Beruflich Dokumente
Kultur Dokumente
Export Study
Land Transportation
(Up-Date)
Table of Contents
1
2
3
Introduction..........................................................................................................................1
Historical view of Land transportation in KSA ........................................................ 2
Land transportation agreement ...................................................................................... 3
3.1
Arab countries............................................................................................................. 3
3.2
Cooperation Council For The Arab States of The Gulf.................................... 4
3.3
Royal Decree ................................................................................................................ 4
4 Type of trucks used ........................................................................................................... 5
4.1
Tankers and Bulker ( for hauling Liquids in bulk - Petroleum products,
water, & chemicals etc.).......................................................................................... 5
4.2
Trailers (for hauling Palletized & Non Palletized General Cargo & Portocabins). ........................................................................................................................ 6
4.3
Refrigerated Trucks:................................................................................................. 6
5 Truck used for Exporting ................................................................................................. 7
6 Required Documents ......................................................................................................... 8
7 Duties at Saudi and neighborhood countries:............................................................. 9
8 Insurance:............................................................................................................................ 11
8.1
Insurance services of land transportation.......................................................... 11
8.2
Required documents and Insurance fees ............................................................. 11
8.3
Insurance companies in KSA .................................................................................. 12
9 Consolidate service........................................................................................................... 13
10 Prices ................................................................................................................................... 13
10.1 Market prices ............................................................................................................ 14
10.2 Cost structure ........................................................................................................... 16
11 Competition environment ................................................................................................ 17
12 Trucks transportation companies in KSA ................................................................... 17
13 Conclusion ........................................................................................................................... 18
II
Introduction:
Export is one of the influenced factors that can increase the economic growth
rate. Clearly, exporting play a major role in the economic of the country. This is
because:
Exporting process has a number of critical parts that should be planned well to
avoid unpredictable events, however, the transportation aspect is the corner stone
of exporting process and can be considered by some potential exporters as one of
the complicated part on the exports procedures and cost. Clearly, the
transportation cost has a great impact on the profitability of the export
transaction if the exporter doesnt deliberate the impact of added cost,
transportation fees, and the competitors prices in such targeted market.
This report aims to give an up-date of our previous study in Land Transportation
which includes estimate of the land transportation cost and illustrate procedures
that have to be done by exporters when they want to transport their shipments by
trucks. Additionally, this up-date study has also focused in other important
elements which include the following:
Insurance.
Competition environment.
The table presents the length of main roads that have been constructed between
Saudi cities and international roads, as well. As shown, there was a declining of
paved roads since 1996. In 1999, paved roads constructed started to grow
gradually to reach its peak. In contrary, there was a drop in 2002, as the Ministry
of Transportation did not construct new roads in that year. In recent years,
statistic shows sharp growth in paving and constructing new roads.
In addition, Saudi government has established 12 land ports which are spread
throughout KSAs borders .This big network of roads are supposed to facilitate
the flow of goods through the borders of the neighbouring countries .Table below
and map illustrate land ports in KSA.
Land
Al Hadethah
Al Drah
Halat Ammar
Turif
Jadedat Arar
Al Khafji
Ports
Al Ruqie
Slwaa
Al Batha
Al Tuwal
Al Khadra
Al Wadyah
The United Arab Emirates, Bahrain, Algeria, Tunisia, Sudan, Syrian, Somalia, Iraq,
Oman, Qatar, Kuwait, Lebanon, Libya, Egypt, Morocco, Palestine, Mauritania and
Yemen. Such countries have signed a transition agreement, which facilitates the
transition of goods among Arabian countries.
In general, the agreement includes many articles; the most important terms are as
follows:
The transited goods should not be charged any taxes or fees except
transition fees or road maintenance fees or other government services
fee but, the overall fees must not exceed .04% of the value of goods.
Each country should develop and maintain roads to be valid for
transportation.
There are three conditions related to the transit transportation which
are as follows:o Limitation of the transit period for 3 days.
o In each country the need to identify the route to be taken by the
truck to cross that country i.e. route to be taken from border
entry point to its border exit point.
o In each country, transiting trucks are sealed by respective
Customs authority while they cross the country to ensure that
the goods are not downloaded in that particular country but reach
their destination country.
ARTICLE 18.
and Jordan) forbid Saudis refrigerated trucks to pass their borders .Also Yemen
forbid Saudi trucks to pass Al-Hudaydah City .Particularly, Saudi refrigerated
trucks can not enter Jordan, Syria and Lebanon ,but they can be reloaded in
other foreign trucks at the borders. However, As a result of joining WTO, land
transportation sector should be liberalized to allow foreign companies and foreign
trucks to enter KSA. Hence in 2005, this low has been cancelled as a step to
liberalize land transportation sector and then meet WTO requirements.
3.1 Tankers and Bulker (for hauling Liquids in bulk - Petroleum products, water &
chemicals, etc.)
Tanker Capacity
o 4,500 US Gallons
o 6,000 US Gallons
Diesel Tankers
Petrol Tankers
Chemical Tankers
Water Tankers ( Potable & Non Potable)
Cement Bulker
3.2 Trailers (for hauling Palletized & Non Palletized General Cargo & Portocabins).
Sizes
o 40 Feet ( 12 Mtrs)
o 50 Feet ( 15 Mtrs)
o 53 Feet ( 16 Mtrs)
Flat Bed Trailers
Flat Bed with Side Rack Trailers
Curtain Side Trailers
Low-bed Trailers - 70 Ton capacity.
In the case of weight, the maximum weight of shipment locally and internationally
is 22 tons. However, some trucks could be loaded up to 28 tons by reducing the
weight of truck itself. It is to be noted here that the total allowed maximum
weight of a truck is 42 tons.
Generally speaking, the shipping cost by refrigerated trucks is higher than normal
trucks (Trailer) by approximately 35%. In the case of tanker and bulker, they are
higher than normal trucks (Trailer) by approximately 25%. The increase of cost in
refrigerated, bulk, tank trucks, could be interpreted as they rarely get load back
from a destination.
10%
2 0%
30 %
4 0%
50 %
60%
7 0%
80 %
Required Documents
Remarks
Documents Certification fees from CCI*
Documents Certification fees from CCI*
Documents Certification fees from CCI*
Issued by transportation Co.
Documents Certification fees from CCI*
Documents Certification fees from CCI*
Issued by insurance Co.
Although, KSA has agreements with most of neighbouring countries which forbid
any duties and charges, there are several charges and fees at the borders of those
countries. The duties at Saudi and neighbouring countrys borders remain static as
they had been listed in the pervious study. Moreover, recently, we have obtained
the duties at Turkey borders. Tables below show the fees that are charged
against Saudi trucks.
Bahrain
Type of Duties
Causeway charges -IN
Causeway Charges -OUT
Clearing Agents Fees
Insurance for 3 days
Total
Kuwait
Type of Duties
Public Warehousing co.-weigh bridge
Clearing Agents Fees
Insurance for 3 days
Total
UAE
Type of Duties
Clearing agent fees-Saudi
Clearing agents fees -UAE
Border fees
Insurance for 3 days
Total
Oman
Type of Duties
Clearing agents fees Saudi
Transit seal charges
Clearing at UAE border
Visa (for 3 trips)
Total
Qatar
Type of Duties
Clearing Agents fees
Insurance for 3 days
Total
Jordan
Type of Duties
Customs clearance
Police escorting fees
Road charges
Transit charges for non-Jordanian trucks
Total
Lebanon
There is a no-tariff duty at the borders of Lebanon, but there is a
charge for customs clearance at Syrias borders with Lebanon,. It
is around SR1,316 per one truck plus $5 for radiational checkup. It
is worth to notice that charges of customs clearance would be
reduced according to number of trucks.
Syria
Type of Duties
Customs clearance
Fuel Tax
Police escorting fees
Total
Turkey
Type of Duties
Road Tax Fees
Truck insurance
Drivers Visa
Total
10
Insurance
7.2
The fees of both insurance services are based on the value of shipment. Hence, an
exporter should submit number of documents to determine the insurance fees and
issue insurance policy. These documents are as follows:
11
Regarding insurance fees, determining of the fees depends on three factors: (1)
value of shipment, (2) type of packaging, and (3) reputation of carrier company.
Hence, the exporter would get the minimum fees if he could prove that the carrier
has insured his trucks and the shipment has packaged properly. The range of fees
for basic insurance is between 0.05% and 0.20% from the value of shipment. In the
case of comprehensive insurance, the range of fees is between 0.10% and 0.50%
from the value of shipment.
Type of insurance
Basic Insurance
Comprehensive Insurance
Minimum
0.05%
0.10%
Maximum
0.20%
0.50%
Telephone Number
A- Central Region
National Company for Cooperative Insurance (NCCI)
Al Al-Ahlia Insurance
Assurance Saudi Fransi
Saudi Indian Insurance
Gulf Union Cooperative Insurance Company
Malath Insurance Company
Al Rajhi Company for Cooperative Insurance
Arabian Shield Insurance
SABB Takaful
The Mediterranean & Gulf Insurance & Reinsurance (MedGulf)
Sanad for Cooperative Insurance
Saudi Arabian Insurance Company (SAICO)
B- Western Region
Allied Cooperative Insurance Group
Al Alamiya Insurance
Tokio Marine & Nichido
BUPA Arabia
Al Ahli Takaful
AXA Cooperative Insurance
United Cooperative Assurance (UCA)
Arabian Malaysian Takaful Company
Arabia Insurance Cooperative Company
Saudi IAIC for Insurance
C- Eastern Region
Saudi United Cooperation Insurance (AMITY)
Trade Union Insurance Company
Al Sagr Company for Cooperative Insurance
12
800-124-9990
01-4726666
01-4042222
01-4603402
01-4661830
01-4548404
01-4730477
01-4645943
01-4050677
01-4779229
01-4727535
01-4775263
02-6519995
02-6718851
02-6433334
02-6636936
02-6430555
02-2635566
02-6532881
02-6749166
02-6605945
02-6644035
03-8652200
03-8572222
03-8596124
Consolidate service
0. 8
0. 6
0. 4
0. 2
0
Prices
The Ministry of Transportation has made a study for analyzing the cost elements.
In fact, the purpose of that study was to determine the maximum level of prices
for truck distribution. However, the scope of that study covers the local market
(domestic truck transportation). In the following, elements of cost and shipment
prices, according to the study, will be highlighted.
Elements of costs: the elements of cost have been computed on the basis of
the value of truck, daily operation hours, average of speed, monthly
operating days, load bake parameters, the average of net load by weight or
volume, return of investment (ROI) and commission of forwarding offices.
13
C * L
A
16
Distances
1-50 Km
1-100 KM
1-200 KM
shows
the
shipment
prices
by
the
ministry
of
Irregular road
19 Hallalh per Ton/KM
Irregular road
14 Hallalh per Ton/KM
13 Hallalh per Ton/KM
12 Hallalh per Ton/KM
Although, the ministry has unified the prices, 68% of companies determine their
prices less than unified prices and the rest companies determine their prices more
than the unified prices (Dr. Osamah Ibrahim, Ministry of Transportation).
SR
10000
8000
6000
4000
2000
0
RUH
UAE
Qatar
Kuwait
Oman
Bahrain
Yemen
Lebanon
Iraq
Egypt
Jordan
Syria
Turkey
2167
2300
2333
2989
1806
4063
6050
13667
7125
3281
5250
8000
The increase on the Iraq transportation cost due to increase of war risk fees.
14
20000
SR
15000
10000
5000
0
JED
UAE
Qatar
Kuwait
Oman
Bahrain
Yemen
Lebanon
Iraq
Egy pt
Jordan
Syria
Turkey
3288
3225
3125
3713
263 8
3500
6750
20000
8000
3750
5750
8500
The increase on the Iraq transportation cost due to increase of war risk fees.
25 00 0
20 00 0
SR
15 00 0
10 00 0
5 00 0
0
DHA
UAE
Qatar
Kuwait
Oman
Bahrai n
Y em en
Lebano n
I raq
E gypt
Jordan
S yria
T urkey
1750
1633
1808
2642
1100
4000
6750
20000
8775
3600
6250
7500
*The increase on the Iraq transportation cost due to increase of war risk fees.
Regarding the transportation prices between main cities, the table below present
the average prices for a truck (trailer) of capacity of 22 tons in 2003 &2005:Destination
Previous Study
Current
% Change
Riyadh- Jeddah
1900
1700
-11%
Riyadh- Dammam
900
750
-17%
Jeddah- Dammam
2400
2200
-8%
As can be seen, there is decline on the local prices by around 12%. This could be
attributed to the situation of competition environment, as it is discussed in
competition environment (section-11).
15
9.2
Cost structure
One of the objectives of this report is to compute the cost structure of truck
transportation, therefore, we have analyzed the given prices from truck
transportations companies and prices from exporters and the Ministry of
Transportation to compute average cost per 1KM/1Ton.
Syria
Turkey
8.2
14
16.5
8.7
38.8
12.1
16.4
77.2
19.7
* The rate is reasonable and with market prices for all destinations except from Dhahran to Bahrain.
Jordan
Egypt
Iraq
Lebanon
Yemen
Bahrain
Oman
Qatar
UAE
Kuwait
10.5
15.8
11.8
Lebanon
Egypt*
Jordan
Syria
Turkey
1439
445
1388
1946
1116
2011
1656
1851
3000
1470
2386
1394
1108
1766
1869
1556
1476
1671
3262
942
421
407
1271
58
1783
1897
* A truck passes Red Sea over ferry which cost US $ 600.
896
2392
1607
1802
2951
DAM
Iraq
Yemen
627
1536
Oman
579
2057
Kuwait
1108
JED
Qatar
RUH
UAE
Bahrain
Destination
16
Where:
= 8.2 Hallalh
=1,108 KM
=22 Ton
= (.082*1108)*22= SR1,999
10 Competition environment
Currently, there is a strong competition in the land transportation as foreign
trucks cut the prices in order to get load back. According to our findings, the
competition from foreign trucks is getting strong, as they could cut around 30% of
Saudi transporters prices. However, the risks associated with hiring foreign trucks
push some exporters to transport via national transporters. As a matter of fact,
the fixed cost in land transportation sector is estimated to be 80% from the total
cost. Under this situation, the efficient managing of truck fleet is the key success
factor in this sector. Nonetheless, In the interest of security in the KSA, new
regulations have been issued by Traffic police and Ministry of Transportation,
which has reduced the flexibility of companies to manage their fleet. For example,
each truck should have a fixed driver and the company cannot replace another
driver for a truck without permission from the Traffic police. Generally speaking,
there is a noticeable trend among land transportation companies to operate their
fleets outside KSA as a result of current losses, increase cost and strong
competition from foreign and individual trucks.
Location
Phone NO.
Contact Name
Position
Website
Dammam
8184691
Khalid Javaid
Continental Freight(Almajdouie)
Riyadh
4723779
Zafar Ul-Haq
Branch Manager
www.almajdouie.com
Mubarrad
Dallah transport
Riyadh
4794113
Yasir A Allehaidan
Vice president
www.mubarrad.com.sa
Jeddah
6171252
Zahid Heanor
GH Transport LTD.
Al Rashed Transportation
Jeddah
6201931
Prakash S. Mani
General Manager
Jeddah
6206600
Rizwan
Commercial General
Dammam
8211172
Syed Arshad
Dammam
8071100
Fakhry Al-Dahan
GM
Dammam
8590000
Khalid Al-Saif
G.M
17
12 Conclusion
The transportation issue is one of the most critical parts in the exporting process.
ECUs objective in this report is to provide information about trucks market and
analyze the market prices in order to help and guide KSA potential exporters to
understand the current procedures & cost structure of various available
transportation facilities exist in the kingdom. Moreover, this primary report will
form a reasonable base, to assess and measure the impact of transportation cost
on the prices of Saudi products in overseas markets.
From observation of transportation market, the potential exporters are advised
to:
18