To date, Kazakhstan has seen a significant influx of motor transport companies from Russia and Belarus, which, due to anti-Russian sanctions, are forced to seek alternative routes to continue their operations on the European route.
And although this circumstance should have had a beneficial effect on the development of the domestic transport and logistics sector, in practice the situation is different.
The editorial team of FBRK decided to look into this issue in more detail.
In April 2022, the European Union (EU) imposed a ban on the activities of Russian motor transport companies on European territory, which forced them to seek alternative routes, including through Kazakhstan.
As reported by Forbes, before the introduction of anti-Russian sanctions, approximately 3,100 companies from Russia, with a total of around 45,000 truck-trailer combinations and more than 70,000 employees, were operating on the European route.
The revenue of Russian long-haul truckers, according to calculations by the Association of International Road Carriers (ASMAP), amounted to €2.5–2.7 billion (1.3-1.4 trillion tenge) annually, providing payments to the Russian budget in the amount of 40–45 billion rubles (200-225 billion tenge).
Undoubtedly, Russian road carriers lost a significant portion of their business due to the ban on working in the EU.
In turn, Russia's partner countries, including Kazakhstan, could undoubtedly have reaped economic benefits from the ban, as their companies would have taken over part of the international transport market between Russia and the EU.
However, in reality, the situation is not like that at all.
As we have learned, among foreign relocating companies, which are most often companies from Russia and Belarus, there is now a practice of creating joint ventures (JVs) - a legal entity with foreign capital participation.
It is worth noting that such enterprises can often apply for tax holidays or reduced corporate income tax rates, may have access to simpler and faster registration and licensing processes, and may even have advantages in using ports, terminals, and logistics centres.
Furthermore, joint motor transport companies often register their vehicles in Kazakhstan, which allows them to obtain so-called 'white plates' or, in other words, conduct business while avoiding restrictions that may apply to foreign companies.
At the same time, we note that according to the rules of state registration and accounting of certain types of vehicles, cars belonging to legal entities with foreign participation are only issued 'yellow plates'.
We should also add that according to the Law 'On Road Transport', for vehicles registered in a foreign country but on temporary state registration in Kazakhstan, engaging in entrepreneurial activities for international freight transport is prohibited.
Unsurprisingly, foreign companies are looking for any means to adapt to local conditions, although these efforts almost never take into account the interests of Kazakhstani companies.
And although with the introduction of anti-Russian sanctions, demand for Kazakhstani carriers in the EU has increased, the presence of foreign relocating companies in the market and the lack of any strategy to realise the country's transport and logistics potential create unequal conditions for Kazakhstani businesses.
This year, we could observe how Russia and Belarus closed their borders to foreign international drivers.
Kazakhstani vehicles were simply turned back by the Belarusian border services.
At that time, the Minister of Trade of Kazakhstan, Arman Shakkaliyev, stated, that the situation with the restriction of goods movement 'does not correspond to the conditions of integration of the Eurasian Economic Union'.
However, the Belarusian side was quick to assure that the return of Kazakhstani heavy trucks is carried out by the border service of the FSB of Russia 'due to the lack of grounds for admission to Russian territory'.
As we have learned, foreign companies from Kazakhstan were not affected by these obstacles, meaning a heavy truck with Kazakhstani plates but a foreign driver was allowed through without any questions.
Moreover, such vehicles could avoid additional checks, such as scanning the truck-trailer combination and conducting a full inspection of transit cargo, which significantly saved transportation time.
It is no surprise then that cargo owners prefer a foreign carrier, who will certainly not be turned around at the border or held up at the checkpoint.
It is also worth noting that the relocation of foreign companies to Kazakhstan has led to a shortage of foreign permit forms (FPFs), the distribution system for which had already raised many questions.
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For reference: A Foreign Permit Form (FPF) grants a carrier the right to travel through the territory of a foreign state in accordance with international treaties ratified by the Republic of Kazakhstan.
Recall that earlier, the FBRK editorial team reported on schemes for the resale of FPFs, for which entire groups of shell companies are created.
An equally interesting aspect is the rules governing international transport via trailer swap or transhipment.
This method implies that a tractor unit from one country can deliver cargo to the border, where a swap occurs — another tractor unit picks up the trailer and continues the transport to another country.
Since 2017, Kazakhstan has had a ban on importing goods into the country via trailer swap/transhipment. In May 2023, this ban was lifted, which caused a storm of indignation from domestic companies that could not withstand the competition from foreign carriers.
However, in October 2023, the ban was reinstated and soon suspended again first until 1 January 2024, and then until 1 January 2025.
Whether this decision takes into account the interests of domestic carriers is, of course, an open question.
Furthermore, cases, are well known where goods travelling from the EU to Kazakhstan simply disappeared during transport through Russia. This includes, among others, goods banned for import into Russia.
In conditions of close scrutiny from the EU, driven by anti-Russian sanctions and methods of circumventing them via Kazakhstan, it is probably high time to concern ourselves with, at the very least, the interests of domestic motor transport companies.
The editorial team of FBRK has sent an official request to the Ministry of Transport to obtain a comment on the situation regarding the displacement of domestic companies from the international transport market.
To be continued…