Car forwarding facing problems

Car forwarding operations in Georgia have decreased by almost half since a new standard was introduced on July 22. There are serious delays and problems in forwarding cargo designed for Armenia, Azerbaijan and Central Asian countries by container through the Georgian Black Sea ports.

The new standard adopted by Georgia establishes new parameters for transporting 40 feet containers 4 metres tall. Such containers must now be transported through Georgia with an escort. A special car and a special security service must accompany vehicles carrying 40 foot containers, and these cost approximately USD 600 to send from Poti to Tbilisi while transporting the container itself costs approximately USD 900.

All the forwarding companies are protesting against this new standard and the extra costs it imposes on them. Some have already have started looking for alternative routes for transporting container cargos to the same destinations, for instance, via the Iranian port of Bandar Abbas to Azerbaijan and Central Asia or direct to Armenia. Of course if these new routes are used this will seriously undermine Georgia’s image as a transit country.

Some forwarding companies are trying to modify their vehicles so they can meet standards, but some cars cannot be altered. So the companies have two options, either getting out of that business or paying extra money. Small operators who own a few containers or vehicles and individual drivers who have purchased their container carriers with a bank loan and need to obtain a sustainable profit to pay back the loan by forwarding cargo from Tbilisi to Poti and back are those most affected by a decline in road haulage through Georgia.

The new standard does not apply to railway transport. The cost of transporting a container from Poti to Tbilisi by rail is approximately GEL 910. The road forwarders suspect that this “innovation” has been made in order to redirect container traffic onto Georgian Railway. However no real reason for adopting this regulation has been given so far.