Moldova: Turmoil with European future or back to Soviet past? How Potholes keep a nation down.

Moldova?
... ...
Where is that? Is that a real word?
Yes, it is! It's the country I'm come from.
I kindly ask you to spare 5 minutes to discover a new country that has always been overlooked.
To be expected from a country with a current population of below 3 million people in the last census that is actually 25% down since 10 years before that when it was 4 million 'strong'.
There is no mass epidemic or alien abduction.
Just massive emigration, anywhere.

But why?

The Republic of Moldova, or simply Moldova, is a landlocked state located in Eastern Europe.
Situated between Romania and Ukraine, it has been an independent state since the Dissolution of the Soviet Union in 1991, becoming officially recognized by the United Nations in 1992.
It is regarded as one of the poorest nations in Europe, ranking 149th in the world by GDP (purchasing power parity), between Niger and Tajikistan.

Moldova is a member to the Council of Europe and is currently attempting to join the European Union.
It has already implemented the first three-year Action Plan under the framework of the European Neighborhood Policy (ENP).
[The European Neighborhood Policy (ENP) is a cooperation agreement between the European Union and countries aspiring one day to join the EU or be more integrated in its economy; benefitting from e.g. tariff-free access and financial assistance.]
Also Moldova is currently benefiting of EU’s Autonomous Trade Preferences regime which grants Moldova access to EU markets duty free, on some of its largest agricultural products, such as wine, barley, maize and wheat.

The country’s boarders are mostly made up by the two large rivers that run along: Prut and Dniester.
The first is 716 km in length and the second is 640 km.
The section for navagation of large vessels is of respectively 40 km and 556 km.
As such in comparison to Moldova’s other forms of transport (these being railway, air and road) water transport is negligeable as the total volume of passangers and goods is very low.
However things might change once the petroleum terminal at Giurgiulesti is completed, as currently the infrastructure in the area only allows for storage of gasoline and diesel; as water transport has its advantages such as being greener and relatively cheaper.

Moldova’s first railway was built over 147 years ago.
Currently the railway transport plays a significant role in Moldova's import and export economy, as for the longest time that was the only way to travel and transport goods with.
It still partially is a very accessed method, as it allows for large volume to be moved, mainly between the ex-soviet states.
This is because these countries use a different gauge from Central and Western Europe.
As such a brake-of-gauge is required when two different gauge lines meet; which is the boarder with Romania.
It can take a minimum of 3 hours for a simple passenger train with under 10 cars to have all of its gauges replaced.
This makes it very time inefficient for the transport of goods via train from Moldova towards the west; also considering that during this gauge change the cars move violently back and forth to properly fit and align.
Compared to neighboring and EU Accession countries, Moldova has an on par rail network density.

There are four airfields in total in Moldova, of which only one is used for international connections; located in Chisinau.
It transports about 2,000 tons of cargo per year on average, which makes it a very small airport by volume.

For these reasons road transport is the key method of cargo transportation which will help Moldova grow and establish itself in the European market.

1.2 Scope
This post will resemble a case study on the Republic of Moldova’s road transport, how its economy could benefit and also bring it closer to becoming fully integrated in the European market, in terms of competitiveness and presence.

• Reporting the most up-to-date information regarding road transport and its logistics
• Analyzing the gathered information
• Comparing the fleet of trucks in Moldova to a EU member state’s
• Present the technological level, its progress and evolution
• The environmental impact and the imposed requirements and movement towards greener vehicles.
• Analyzing the how road transport will benefit Moldova’s economy at going forward

The most popular freight forwarding company in the country, the type of trucks being used and also talk about the carbon footprint left by them as there is a general movement towards reducing emissions.
This information will be put in contrast to a member country from the European Union, in this case Austria, which was selected due to having one of Europe’s leading trucking companies by full truck load, LKW Walker and an outstanding infrastructure.
In some respects Austria is similar to Moldova, in that they are both surrounded by other countries and lack sea access and for this water transport plays a much smaller role in their transportation industry.
Rail while still widely used, in both countries takes a secondary role to road transport, which accounts over 3⁄4 of their freight transport usage.

2.1 Economy
Moldova’s geographical location between Western Europe and CIS gives the country a strong economic potential, as being a border state between the two regions it can benefit from trade and act as the middle-man in trading.

[The Commonwealth of Independent States (CIS) is a regional organization whose members are ex-Soviet Republics, which were formed during the breakup of the Soviet Union.]

This also allows Moldova to directly export their goods to each region and as such it has a larger operating market, which is a big advantage.
Moldova has shown an impressive economic growth from 2000 until 2008. The average GDP growth rate has increased by 5 percent, however because its economy is mostly based on consumption and because 30% of the GDP is a direct result from transfer of money from workers abroad back to their natal country (remittance) the global financial crisis has had an immediate and destructive effect on Moldova. At the start of 2009:

• GDP dropped by 7.7%
• Exports decreased by 24.2%
• Foreign direct investments dropped by 42.5%

This made banks not give out credit anymore, as one of their risk reduction measures.
And as such growth has somewhat halted.
As the strong Lei forced Moldovan exports to increase in price both abroad and domestically, the competitiveness of products from Moldova has been further reduced.

The pie charts above clearly show how Moldova has had a immense change and restructure
in the three sectors of its GDP:

• In 1989 Industry and Agriculture played the largest role in Moldavian economy, with only 1⁄4 in Service sector.
• Fast forward ten years and the most dominating sector, with 1⁄2 of the GDP, is comprised by Services. Industry which was leading as the largest sector in 1989 with 40% has halved to 19%. And Agriculture while still a strong presence is in a declining phase.
• 9 years later, at the brink of the Financial Crisis, and Services holds 3⁄4 of the GDP. Industry was able to maintain its quota of 19% and Agriculture has been reduced to 1/10th of what it was two decades before.

Exports between 2000 till the crisis have had significant changes in their natural structure.
Moldova’s agricultural sector which, as seen above, suffered the most changes and as such decreased its consumption internationally and domestically.
The CIS countries, mostly Russia, have shifted from Moldova’s main trading partner to becoming obscured by the European Union countries.
This is a direct result from the Central European countries joining the EU, and more significantly Romania, with which Moldova shares a boarder.
This is important because this idea of “Central and Eastern European countries” has statistically been changed to just “EU countries”.
So the gateway for Moldova’s diversifying exports is quite literally at their door step.

According to the figures made public by Moldova’s economy minister, exports to the EU account for 49.5% whereas to the Commonwealth of Independent States 41.4%.

In 2010 Moldova requested a three-year arrangement under the extended credit facility to the International Monetary Fund.
After conducting their analysis they pointed out that because of the reduced activity in the agricultural sector and increase from foreign investments into the country, Moldova should capitalize on these shifts in order to become a better compete in the world market.
Their opinion is that Moldova’s current economic situation is situated in such a way that it allows for improvement.
The economy should be expected to return to 2008 pre-crisis conditions and growth rate of 5% with inflation stabilizing and remaining low; all this over a medium-term period of time.

The largest portion of Moldova’s imports is refined petroleum oils, this is due to Moldova not having sufficient mineral resources and as such must import all of its energy supplies from Russia.
This has had detrimental effects on the country when there were disputes, such as 2005 when Russian owned electric station in Moldova cut off the power and another Russian company cut off gas supplies.
Once again in 2009 gas supplies were cut to Moldova during a week long dispute between Russia and Ukraine; as Moldova is engulfed between Romania and Ukraine, it does not have a direct link to Russia, and as such all the oil pipes must pass across Ukraine.
Now follows medicaments, cars, cables, cigars, telephones, and many other types of equipment which are only transported via road transport on trucks.
The most common sight is seeing car carriers, which are trucks with many passenger cars loaded onto its trailer.

It is clearly visible how Moldova relies on its two neighbouring countries, Ukraine and Romania for a combined total of 28% of their total import bulk. China and Germany each 12%.
Currently Ukraine is Moldovas primary supplied of electrical energy. Romania exports clothing to moldova, such as garnishes and breeches.
Several large German companies have setup shop in Moldova after having established strong foreign relations between the two countries; Germany was in fact one of the first countries to awknoledge Moldova’s independence and set up a diplomatic mission with it.

Wine from fresh grapes is Moldova’s largest single exporting good; this comes to no surprise as Moldova is renowned for its fields upon fields of grape making Moldova quiet established in the wine industry.
The country is ranked 24th as the largest wine producing country in the world 3 ; 3 places behind Romania and 9 behind Ukraine, its neighboring countries.

72% of Moldova’s vineyard acres are used for commercial production, of which the remaining 28% are used by vineyard owners in the manufacturing of home-made wine for personal use.
The other largest exports are all within the agriculture sector, i.e. crops.
So on one hand agriculture accounts for only 25% of the GDP; it’s the major exporting industry of Moldova. Arable land accounts for 55% of the entire Moldovan territory.

[The list of the top 40 wine-producing countries is ranked via the calculated by volume of wine production in metric tonnes by the Food and Agriculture Organization (FAO) which is an agency within the United Nations.]

EU member countries play the largest role (70%) of export of goods from Moldova.
Which compounded with the Moldova’s participation in several free trade agreements between countries from the CIS (12 former Soviet republics), bilateral Romania-Moldova free trade area, and many other individual European countries which today have become EU member states.
As such the infrastructure plays the largest role in how Moldova’s economy will develop in the future and as the IMF’s research concluded, there is a lot of potential and all that is required by Moldova are structural reforms, mostly having to do with monetary policies and political stability.
owever, there still remain significant legal disputes which affect Moldova’s relationship with the CIS which directly affects the exports between those territories.

2.2 Legal issues
In 2006 Russia declared an import ban of Moldovan (and Georgian) wines, due to claims of heavy metals and pesticide traces being found within them. In defense, Moldova argued that because other countries which imported Moldovan wine have never found and reported any traces of such impurities or any other kinds of problems or health-hazards.
This leads Moldova to believe that the ban is an economic blackmail, because Moldova was considered as having “anti-Russian policies” by the Russian government.

And as Russia at the time was Moldova’s single largest imported of wine, the wine industry was heavily impacted.
New wine importing partners had to be made, which involved coming up with new trading routes.
As the most common transport to CIS countries is by train, whereas towards the EU is by road; due to different gauges between the regions which vastly increase the amount of time it takes for deliveries to take place.

There have also been stern constraints between the Ukraine and Russia which due to not having found adequate dispute settlement deals with one another endangers the free trade agreement between Moldova and the CIS countries; as Ukraine acts as a transit country for CIS access to Moldova.

Ukraine itself has also been a headache for Moldova’s transit route to CIS as many different times, restrictions and regulations have been imposed which had severely negative effects on trade.
Regional transit fees for instance were demanded to be paid to Ukraine in local currency at very high exchange rates.
Many bilateral talks have been taking place for certain restrictions to be lowered, only for other ones to later pop-up.
So to this day a free transitional environment has yet to be achieved.

Therefore road transport has begun to play more and more of an increased importance in the future economic development of Moldova. With increasingly limited access to the East, Moldova’s only chance is to shift towards the West.
They will do so by improving road transportation, increased vehicle standards for compliance with EU policies and the building of better roads on which the trucks and trailers will be able to transport Moldova’s wine and other goods.

2.3 Infrastructure
Moldova’s transport infrastructure has been poorly maintained and not enough changes have been made to accustom and address the needs that come from the shifting trading patterns; like the one expressed above: troubles with CIS countries.

Source: Index Mundi

The entries displayed count the total length of all roads within Moldova’s road network. The drastic decrease of roads is due to them no longer having been maintained and to the ever- rising increased use of roads by both the transpiration sector and individuals.

At present the Moldovan road network is made up of 16,800 kilometers of road, of which around only 10% is in good condition, i.e. up to European standards, which is due to the very long time it has taken for the Moldovan government to act and begin investing heavily into the infrastructure.

For the most, Moldova’s roads are of poor condition (difficult to travel), which in turn puts a toll on the government budget. A research conducted in 2004 concluded that upgrading road quality would save upwards of 20 million Euro annually.
Road maintenance has always been lacking and the budget for administration of national roads has always played a back role in the allocation of budget.

Between 1995 until 2002 an equivalent of 0.3% of Moldova’s GDP was used in the maintenance, upgrading and development of the national road network; this is the equivalent to 5 million Euros.
In order to become more competitive with neighboring countries, a minimum of 1% of the GDP should be used; or upwards of 12 million Euro.
The total sum required for the rehabilitation of both national and local roads is upwards of 30 million Euro’s per year.

Source: World Bank - 2002

Above is a comparison between surrounding countries and the graphical representation of the percentage in relation to its GDP that is each country spends yearly on maintenance and administration of its national road network.

The Moldovan government has since then began rectifying these problems, with the help from foreign investments and loans. The largest investment by far to date came from the European Bank of Reconstruction and Development (EBRD) co-financed with the European Investment Bank (EIB) which financed €75 million in sovereign loans with the purpose of rehabilitating Moldova’s national road network and to support the transport infrastructure, in 2010.
The EBRB also financed road network repairs in Moldova’s capital of Chisinau with 12 million Euro, last year in December 2011.
The EBRB has been financing the rehabilitation of Moldova’s roads from as early as 1995.

During bi-lateral relationship talks between Moldova and China, a €50 million low-interest loan was obtained from a Chinese construction company which will be used to the modernization of 50 kilometers of roads in Moldova.
The International Monetary Fund has also provided Moldova with over 80 million Euros from a loan of €370 million in Special Drawing Rights to fund the restoration of Moldova’s road, with the intent of promoting exports by improving Moldova’s business environment.

Other sources of financing for the rehabilitation of road infrastructure in Moldova include:
Road Fund, National Fund for Regional Development, World Bank, Netherlands Government, Romanian Government, Sweden SIDA, Great Britain BFID, Germany KfW, Japan JSDF.

2.4 Road Transportation and Logistics
Moldova’s trucking companies have the lowest operational cost in Europe. However other countries employee much higher standards of vehicles, compared to the old truck fleet which truckload carriers in Moldova have.
This reduces the amount of transporting permits these companies receive from other countries. So the way forward would be to upgrade, or better yet replace, its trucking fleet with higher EURO-standards, in order to increase Moldova’s ability to compete in the EU market.

In early 2000 there were no major European freight forwarding firms operating in Moldova, due to the small size of the market and cost-inefficient administration procedures imposed by the government.
Freight forwarding and warehousing are lacking in comparison to international standards at that time.
The range of services, quality and their reliability are very low.
Fast forward a decade later, and some of the largest freight forward carriers run operations within Moldova; DHL for instance, which is the world’s single largest freight forwarding company.

The trucking industry in Moldova is made up by three different types of operators:

1. Operators with multilateral permits, for EU trade
2. Operators with bilateral permits, for CIS trade
3. Operators for domestic trade

The latter two use old equipment, which hinders the ability to transport large cargos over longer distances, therefore the low operational cost advantage is not used effectively and thus the trucking industry in Moldova has poor profitability.

This means that the only way to access into the EU is by upgrading the fleet of trucks, but the shift to higher standard vehicles reduces the cost benefits of Moldova, and will reduce the profits the companies in the transport sector make.
In neighboring countries it is common and widely used to upgrade or purchase higher EURO-standard vehicles with financing from leasing arrangements.
In Moldova however the most common way of purchasing of new equipment for trucking companies is using own equity, due to high interest rates and monthly leasing fees.

In the table above I take Latvia into comparison with Moldova because Latvia used to also be under the Soviet occupation, and at the times compared it was aspiring to become a member state of the European Union.
As Figure 11 shows, there wasn’t a single registered truck in 2002 in Moldova, with scarce percentages of Euro-2 and Euro-1 standards4.
Whereas Latvia which also had a large percentage of Euro-0 truck fleet has undergone a significant shift towards the best Euro classification at the time, Euro-3.

[European emission standards have presently 5 classifications, with two more recently proposed and still in discussion. The classification starts from Euro 0, which has the highest emissions and as the level of NOx drops by grams per kilometers (g/km) the Euro figure increases to 1, 2, 3 and 4. Euro 4 having the lowest emissions at present and as such being the best figure. Currently Euro 5 and 6 are being drafted.]

The compliance with Euro standards is what determines the number of permits that are issued to road haulage firms; therefore the better the truck fleet in Moldova will evolve and the greener they become, the more opportunities there will be for its international transport towards the EU.
Road carrier associations within these EU countries keep an eye on their governments so that low-cost countries such as Moldova may not get permits too easily.

Road traffic accounts for 72% of all freight transport. The remainder is 28%. Air freight is not economically feasible on a national level. As the roads towards the European Union (i.e. Romania) are far better in quality than the ones surrounding the Capital of Moldova, Chisinau; and it's International Airport.

The pie-chart above does not include Air and Ship transport as play practically no role in freight cargo transport of goods, as they are mostly used for passenger transport.
As it can be seen, Road transport is by far the most used means of freight transport of goods. And its trend is on the rising; therefore the Rails are being used less and less as road infrastructure continues to be improved by foreign financing.

And not only that but customers naturally prefer Road transport for many of the goods Moldova produces as with Road transport the destination can be changed and the delivery time can be changed at a moment’s notice; whereas by train the shipment is final and irrevocable.
Multiple stops can be made during the transportation of goods so it provides “door-to-door” service. Road transport is also a significantly faster means of transportation over especially short distances, which is important for perishable goods.

In 2002 the Agency for the International Automobile Conveyances of Moldova (AMTAI)5 collected statistics at the boarder stations on Moldovan trucking firms. Their findings were:

• 90,800 trucks engaged in international traffic crossed the Moldovan boarder in 2002
• 94% of these trucks were from nine countries (Moldova’s largest exporters/importers)
• 13,750 out of 22,700 truck movements were from Moldovan companies and engaged in international freight (export/import to/from Moldova)
• 8,950 Moldovan trucks were transiting Moldova to serve the CIS countries

While dated, it is a look at the past and shows that a decade ago Moldova’s trucking companies accounted for 1/3rd of all international truck movement in Moldova. 1/10th of Moldova’s fleet of international freight was engaged in transportation from CIS countries to other countries: such as transport of Russian goods to Turkey, Greece or Romania.
The total revenue made by Moldovan trucking firms in international traffic in 2002 was of €25 million.

[Agency for the International Automibile Conveyances of Moldova (AMTAI) was a governments owned agency which since then has been shut down and its functions passed down to Moldova’s Ministry of Transport and Roads.]

Apart from truckload freight, Trans Ager, like all other large companies expand their services to other areas such as having partnerships with sea vessel with which they may bring shipments from across the world to Moldova using the ports from Romania and Ukraine. Trans Ager is also the only company in Moldova which offers heavy truck towing services; so when a large truck gets stuck, has failures or other technical problems, they can be called to transport the truck. And this company also offers repairs and parts for trucks. So it is a very fruitful operation.

A truckload carrier is a trucking company which is put in charge of transporting an entire full trailer load to one single customer. Truckload shipping by definition is the movement of large quantities of homogeneous cargo, in semi-trailers or intermodal containers.

• Trans Ager is one of the largest truckload carrier transport company in Moldova
• It is a privately owned company which has been operating in both national and international cargo transportation since it’s establishments in 1995.
• It has evolved from an average transportation company to one with a modern fleet of vehicles
• Over 100 employees
• Co-Founder and active member of AITA6
• In 2007 Trans Ager received the award for “The Best Transport Company of the Year”
• The company prides itself in continuously trying to evolve and improve their services and safety 35 truck endowed with tarpaulin, textile vans and refrigerators.

As the picture above shows, Trans Ager’s fleet is predominantly made up by MAN trucks. There can be seen 8 trucks, all of which are MAN F2000 model, apart from the Mercedes- Benz Actros (5th from the left).
The MAN F2000 is also winner of the coveted International Truck of the Year award, which it won in 1995. Trans Ager recently also began adding the Mercedes-Benz Actros truck range, which range has won the award 4 times in the last 15 years, which is a great success.

[International Association of Road Hauliers of Moldova (AITA), founded in 1992, is the freight transport organization of Moldova. They have over 160 active members and over 4500 registered trucks. It assists it’s members at issuing TIR carners (19,600 in 2000), transport authorizations and other logistical assistance.]

This model is pre-2000’s therefore it was not built with the Euro emission standard in mind, so when it was implemented the MAN F2000 Evolution ranks as a Euro-2 truck. One of the biggest truckload carriers in Moldova has a decade old fleet of trucks which is way out of sync with the current demands for fuel regulations.

Whilest not the most popular truck at present due to the increasing demands in environmental safety, in Moldova since the USSR’s existance the following truck has been the most iconic truck to be seen in Moldova, and in the CIS region in general.
ZiL or Zavod imeni Likhachova, which literally means "Factory named after Likhachov" is one of the largest trucks and heavy equipment manufacturers in Russia. Founded in 1916, their products have ranged from armored cars and buses to armored fighting vehicles and limousines.

During the 30’s up until 1956 the company was in fact called as ZiS, or Zavod imeni Stalina; after Joseph Stalin. The vehicles produced by this company have been such a strong impact in the Soviet government that there were special roads dedicated to exclusively transport Soviet officials in their ZiL cars, known as ZiL lanes.

One of the most popular and iconic trucks from the Soviet era is undoubtedly the ZiL-130.
Spanning a production lifetime of 32 years, it has had two dozen variations, as well as a military oriented general cargo truck, the ZiL-131.
During its three decades of production, 3.5 million trucks have been made. What made it stand the test of time and become so popular was the variety of modifications and designs it came in as well as the simplicity and reliability of said truck.
It has been shipped to 40 different countries, most of which Ex-Soviet nations, i.e. the Republic of Moldova.
Where it still can be seen on a daily basis running in the capital of Chisinau and very likely around the country; mostly for daily deliveries to and fro stores and shops.
As well as being used by the fire department or for military soldiers traveling from location to location.

The original basic ZiL-130 model has a fuel consumption of 38 liters for every 100 kilometers traveled. As previously mentioned, due to its simplicity in design and popularity there has been created the ability to replace the original 6 liter V8 petrol engine with high emissions to much more economical and greener diesel engines. Engine’s with an “s” because there are very many models of engines, with different horsepower and fitting in different European emission standards7, the best diesel engine having the least amount of toxic emissions of Nitrogen Oxides, Carbon Monoxide, THC, NMHC and PM is a Euro 3 engine variant. With mileage ranging from the lowest at 17 to the highest being 25 liters per 100 kilometers, this depending on the power of the engine (150 all the way up to 185 BHP).

A secondary benefit from the diesel engines is the exceptional increase in torque.
Torque is the power that the wheels exert onto the ground, therefore the higher the torque figure, the more powerful the acceleration.
Diesel engines due to their construction and operation have naturally a significantly higher toque than petrol engines.
This is particularly helpful in trucks, which have the tendency to be slow, due to their large weight.
This is distinctly important for the ZiL-130 since the roads in the countryside are not as of high quality as the asphalt in the city; include mud, dirt and uneven terrain and a truck can get stuck easily and have difficulty in driving off.

• The regular petrol engine gives the truck 42 Newton meters
• The replaced diesel engines offer up to 73 Nm.
  Clearly the diesel engine offers a quiet significant benefit to the truck, in addition to the reduced level of emissions and reduced fuel consumption.

ZiL-130 Utility truck / ZiL-130 Rescue truck

[European emission standards have presently 4 classifications, with two more recently proposed and still in discussion. The classification starts from Euro 1, which has the highest emissions and as the level of NOx drops by grams per kilometers (g/km) the Euro figure increases to 2, 3 and 4. Euro 4 having the lowest emissions and as such being the best figure. Currently Euro 5 and 6 are being drafted.]

2.7 Environmental impact
In the past, 15 to 20 years ago, the amounts of toxic gases expelled into the air in Moldova was dominated by the Industrial sector. This has drastically changed over the years as exports and imports into new territories, off-limits to Moldova during the Soviet occupation, has skyrocketed the volume of pollution of which 90-95% is accounted by vehicles.

Road transport accounts for the largest part of toxic emissions into the atmosphere in Moldova, as it’s the most used means of transportation of people and especially international transport of goods, in and out of the country. In order to continue to be able to carry out freight, Moldova’s truck fleet must adhere to the environmental regulations imposed by the European Union.

Figure 14 shows the evolution of the Euro standards for emission. The more cleaner fleet of truck units a truckload carrier posses, the more permits said company will be able to obtain, and thus allow it to increase its output. The trend is to lower the amount of all pollutants by as much as possible and as quick as possible. These ever-growing requirements produce effects in the truck development industry as well as to owners of trucks and forces changes in vehicle manufacturing and usage:

• Fuel consumption directly affects the amount toxic emissions produced by a vehicle. Therefore a truck which uses less fuel will have a smaller carbon footprint.
• Aerodynamics play a very important role in emissions. The more aerodynamically efficient the shape of the truck is, the less air resistance there will be for it. Less air resistance means easier engine power is required to drive a truck at a certain speed. This means that an engine in such a truck will burn less fuel, than an engine which must produce more power to overcome the friction with air. Less fuel being used means fewer emissions.
• Where possible, the top freight companies who have access to multiple methods of transport, tend to combine shipping, as to reduce their companies’ emissions.
• Proper vehicle selection must be made by the trucking company, as to maximize freight space needed for transport of its cargo, so as to not have a truck too weak power wise to move the weight of the cargo or so powerful that too much energy is wasted on nothing.
• Changes in truck development also bring forward new technological alternatives, such as the development of hybrid diesel-electric trucks, so as to not always rely on diesel trucks.
• Improvements in powertrain (engine, transmission, differential, etc.) design, in order to have better fuel economy and increase fuel efficiency. Such braking systems which recharge the car battery while braking.
• Quickest routes must be selected in order to lower the distance a truck must travel, which will save the company fuel consumption money and also reduce pollutants produced.
• Tyre companies are pressured into developing better and more fuel efficient tyres for trucks and tailors.

1. Austria
   Austria is a well developed market economy and has a large service sector and receives high demand in foreign exports for Austrian goods. Nearly 80% of the countries’ vehicle fleet is made up of trucks with a load capacity of over 20 tonnes.
   Austria has 200,000 kilometers of motorways, all of which is paved (100%).
   In 2011, 345 million tones of products and goods were transported by Austrian truck units (lorries which have a load capacity of a minimum of 2 tonnes, and road tractors) with a combined number of laden journeys totaling 26.1 million. This is an increase in transport volume of 4.1% in comparison to 2010.

Due to the 2008 crisis and the introduction of Euro vehicle standards in the same year has lowered the amount of vehicle replacement all-across-the-board. Therefore the numbers of new vehicles being purchased and replacing aging fleets has fallen significantly. This means that for the most part, statistically the number of vehicles above 5 and 10 years has increased; however the number of transport vehicles above 15 years of age has decreased.

As many of the trucking companies took a blow when the recession stricken and due to demand for purchase of goods lowered, so did the need for goods to be transported.

3.2 Truckload Carrier – LKW Walter
LKW Walter a transport organization is the market leader for European full truck loads.
It is an independent and privately owned family business in Austria.
It was established 88 years ago in 1924.
Today the company employees over 1,400 workers.
LKW Walter has over 1,000,000 full truck loads transported each year and has had a
turnover in the last year of 1.5 billion Euros.
Their analysts are expecting another turnover of 1.5 billion Euros in 2012.
Over 3,500 daily FTL orders.
They pride themselves in social responsibility and environmental responsibility.

They have achieved market leadership through permanent innovation and adaptation to the changes in the transport industry and economic development. They are also part of several European working groups which have a say in truck driver conditions and the standardization of safety of the truck loads in Europe.

3.3 Popular trucks in use
They have a large truck fleet at disposal at any given time, also through transport partners, and they amass over 5,000 cranable trailers and have 800 swap bodies, which allow the company to handle large amount of orders every single day.

LKW Walter’s most iconic and popularly used truck is the DAF XF which has the most appearances in LKW Walter commercials and other advertising media. DAF Trucks NV is a Dutch truck manufacturing company and is a subsidiary of PACCAR Inc, the third largest manufacturer of heavy-duty trucks in the world, after Daimler AG and Volvo. DAF exists as a company since 1928 and produced their first truck in 1949.

The XF range of trucks is regarded as one of the most successful truck models ever produced, with the XF 105 winning the International Truck of the Year award in 2007; DAF trucks have also won in the past and have also been very close to the first spot over the course of the awards existence.

As with all successful truck models, the XF has also had adaptations for army usage. The XF- 105 has sold over 12,500 units and is available in Euro 4 and Euro 5 engine specifications. In April 2012 DAF announced that Euro 6 engines specifications have become available, which further reduces toxic emissions by over 75% in comparison to Euro 5 engines. Euro 6 emission requirements will come into force across the European Union on the 1st of January 2014, two years from now.
The DAF XF truck is equipped with a 12.9 liter six cylinder engine, available in 410, 460 and 510 BHP engine variations and a torque figure of 2,000, 2,300 and 2,500 Nm respectively. DAF trucks have a reputation for having the most economical trucks in Europe, which reduce expenses on fuel by 10-15% n comparison to other trucks.
Other tractor units which LKW Walter employees are:

• Scania Topline
• Mercedes-Benz Actros
• Man TGX
• Volvo FH Globetrotter

3.4 Environmental Impact
LKW Walter has a strong self-imposed responsibility in their impact on the environment. They have made it their goal to continuously decrease emissions and always find better and more environmentally friendlier ways of transporting goods for their customers.
Since the 50’s the company has been planning for truck trips which transported cargo to reduce empty mileage; therefore they would plan the trip in such a way that the way to and fro, the truck would always be actively working and transporting goods. Rather than transporting a full cargo to the destination and then driving back to the warehouse with the trailer empty, which is completely not efficient and both a waste of time, money and fuel for the company and the environment.
In addition to the normal road transport trucks LKW Walter also offers combined transport of road and rail and short sea shipping, which has also significantly helped reduce the total emissions the company makes annually. In 2011 the company has carried out 224,000 intermodal (combined) transports thought out Europe; and from this they were able to reduce their CO2 emissions for the year by 114,500 tonnes.

LWK Walter also cooperates with international environmental organizations which help to improve the environmental standards.
If Moldova is to try and become a stronger contender in the European truckload carrier business, then these are the kinds of examples they should be following and standards they should be trying to achieve: fuel efficiency, environmental self-awareness, reduction of emissions and reduction of “empty mileage”.

Conclusion
Strengths:
Geographically positioned as an intermediary between West and East (EU and CIS)
Lowest operational cost in Europe
Export demand increasing

Weaknesses
Political instability
Inadequate monetary policies
Corruption
Aging truck fleet
Poor Euro standards
Poor infrastructure

Opportunities
Substantial investments and loans from various organizations and countries into enhancing of road infrastructure
WTO leverage as a member
EU dominates Moldovan exporting
destinations

Threats
Ukraine produces difficulties in trading with CIS
Russian-Ukrainian conflict

4.2 Evaluation

As the study has shown Moldova’s export sector is can only be as good as the means of getting the goods from place to place. Moldova clearly has a lot of potential in its reach and is located as the cross-road between EU and CIS, which offers tremendous opportunity from growing from its exports.

Moldova’s location is very beneficial for its participation in the EU-CIS trade and even though they have been having on-going problems with Ukraine in regards to pricing and taxes, Moldova is a WTO member and can use this as a leverage to reduce the threats from Ukraine, which is aspiring to become a WTO member.

The demand for Moldovan exported goods is on the rising and the only thing that needs to be covered is the enhancements of the infrastructure, which will allow for more goods to be transported to destination countries as well as faster and fresher (as the majority of exports are perishable goods).
Moldova has a lot of weaknesses which are to be expected with developing countries, however with the ongoing help from the IMF, and other large organizations which have been both loaning and investing into the countries budget, as well as giving helping hands with their researches and ’10 step plans’ to quicken Moldovan development.

4.3 Recommendations
Therefore the recommendation is for the national road network infrastructure to be continuously maintained. Economically it’s been proved that it will save a significant amount of money from the state budget if it’s invested into maintaining the roads, rather than repairing the damages caused by bad roads.
There will be an increase in export of goods from the agriculture and agro-industry as they will have better means of transporting it to other countries: quicker, fresher and in larger quantities. This in turn will benefit the state and will make Moldova more competitive on the international market.
Having a much improved road network up to EU standards will bring Moldova closer towards their main objective of becoming an EU member state and more integrated into the EU economic circuit, especially in the EU-CIS trades.