The CPMM analysis relies on consistent and comparable data across CAREC countries, despite their inherent differences. This chapter provides an update of the main developments and CPMM data at a national level for each CAREC member country to help explain the trends or resulting outcomes at the regional or corridor level. This country-level analysis examines the policies, regulations, infrastructure, and institutional factors that can affect corridor performance. Pertinent barriers and issues are highlighted, key developments and progress are noted, and high-level recommendations are included.
The 2020 CPMM report introduces the four TFIs at the country level, segregated by road and rail transport, and further separated into outbound and inbound direction for border-crossing time and costs (Tables 6.1–6.22). These data are supplemented by average border-crossing time and cost for BCPs along relevant CAREC corridors. Key CPMM findings, updated trends and developments, and country-specific recommendations are also provided in this chapter.
Key Findings
- Georgia experienced some increase in border-crossing time. On average, outbound traffic was 14.2 hours, and inbound traffic was 4.8 hours, both higher than 2019 values. Both border-crossing costs and total transport costs reported improvements over 2019. Speed showed a divergent performance where SWOD (46.3 km/h) was reduced compared to 2019, but SWD increased to 27.1 km/h.
- The TFI estimates revealed the relative efficiency of transport and logistics in Georgia. For Caucasus to Central Asia shipments, the problems that mainly occurred at the Caspian Sea crossing could account for half of the total journey time; as well as the need to apply for various transit and insurance permits to traverse the different countries. These happened outside of Georgia, so the statistics here do not reflect the challenges of such transit shipment in the CAREC region but are reflected in the Corridor 2 performance.
Trends and Developments
The innovation and digitalization journey continues in Georgia as the country simplifies business processes and improves the efficiency of trade and transit. Recognizing that customs escort is an inefficient transit mechanism, Georgia introduced smart electronic seal with real-time GPS tracking, which differs from conventional nonelectronic seal. The smart seal monitors the movement and location of vehicles carrying sensitive cargoes such as flammable products. A total of 132 GPS smart seals have been purchased from Europe for transit use.
Georgia is cementing close economic and trade ties with Europe. Work on the Deep and Comprehensive Free Trade Agreement and the implementation of the new computerized transit system has begun.26 In 2020, Georgia also introduced authorized economic operators (AEO) modelled after the European Union (EU) standard, so that qualified Georgian companies could enjoy simplified customs controls and clearance. Besides shorter processing time, AEOs could be exempted from guarantees and similarly enjoy preferential treatment in countries where the AEO system is mutually recognized with Georgia.
Despite its attention on the EU, Georgia also has active trade ties with the CAREC region. Poti and Batumi are two Black Sea ports that serve as transit gateway for goods bound for Central Asia. Trucks carrying consumer and industrial goods move eastward and enter Azerbaijan at Tsiteli Khidi–Qirmizi Korpu (Georgia [GEO]–Azerbaijan [AZE]), crossing the Caspian Sea. The ferry crossing could take 5 days, inclusive of port dwell time, but samples showed waiting time in Baku International Sea Trade Port could take 10 days due to weather conditions. A one-way ferry crossing costs between $1,200 to $1,600. In Kazakhstan, customs escort (service) is rendered when the final destination of the cargo is within Kazakhstan, or when the destination of the cargo is to the exit point for transit shipment. The fee for customs escort costs $200.
Recommendations
- Joint customs controls. Azerbaijan and Georgia have proposed to institute joint customs control at Abreshumis Gza–Ipek Yolu friendship BCP.27 This could be a strategic initiative, and once operationalized, CPMM could monitor this location and study the issues, critical success factors, and learning points for other CAREC countries to consider on joint customs controls.
- Pilot of CAREC Advanced Transit System. The CAREC Advanced Transit System (CATS) is a CAREC initiative supported by Asian Development Bank (ADB) technical assistance (TA). It was designed as a harmonized electronic system—with the use of information customs exchange (ICE)—to facilitate movement of goods in transit through CAREC member countries. CATS aims to (a) streamline and harmonize existing transit documentation; (b) create a single electronic messaging system; and (c) provide a modern, risk-based affordable guarantee mechanism that rewards compliant traders. Azerbaijan, Georgia, and Kazakhstan agreed to participate in the CATS/ICE pilot test. CATS could also provide an alternative to the existing TIR system and could be suited to short hauls within the region at a more cost-effective rate.
- Rail transport for heavy machinery and equipment. CPMM observed that Georgian operators are transporting heavy items to Central Asia by trucks. The total trip could take 1–2 months, require the application of special permits, and are subject to customs escort fees. Transporting such items could possibly be more efficient using freight trains.