Table 5 - uploaded by Gael Raballand
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Based on a detailed empirical study, this paper argues that regional liberalization of trucking services has had an important effect on transport costs and tariffs for Zambia's economy. Zambia is a peculiar example in Southern Africa as it benefits from relatively low transport costs compared with other landlocked countries in Africa. This is mainl...
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Context 1
... Zambian companies operating in the sub-region (and not exclusively on the domestic market), fuel costs are lower than their counterparts operating only on the Zambian market because truckers usually fill tanks outside Zambia, avoiding high fuel costs in Zambia. For such Zambian companies operating in the sub- region, costs are cut to 1.35 USD per km or 4.0 USD cents per tkm, i.e., less than a South African-based operator (see Table 5 for a breakdown of VOCs). South African companies allocate a higher share of their costs to finance, depreciation and insurance because of prohibition of South African companies to import second-hand vehicles whereas Zambian operators allocate higher share to fuel costs since they are allowed to import second-hand trucks and have, therefore, finance, depreciation and insurance costs lower. ...
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Citations
... For example, in Malawi, Tanzania and Zambia the structure of government fertiliser subsidy programmes and anticompetitive arrangements in fertiliser trading have restricted competition in transport . On the other hand, regulation to ease entry in trucking and open up to competition from different countries reduced trucking rates on certain cross-border routes from Zambia Raballand et al., 2008). ...
... For non-refrigerated transport we consider a benchmark rate for efficient transport in the region of $0.04 per tkm for several reasons. This rate is in line with the lower bound of rates for the Lusaka-Johannesburg route which is considered by transporters and in previous studies to be the most competitive in Southern Africa with high demand and several different trucking companies from South Africa, Zambia and Zimbabwe competing to supply services (Raballand et al. 2008;Teravaninthorn & Raballand, 2009). Given current constraints in terms of border delays, we argue that this rate could be even lower than the average $0.06 per tkm and closer to international comparators. ...
... The price charged for the same route in 2015 appears to have come down further by around 26% to $122/ton (or $0.08 per tkm). This is consistent with the findings that routes to and from Zambia (Lusaka) have become more competitive and cheaper in recent years due in part to greater rivalry from foreign transporters (some of which have subsidiaries registered in Zambia) (Raballand et al., 2008;. However, there are exchange rate effects and decreases in fuel prices during 2015 that have an important impact. ...
... The trucking companies in South Africa were able to utilize their trucks at levels similar to European transporters 10,000 to 12,000 kilometers per month and up to 240,000 km per year [8]. Zambia; a landlocked country in Africa has typical distance target for road transport operator is 130,000 km per annum per truck [9]. Furthermore, the road transport industry in Kenya is large and well equipped with average distance coverage between 120,000-150,000 km/truck/year in most efficient trade corridors [10]. ...
This research aimed to assess the organizational structure of cross border dry cargo transport operators and their operation performance in Ethiopia. In order to achieve the intended objective of the study, this research employed mixed research approach and cross-sectional survey research strategy. For this study, 319 samples were taken using systematic sampling and key informants were also taken for interview through judgmental sampling. The sources of data were both primary and secondary collected through questionnaires, interviews and document review. For data analysis both descriptive and inferential statistics were employed. The findings of the study shows that cross border dry cargo transport operators in Ethiopia are organized in three forms: Association, Company and Private Owners. Associations are the largest in number with highly fragmented and loosely organized structure and have low level of operation performance than others. Most of the transport operator, particularly Associations have no operation performance target and proper operation performance measurement and recording systems using key performance indicators. The overall operation performance of the operators is low to medium. The analysis of variance (ANOVA) shows that, there is a significant difference among operators on their level of operation performance for the three groups with Sig. value (p=0.000<0.05). The post-hoc test indicates that Associations operation performance is significantly different from Companies and Private Owners with Sig value (p=0.000>0.05). On the other hand, the level of operation performance of Companies is not significantly different from Private Owners with Sig value (p=0.950>0.05). Thus, to improve the operation performance of transport operators, the government should give due attention to the organizational structure of cross border dry cargo transport operators.
... Key concepts include the definition of a landlocked and transcontinental nation, and the parameters of multi-vectored foreign policy, exit strategy and soft power. The commonly accepted and used definition of a 'landlocked country' describes it as a nation that is entirely enclosed by the landmass of neighbouring states or inland seas and lakes (Raballand 2003;Faye et al 2004;Arvis et al 2007;Raballand 2008;Idan & Shaffer 2011). In this regard, Kazakhstan, located at the centre of the huge Eurasian supercontinent, is a typical example of a landlocked country. ...
... The paradox of Kazakhstan's situation is that it is both landlocked and transcontinental. On the one hand, in the academic literature landlocked status is usually regarded as a barrier to the economic growth of any nation (Radelet and Sachs 1998;Limao and Venables 2001;Raballand et al 2005;Collier 2008;Raballand 2008). On the other hand, being a transcontinental nation is considered a major advantage, as this is seen as more conducive to the promotion of free trade (Werner 2003;Munro 2006;Finon and Locatelli 2008;Liu 2010;Vinokurov and Libman 2012;Fallon 2015;Li et al 2015). ...
Examining Kazakhstan's foreign policy through the lens of its position as the largest landlocked, and transcontinental, country in the world, the paper presents a multidimensional analysis of the unique soft power strategy adopted recently by this nation in promoting its various international initiatives in its region. In doing so, the paper attempts to understand the implications of Kazakhstan's distinctive geopolitical setting at the heart of Eurasia for regional integration and security-building initiatives that have been proposed and actively supported by this transitional nation. The paper focuses on investigating key political and socioeconomic aspects of the country's location at the intersection of Europe and Asia and analyses whether a symbiotic relationship exists between Kazakhstan's multi-vectored foreign policy and the wide range of its international initiatives aiming to promote economic development, partnership and peaceful coexistence between various nations in the region. The key findings and generalizations of the research will facilitate better understanding of the implications of landlocked geography for the direction of foreign policy, using concrete examples and manifestations of political decisions made in the area.
... However, creating One-Stop Border Posts (OSBPs) without changing procedures and processes will not have a major economic impact. 16 For more information on the various types of protection in the trucking industry, see Raballand et al. (2008). 17 This mainly concerns the DRC. ...
Structural transformation in Africa has become a hot topic. One of the earliest stylized facts of development economics is that low-income countries have large differences in output per worker across sectors, and movement of workers from low- to high-productivity sectors—structural transformation is a key driver of economic growth. Between 1950 and 2006, about half of the catch-up by developing countries—led by East Asia—to advanced economy productivity levels was due to rising productivity within manufacturing combined with structural transformation out of agriculture. Manufacturing has the capacity to employ large numbers of unskilled workers, is capable of large productivity gains through innovation, and entails tradeable products that permit economies of scale and specialization. But manufacturing in Africa, rather than leading growth, has typically been a lagging sector. In 2014, the average share of manufacturing in GDP in sub-Saharan Africa hovered around 10 per cent, unchanged from the 1970s, leading some observers to be pessimistic about Africa’s potential to catch the wave of sustained rapid growth and rising incomes. This book challenges that view. It argues that other activities sharing the characteristics of manufacturing–including tourism, ICT, and other services as well as food processing and horticulture—are beginning to play a role analogous to the role that manufacturing played in East Asia. This reflects not only changes in the global organization of industries since the early era of rapid East Asian growth, but also advantages unique to Africa. These ‘industries without smokestacks’ offer new opportunities for Africa to grow in coming decades. © United Nations University World Institute for Development Economics Research (UNU-WIDER) 2018.
... For example, in Malawi, Tanzania and Zambia the structure of government fertiliser subsidy programmes and anticompetitive arrangements in fertiliser trading have restricted competition in transport (Ncube et al., 2017). On the other hand, regulation to ease entry in trucking and open up to competition from different countries reduced trucking rates on certain cross-border routes from Zambia (Raballand et al., 2008;Ncube et al., 2017). ...
... For non-refrigerated transport we consider a benchmark rate for efficient transport in the region of $0.04 per tkm for several reasons. This rate is in line with the lower bound of rates for the Lusaka-Johannesburg route which is considered by transporters and in previous studies to be the most competitive in Southern Africa with high demand and several different trucking companies from South Africa, Zambia and Zimbabwe competing to supply services (Raballand et al., 2008;Teravaninthorn & Raballand, 2009). Given current constraints in terms of border delays, we argue that this rate could be even lower than the average $0.06 per tkm and closer to international comparators. ...
... The price charged for the same route in 2015 appears to have come down further by around 26% to $122/ton (or $0.08 per tkm). This is consistent with the findings that routes to and from Zambia (Lusaka) have become more competitive and cheaper in recent years due in part to greater rivalry from foreign transporters (some of which have subsidiaries registered in Zambia) (Raballand et al., 2008;Ncube et al., 2017). However, there are exchange rate effects and decreases in fuel prices during 2015 that have an important impact. ...
This paper focuses on key areas for reducing transport costs in Southern Africa emerging from recent research on cross-border freight between Malawi, Mozambique, South Africa, Zambia and Zimbabwe. We consider the impact of competition, border delays and lack of return loads on transport rates which could be reduced significantly through increased availability of return loads for transporters, linked to growing industrial capacity in each country. Furthermore, increased competition and reducing delays for transporters contributed to a large reduction in transport rates between Lusaka and Johannesburg, with similar effects from Malawi. Margins charged in refrigerated transport are high due to low levels of rivalry and lack of return loads. Measures to reduce border constraints and enable greater rivalry between transporters from different countries could have a downward effect on transport rates in the region which are shown to be above benchmarks for efficient transport.
... However, this will not improve the competitive position of Rwanda's industry and may in fact reduce it, due to the advantages that Kenya and Tanzania hold in the pursuit of business within their own territories [original emphasis] (Argent and Milanovic 2014). Raballand et al. (2007) argue that lifting cabotage regulation and third-country rules in relation to Zambia would probably have a muted effect on the transport sector in Zambia: ...
... As in Malawi, cross-border transport is impacted by foreign companies-in this case, South African companies (see Raballand et al. 2007). As a result, some companies do not venture into South Africa and choose to operate on routes into Namibia, Zimbabwe, Malawi, and the Democratic Republic of Congo, which are more lucrative and have less competition from South African truckers. ...
... However, this will not improve the competitive position of Rwanda's industry and may in fact reduce it, due to the advantages that Kenya and Tanzania hold in the pursuit of business within their own territories [original emphasis] (Argent and Milanovic 2014). Raballand et al. (2007) argue that lifting cabotage regulation and third-country rules in relation to Zambia would probably have a muted effect on the transport sector in Zambia: ...
... As in Malawi, cross-border transport is impacted by foreign companies-in this case, South African companies (see Raballand et al. 2007). As a result, some companies do not venture into South Africa and choose to operate on routes into Namibia, Zimbabwe, Malawi, and the Democratic Republic of Congo, which are more lucrative and have less competition from South African truckers. ...
... However, this will not improve the competitive position of Rwanda's industry and may in fact reduce it, due to the advantages that Kenya and Tanzania hold in the pursuit of business within their own territories [original emphasis] (Argent and Milanovic 2014). Raballand et al. (2007) argue that lifting cabotage regulation and third-country rules in relation to Zambia would probably have a muted effect on the transport sector in Zambia: ...
... As in Malawi, cross-border transport is impacted by foreign companies-in this case, South African companies (see Raballand et al. 2007). As a result, some companies do not venture into South Africa and choose to operate on routes into Namibia, Zimbabwe, Malawi, and the Democratic Republic of Congo, which are more lucrative and have less competition from South African truckers. ...
... For more information on the various types of protection in the trucking industry, seeRaballand et al. (2008).19 This mainly concerns the DRC. ...
... In the case of Zambia, the introduction of a single permit system between Zambia, Zimbabwe and South Africa in the early 2000s made a significant difference ( Meeuws 2004). This meant that Zimbabwean and South African trucking companies could operate along the corridors alongside Zambian companies such that Zambian truckers held only around a 40% market share on the main corridors, even while restrictions on cabotage and the third-country rule remained ( Raballand et al. 2007). The influx of competition from regional trucking companies into the Zambian market has, over time, reduced transport costs to be on par with costs in South Africa. ...
