Overview
209. The international transportation industry has many unique features that require special attention when BOP transactions are measured. Various modes of transport (including sea, air, rail, road, space, and waterways) may be employed, and this chapter discusses the use of enterprise surveys to measure the BOP transactions associated with each of these modes. The implications, for the measurement of transportation services, of the point-of-valuation convention adopted for transactions in goods adds to the complexity of recording transportation industry transactions in the BOP. The BOP treatment of mobile equipment is discussed in chapter 10, paragraphs 442-451; chapter 12, paragraphs 492-507 provide details on the compilation of transportation services. Both of these sections should be read, in conjunction with this chapter, when the compiler is developing international transportation surveys.
210. It is necessary to distinguish between owners and operators of mobile equipment (see discussion in chapter 12, paragraphs 493-503), and the compiler should, when using international transportation surveys, have a clear grasp of this distinction. International transportation services are provided by operators, who may not necessarily be the owners, of equipment. Owners, however, can engage in BOP transactions (such as operational leasing) that are related to transportation.
211. A number of entities may be approached for information relevant to the BOP. For services provided by equipment owned or operated by residents, the resident entity should be a good source of data. The resident owner or operator should also be able to report information on services related to transportation and acquired from nonresidents. Local branches of nonresident companies often possess, or have access to, relevant information on activities of their head offices. Agents for nonresident operators may have reliable information on services provided and expenses incurred by operators when agents are involved in the provision of services or the payment of expenses. A resident operator may also act as an agent for a nonresident principal, and the resident transport operator may be approached to report in this capacity. Resident enterprises that supply transportation-related goods or services to nonresident principals should know the values of goods and services supplied. Importers may know the value of freight paid. (See the discussion in paragraphs 149-151 of chapter 4.) Government authorities who collect various port charges could also have relevant data.
Model Collection Forms
212. Model form 7 requests the type of data that a compiler could collect from a resident transport operator. In part A of the model form, data items include selected transportation earnings and selected expenses incurred abroad. Three categories of passenger fares are collected: nonresident travelers on international routes (passenger service credits), nonresident travelers on domestic routes (travel credits), and resident travelers on international routes. The latter is not a BOP item, but collection may be useful for compiling passenger fares earned by nonresident operators (passenger service debits). (See the discussion in chapter 12, paragraph 520.) Four freight items are collected: (1) freight on imports, which is not a BOP item but may be used indirectly—as chapter 12, paragraph 505 notes—in compiling freight earned by nonresident operators (transportation debits); (2) freight on exports (transportation credits); (3) freight—earned from nonresidents—on operations in the home economy (transportation credits); and (4) freight on other foreign routes (transportation credits). Remaining items that pertain to earnings include inward mail (transportation credits), charter of vessels without crews (operational leasing credits), and other earnings. For the last item, the BOP classification should be determined by the description provided.
213. While all of the details that model form 7 requests for expenses are not required as standard BOP components, separate identification should ensure that complete data are reported. Details sought include expenses on fuel and provisions (goods debits), charters of vessels without crews (operational leasing debits), and advertising (miscellaneous business, professional, and technical service debits). Remaining expense items are included in transportation. The more detailed items may also be of analytic interest to users of BOP statistics.
214. Part B of the form collects information—which may be required for projecting goods imports—on expected equipment purchases, and part C collects information on passenger fare sales and revenue, which are discussed in paragraphs 218-219 of this chapter.
215. Model form 8 seeks the type of data that a compiler may collect from resident enterprises providing goods and services to nonresident transport operators or acquiring services from them. Part A of the form includes fuel and provisions (goods credits), advertising (miscellaneous business, professional, and technical service credits), and a number of other items that are included in transportation credits. The collection of detailed information should ensure complete reporting of items and may be of interest to users of BOP statistics as supplementary information. Part A of the form requires information on transactions in which resident enterprises provide services and settle directly with nonresident principals (items 1 through 8) and information on transactions in which resident enterprises arrange for services provided by other residents (items 9 through 16). Data are required on a settlements basis, as in an ITRS. The two sections could be combined, in practice, as long as reporting rules are clearly understood.
216. Part B collects data on passenger ticket sales and passenger fare revenue, which are discussed in paragraphs 218-219 of this chapter; part C collects details of various services—such as inland freight (freight debits) and mail (other transportation service debits)—provided by nonresidents to residents.
217. In practice, model forms could be modified so that separate forms are designed for each mode of transport (in the case of resident operators reporting on form 7) or for each type of entity being approached (in the case of form 8).
Passenger Fares—Travel Revenue or Ticket Sales
218. The compiler has two broad options for measuring passenger fares; he or she may collect information on the basis of travel revenue or on the basis of ticket sales. (See the discussion in chapter 12, paragraphs 508-510.) In international transportation surveys, data on both ticket sales and passenger fare revenue could be collected. This approach is adopted in model forms 7 and 8. Judgments could then be made about adjustments appropriate for deriving a reliable passenger fare earnings figure.
219. Data on passenger fare commissions paid by nonresident operators are collected, via model forms, in two parts: (1) on ticket sales in form 8, part B and (2) on revenues turned over by the resident operator to nonresident operators in form 7, part C.
International Shipping Surveys
The Statistical Unit
220. To use a survey approach for collecting data on international shipping activity, the compiler must first determine the statistical unit for which data are to be collected. For example, data may be collected about operations of individual vessels or about operators of those vessels.
221. Lloyd’s of London has developed an international shipping register that lists a reference number, vessel name, country of registration (or national flag), owner’s name and address, vessel description, type (tanker, passenger cruise vessel, bulk carrier, etc.), and capacity for each vessel. A compiler could use register data in surveying operations of individual vessels or in linking individual vessels to owners or other principals. In a shipping register, the name of the lessor (typically a financial institution) is usually recorded for a vessel operated under financial lease. For BOP and national accounting purposes, however, the lessee is regarded as the owner. Other names (and addresses) recorded as owners may, in fact, be nominees rather than actual owners.
Collection Strategy
222. It should be possible to collect accurate and relevant data from resident enterprises in respect of their international transportation transactions. There may be some complex operational arrangements (described in chapter 10, paragraphs 449-451) but, with clear instructions to the reporting entities involved, these should not be a problem. Sometimes it may be difficult to identify all resident owners and operators; the compiler may have to use an exploratory survey or attempt to identify owners or operators from a shipping list. The use of shipping lists is discussed in paragraphs 229-231.
223. It may be difficult, if not impossible, to obtain information from nonresident principals because a statistical compiling agency is generally not in a position to require nonresident companies to report. On the other hand, a significant part of the shipping may be handled by a small number of nonresident companies that have local branches or agents with thorough knowledge and records of nonresidents’ earnings and expenses; such is most likely to be true for petroleum transportation and the transportation of major export or import commodities. Agents should be defined to include branches of nonresident companies acting on behalf of their head office principals, resident shipping owners and/or operators who act as agents for nonresident principals, and importers and exporters who act as agents. Overlap may occur if more than one collection approach is adopted. For example, a petroleum importer may be both a branch of a nonresident company and an acting shipping agent for its nonresident parent. Shipping agents could also be asked to report details of agent fees earned from nonresident principals.
224. Alternatively, it may be possible to collect data on freight on imports from other sources, such as a survey of importers, and to deduct resident operators’ shares from survey data in order to derive an estimate of freight on imports earned by nonresidents. Techniques for doing so are outlined in chapter 12, paragraphs 505-507.
225. In respect of inland freight earned by nonresident operators, only a small number of operators with relatively few clients (who may also act as agents for nonresident principals) may be involved. Therefore, collection of data may be a straightforward matter. If this activity is more widespread, an exploratory survey may be needed to identify the principals, their agents, or enterprises using the freight services.
226. In respect of other transportation services (such as passenger services and mail) provided by nonresident operators, it should not be difficult to identify resident entities acquiring these services or arranging the sale of such services on behalf of nonresident principals. In many instances, the sales office may be a branch of the nonresident operator.
227. Data on services (such as stevedoring and provisioning) supplied to nonresident operators may be obtained by approaching suppliers of those services—if suppliers can distinguish between services provided to resident operators and those provided to nonresident operators. Similarly, government authorities could be approached to obtain details of fees charged.
228. Alternatively, agents for nonresident operators could be asked to supply details of all expenses met by them on behalf of their principals.
229. It can be difficult to determine whether coverage of shipping operators is complete. In some countries, all vessels that enter and leave ports can be identified from lists supplied by port authorities or other sources. Such lists could be used to ensure that resident shipping enterprises and agents for nonresident shipping enterprises supply data in respect of each vessel entering and leaving a country’s waters. Resident shipping companies and agents could report on the basis of each voyage, on the basis of a consolidated period, or on a vessel at a single port. Some shipping conferences may be able to report all member operations taking place during a quarter. When reporting is done on a consolidated basis, a list of vessels and ports visited should also be provided to ensure that there is no duplication or omission in reporting. It is not unusual for different agents to act for one vessel in different ports. Account should be taken of such arrangements when collection methodologies are determined.
230. To obtain a list of vessels owned or operated by residents and operating abroad during an entire reference period, the compiler could approach resident enterprises directly, consult the Lloyd’s register, or consult trade journals. A combination of such methods is likely to give the best results and may identify resident owners or operators previously unknown to the compiler.
231. Lists of ships could also be employed to facilitate sample surveys (at least for measurement of nonresident earnings and expenses), and the use of such lists could alleviate some of the reporting burden on shipping agents.
232. Insufficient resources may make it difficult or impossible for compilers to collect information on individual vessels. In such cases, compilers must provide clear reporting rules for shipping owners, operators, and agents to follow to ensure complete coverage and avoid duplication.
233. Circumstances arising from flags of convenience should also be noted. Most countries have legislation on shipping registration. Some frame their legislation (usually by imposing fewer obligations and costs) to attract shipping company registrations and thus generate fees for national authorities. The compiler should examine registrations and, as a result, may discover that:
the registering entity is a resident owner and operator
the registering entity, including shell or brass plate companies that charter vessels without crews to other enterprises, is a resident owner [If enterprises chartering vessels are nonresident entities, charter fee earnings (other business services) should be recorded, and the nonresident enterprises should be treated as the operators.]
the registering entity is a nonresident owner [Registration fees (government current transfer credits) should be recorded.]
the registering entity is a resident agent acting for a nonresident owner. [Registration fees (government current transfer credits) and fees earned by the agent (other transportation credits) should be recorded.]
234. In the first two instances, the ship should be recorded as an import if it has been acquired from a nonresident enterprise. The economic ownership of the vessel may also be transferred, typically by way of long-term financial lease, to a nonresident entity after registration. In such cases, the export of a ship should be recorded. Some compilers consider such a treatment—in the case of shell or brass plate companies—to be a distortion of BOP accounts because gross imports and exports (which may be large in value) essentially represent book entries. On the other hand, not recording these ships on a gross basis makes compilation of world BOP aggregates very difficult. As a compromise, compilers may consider ignoring shell and brass plate companies, recording in their national presentations only the registration fees and expenses, and compiling complete accounts as supplementary items for purposes of reporting to the International Monetary Fund. The articulation of this treatment is set out in chapter 16, paragraphs 705-711.
International Airline Surveys
The Statistical Unit
235. The statistical unit in surveys of the international airline industry is generally the airline operator, and this fact presents no major problems. However, there are a number of financing and leasing arrangements of which the compiler should be aware.
236. Financing of aircraft is often undertaken under financial lease arrangements. The treatment of financial leases is straightforward; therefore, the compiler should have no difficulty in imputing a change of ownership to the airline operator when necessary and in measuring the transport activity appropriately. (The treatment of financial leasing is discussed in chapter 16, paragraphs 784-786.)
237. It is common for airlines to lease aircraft without crews from one another for several years at a time. These charters are usually known as “dry charters,” and the charterer is regarded as the operator. “Wet charters” are akin to “voyage charters,” and the plane is hired with a crew. In this case, the entity responsible for the crew is regarded as the operator, and charter payments are recorded as payments for transportation services.
238. There are some complex joint venture arrangements in the international airline industry. Various treatment options are outlined in chapter 10, paragraphs 449-451.
Collection Strategy
239. Compilers in most countries where surveys are used to collect data on international airline operations normally approach resident airline carriers and the resident offices of nonresident airline carriers. Such collections tend to be relatively small and readily managed.
240. While coverage of normal commercial operations should be easy to maintain, coverage of private charters and foreign military flights may be less easily measured. If these are missed, BOP service credits (such as airport fees in the compiling country) could be understated. Monitoring such activity should be possible in conjunction with civil airline and defense authorities.
Rail Transport
241. The BPM regards any rail system operating in a country as a resident enterprise of that country. Should part of a country’s railway system be operated in a second country, the railway system in the second country would be regarded as a resident direct investment enterprise in the host country. If a railway is jointly owned and operated in two countries, its operation should be split so that location determines residency. Rolling stock—that is, locomotives and rail cars—that remains in one economy should generally be treated as being owned and operated by that economy. Rolling stock that moves between two countries should be treated as being owned and operated by the economy in which the rolling stock is normally located. The implications of this treatment are set out in chapter 10, paragraphs 442-448.
242. Because there are relatively few railway operators in most countries, the identification of operators for purposes of collecting BOP information is straightforward. It is more difficult, however, to collect information on services provided by nonresident operators for goods that are imported to one country but transshipped through other countries. In these cases, either the importers themselves or local agents of the nonresident operators (which may include resident rail operators) could be approached for information.
Other Modes: Roads, Waterways, and Space
243. Other modes of transport include roads, waterways, and space. When an enterprise providing road transportation services operates in more than one country, the separate operations of the enterprise in each country should be regarded as resident units of those countries if separate books are maintained and if operations in each country are of a long-term nature (that is, one year or more). Trucks and buses should be assigned to entities that are residents of the economy in which the trucks and buses are normally located. Unlike rail transport, road transportation services may be provided by many entities and, as in the shipping industry, there may be many complex ownership and operation arrangements. Collection of complete data may be difficult, in practice, because of the large number of enterprises involved, the complex ownership and operating arrangements, and the necessity to split, for BOP purposes, inland freight (the carriage of goods within a country or to the border) and international transportation (the carriage of goods between borders). In addition, it may be difficult to distinguish services provided to nonresidents from those provided to residents. Although it may be difficult to obtain complete coverage of these activities, larger trucking and bus companies could be approached, and collection of the necessary data negotiated. Data on freight rates and cost factors may be obtained, and these could then be applied to some benchmark data collected by national statistical authorities on road transport activity.
244. Transportation by inland waterways should have many features in common with rail systems; relatively few operators are involved in most countries. However, in some countries, there are many operators and, in these countries, compilers could explore the possibilities for developing collection strategies similar to those described for international shipping.
245. Space transportation is essentially concerned with delivery of satellites into orbit. Change of ownership of a satellite can be regarded as having taken place when it is delivered to the buyer. The f.o.b. value of the satellite is its value at the border of the exporting country. If the satellite is launched from the country of manufacture, the cost of transporting the satellite to the launching site should be included in the f.o.b. valuation. The cost of launching the rocket should be treated as freight services. If the satellite is launched in a third country, the freight would include costs (including the cost of the launch rocket) incurred between the f.o.b. valuation and the satellite reaching orbit in space. If the satellite is launched from the owner’s country, there would be no international freight component for delivering the satellite into orbit because the service provided would be a resident-to-resident transaction.38 If the launch rocket is provided by a nonresident, the cost of the rocket should be shown as an import of goods. Details of costs involved should be readily available from the principals, who should be easy to identify.
Transactions Involving Mobile Oil Rigs and Fishing Vessels
246. Mobile oil drilling rigs are often hired for relatively short periods and without crews. These should be treated the same as shipping vessels leased, without crews, from their principals. In practice, the rigs can be readily identified from records of port authorities, and relevant data should be available from owners, operators, or lessees. The services provided by mobile oil drilling rigs hired with crews should be classified as other business services.
247. The collection of information on fishing vessels operated under license in the waters of one economy by residents of another economy requires mention. If fish caught by such vessels in the waters of host economies are considered production of those economies, services (classified as other business services) provided by nonresident fishing vessels should be recorded in the BOP. The value of these services is defined as being equal to the total value of fish caught less the license fee (not recorded as a transfer item in the BOP) payable to a host economy’s government. In addition, nonresident fishing vessels often make expenditures in host economies; these expenditures should be recorded as BOP transactions. It is likely that exports of host economies—as well as imports of economies with residents operating the fishing vessels—will, when recorded in ITS or in an ITRS, require adjustment to include fish caught but not landed in host economy ports.
248. Alternatively, fish caught by nonresident fishing vessels could be considered production of economies that operate the vessels. In this instance, licensing fees payable by nonresident fishing vessels represent BOP transfers to licensing authorities in host economies, and any expenses incurred by the vessels in host economy ports should also be recorded in the BOP. Fish landed in host economy ports should be recorded as imports of host economies and as exports of economies that operate the fishing vessels. In order to effect these recording procedures, an adjustment may be required to trade-in-goods estimates that have been compiled by using ITS.
249. Under both alternatives, when the compiling economy is the host economy, information necessary to compile BOP entries should be available from local agents for nonresident principals or from the resident licensing authority. When the compiling economy is the economy in which residents operate the fishing vessels, the necessary information should be available from principals.