E-Commerce Diffusion in Serbia; Bob Travica – The Traffic Infrastructure Layer; Draft 2.1, Nov. 4, 2005

1. Traffic Infrastructure Layer

The most basic layer in our pyramidal model of e-commerce refers to traffic infrastructure—roads, air traffic facilities, railroads, and waterways (Travica, 2002). These provide support for delivery services required both in B2C and B2B e-commerce. Our model assumes that an optimal traffic infrastructure needs to provide for diverse and efficient delivery services. In this section, we describe the traffic infrastructure in Serbia, and make occasional comparisons with neighboring countries.

1.1. Roads and Railroads

The land traffic infrastructure in Serbia rests on a well-developed intercity road network that is comparable in terms of density and pavement type to that of the most advanced Central and East European countries (World Bank, 2003). The total length of roads is 42,692 km, where 24,860 km are paved roads (Serbia Info, 2001). Roads provide for the main transportation route in Serbia. Since ancient times, the Morava river valley has played the central role in making Serbia the crossroads between the North and South, and East and West. It houses the major road in the country—the cross-Europe highway E-75 that starts in Norway and end in Greece. This highway belongs to one of Europe’s main transportation routes known as “Corridor 10” that links Austria with Greece, running through the Balkans and having several branches. (ECMT, 2005; see Figure 2)

Another important road is the international highway E-70 that starts in Spain and, via Romania, ends in Turkey. E-70 makes the westward part of Corridor 10, connecting Serbia with Croatia. E-75 and E-70 intersect in Belgrade, the capital of Serbia. Important is also the road between Nis (the second largest city in Serbia) and Sofia, the capital of Bulgaria. This is a branch of Corridor 10 that links to Corridor 4 (Figure 2). The link is important because, in a way, Corridor 4 competes with Corridor 10 as it bypasses Serbia (originates in Germany, and runs through Hungary, Romania, and Bulgaria to Greece and Turkey). Yet, another important road is E-763, the B-category route that links Serbia with Montenegro.

The layout of the roads and their inclusion in European Union’s strategic corridors create favorable conditions for the commercial traffic in Serbia. Some economic experts contend that the country can become a transportation hub (World Bank, 2003). In addition, the degree of the development of inter-city network creates a potential for increasing the reach of delivery that e-commerce may require. Note that the availability of diverse means of transportation discussed in this section has the same effect. However, the scenario of economic development capitalizing on transportation opportunities is far from being uncontested. One difficulty refers to a poor condition of the road network. The funding of road maintenance has decreased dramatically in the 1990s. Unsustainable tariff and financial policies and mismanagement of available funds have resulted in a significant de-capitalization of the transportation sector and in lagging behind the neighboring countries (cf. World Bank, 2003). Serbia spends only $570 per kilometer of road maintenance, which is 26 times less than what is spent in developed European countries (USAID, 2005).

The railroad traffic infrastructure in Serbia involves over 3,808.5 kilometers of rails (one third being electrified). Backbone lines make over 40% of the entire network. (Railways of Serbia, 2004). These are included in Corridor 10 (Figure 2). Serbia is connected by rails with all the neighboring countries and with three seas. A railroad between Serbia connects Belgrade in Serbia with the largest seaport Bar in Montenegro.

NATO’s air strikes on Serbia in 1999 caused a significant damage to railroad bridges. For example, just on the Danube river, eight bridges were destroyed, some carrying important international traffic (Danube Research, 2004). The bridges have been made operational to different degrees in the meantime. Development prospects of the railroads are, again, related to integration into European flows of transport and commerce. Part of Corridor 10 mentioned above is a 500 kilometer-long segment of the high-speed railway line that should enter the country from Hungary and exit to Bulgaria. The project is underway and it should be completed by 2010 (Srbija Info, 2005).

1.2. Airway and Waterways

The air traffic infrastructure in Serbia consists 36 airports (both paved and unpaved) and a few heliports. Main airports are in Belgrade, Nis (both international), and Novi Sad. (See Airports in Serbia, 1998; International Flight Information Manual, 2005.) During the international trade sanctions imposed in Serbia in the 1990s, the air traffic dwindled down to utilizing several domestic routes. The Belgrade Airport, which used to be a hub for Yugoslav air traffic and the gateway to international traffic, lost its prominence. The lack of need and income reflected on the maintenance and asset renewal capabilities of this and other airports. NATO’s bombing raids in 1999 additionally deteriorated the situation.

In contrast to the state of air traffic infrastructure, Serbia’s waterways may be exhibiting stronger signs of vitality. There area several significant waterways that support both domestic and international traffic. Here belong the rivers Danube, Sava, Morava, Tisa, and Tamis. All but the Morava flow over Serbia’s borders. The Danube River is crucial since it flows through ten European countries over 2,850 km (1,771 miles), connecting west and east Europe, and the North Sea with the Black Sea. To signify its importance, European Union promoted the Danube into a corridor in its own right (Corridor 7; see Figure 2). With the commissioning of the Rhine-Main-Danube Canal in September 1992, the ports in Near East have become closer to Europe. By the same token, the importance of the countries lined up along the Danube banks has been raised. They can also benefit from links between Corridor 7 and four other corridors, including corridors 10 and 4 that are important for Serbia.

The stretch of the Danube through Serbia amounts for about 20% of its length (Serbia Info, 2001). Three bigger ports are in Serbia: Novi Sad, Belgrade, and Smederevo. Port Novi Sad is important as the entry point for the pan-European traffic. The Belgrade port is significant not only as a Danube port but also as a crossroads, for that is where the Danube and the Sava meet, and Corridor 7 (the Danube) and Corridor’s 10 intersect (indeed, two parts of this corridor—the main trunk and north wing; see Figure 2). Some observers posit that the Danube can present a particular economic advantage for the country (USAID, 2005). Serbian economy also uses the seaport of Bar, which lies in Montenegro on the Adriatic Sea.

Summary

The roads in Serbia have a broad reach and some are included in what is know as the European Corridor 10. The roads seem to create an opportunity for supporting changing patterns of delivery that e-commerce may require, as implied in our model of e-commerce. However, these advantages are somewhat offset by the roads’ condition, which may have a diminishing effect on efficiency of the road transportation—another requirement for e-commerce. In addition, the railroads of Serbia are eleven times shorter than the roads network. The railroads contribute to the diversity of cargo transportation routes.

The air traffic infrastructure of Serbia rests on 36 airports (two international) and a few heliports. This infrastructure has been downgraded by the detrimental political and economic processes in the 1990s. finally, Serbia houses a solid network of waterways crowned by the Danube River. This river, known as Corridor 7, links Serbia internationally. Terrestrial and water routes link Serbia with three seas. There are opinions that Serbia may seek its development opportunities in the internal and cross-border transport sector. From the perspective of conditions for e-commerce diffusion, the traffic infrastructure as a whole supports the condition of means diversity, while ranking lower on the condition of efficiency.

References:

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Appendix

Figure 2. European corridors running through Serbia

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