a SWOT analysis

The main advantage of Kazakhstan is its geographical position because Kazakhstan is located in corridor between two big markets – China and the European Union. The Aktau seaport in Kazakhstan is geographically the closest seaport to the Caucasus Mountains. Two main modes of transport are well-developed in Kazakhstan, as rail transport and road transport that provides advantages for transportation of container cargoes in all territory of Kazakhstan. An important aspect is that Kazakhstan has access to the Caspian Sea and terrain is suitable for construction of new roads. In the 21^st century the trend is that volume of international freight transit is growing in Kazakhstan.

Kazakhstan's tarnsport infrastructure should be improved in order it could provide more opportunities and be more attractive for international freight transit. Custom services, training and education, throughput capacity (especially in rail transport) and border-crossing points Kazakhstan-China should be improved as well to maintain and develop competitive advantages of Kazakhstan in international freight transit transport.
The major obstacles to the development of the transit transport in Kazakhstan are shown below. There are two types of such problems, they are non-physical and physical.
The non-physical barriers are non-technical barriers to trade which are created by involving " human factor". Here are the main ones:

· The long customs clearance at border crossing points, which leads to significant downtime of the vehicles (rolling stock);

· The sudden inspections on the route with frequent cases of forced opening of the sealed transit containers;

· Insufficiently harmonized transit tariffs in the countries - in spite of signed international agreements, tariffs in the countries in the way of the transit trains are often significantly differed.

The physical barriers are:

· Break of gauge - China and Kazakhstan railroads use different gauges, and the wheels of the train need to be changed. A break of gauge is the first major obstacles in the transport transit. Trains and rolling stock cannot run through without some form of conversion between gauges, and freight and passengers must otherwise be transhipped. The Kazakh railway network is the world's third biggest using the 1, 520 mm track gauge, China uses the narrow gauge of 1435 mm. This creates the additional complexity due to the lack of the necessary infrastructure (trans-shipment centers), it adds delays, cost, and inconvenience as well;

· Aging and the actual lack of reliable wagons, container and locomotive parks, as well as aging handling-equipment and rails;

· A noticeable lag existing the infrastructure and technology of the international standards of quality (the speed, etc.);

· Insufficient capacity of the border crossings;

· The lack of well-developed logistic and communication networks, and the roadside service points;

· Inadequate processing capacities, consolidation and deconsolidation of cargo.

It should be noted that the opinions of the experts in this matter are different. Thus, the members of the Commission of the transport tariffs and the Council of transport policy under the Integration Committee of theEurasian Economic Community did not include a " tariff" in the list of the problem of non-physical barriers^[3].
The recent studies of the various expert groups have confirmed this approval. Thus, in the last report of the World Bank (2009) ''World Development Report'' shown that the cumulative time spent on the formulation of a dozen required materials for crossing the border of Kazakhstan is 89^[4]. The parameter of such a depressing character is only found in some countries of the Africa continent and the Central Asian countries.
The studies are conducted by the specialists of UNESCAP during the summer of 2008 year also doesn't show good results. During the transport, the containers from China (Shenzhen) to Europe (Pardubice, TheCzech Republic), via Dostyk station, the time spent at the border, was more than 15 hours^[4].
Finally, the interesting and instructive events to highlight the relevance of the existence of non-physical barriers are the recent analysis conducted by the Forum of entrepreneurs of the Republic of Kazakhstan in a program called the measurement of trade and transport facilitation along the corridors of the Central/South Asia (TTFPM). The observers were at the international border crossing on the border between Kazakhstan and China (Khorgos Customs point), they noted that the average time spent on all control procedures at the border crossing for the trucks with imported goods were 12 hours 47 minutes, with the transit cargo – 9 hours 15minutes. These indicators are ten times higher than the time spent on the similar controls procedures at the Kazakh-Russian and the Kazakh-Kyrgyz border^[5].
All the three studies are described that the non-physical barriers are one of the main reasons for the lost time during the transit of goods at the transport corridors in the area. The lost time is not only the loss of money and the trust of clients, but also the loss of the main competitive advantages of the rail transit.