The Cost of Being Landlocked: Logistics Costs and Supply Chain Reliability

81 Pages Posted: 20 Apr 2016

Date Written: June 1, 2007

Abstract

A large proportion of the least developed countries are landlocked and their access to world markets depends on the availability of a trade corridor and transit systems. Based on empirical evidence from World Bank projects and assessments in Africa, Central Asia, and elsewhere, this paper proposes a microeconomic quantitative description of logistics costs. The paper theoretically and empirically highlights that landlocked economies are primarily affected not only by a high cost of freight services but also by the high degree of unpredictability in transportation time. The main sources of costs are not only physical constraints but widespread rent activities and severe flaws in the implementation of the transit systems, which prevent the emergence of reliable logistics services. The business and donor community should push toward implementation of comprehensive facilitation strategies, primarily at the national level, and the design of robust and resilient transport and transit regimes. A better understanding of the political economy of transit and a review of the implementation successes and failures in this area are needed.

Keywords: Transport Economics Policy & Planning, Transport and Trade Logistics, Common Carriers Industry, Economic Theory & Research, Rural Roads & Transport

Suggested Citation

Arvis, Jean-Francois and Raballand, Gael and Marteau, Jean-Francois, The Cost of Being Landlocked: Logistics Costs and Supply Chain Reliability (June 1, 2007). World Bank Policy Research Working Paper No. 4258, Available at SSRN: https://ssrn.com/abstract=995079

Jean-Francois Arvis (Contact Author)

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Gael Raballand

World Bank ( email )

1818 H street N.W.
Washington, DC 20433
United States

Jean-Francois Marteau

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

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