Transport Prices and Costs in Africa

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1 Transport Prices and Costs in Africa A Review of the Main International Corridors Supee Teravaninthorn Gael Raballand THE WORLD BANK Washington, DC

2 Foreword Acknowledgments Abbreviations xi xiii XV Chapter 1 Chapter 2 Chapter 3 Introduction and Overview Past Research on Transport Prices and Costs Scope and Methodology of This Study Analysis of the Transport Environment Policy Recommendations Trucking in Africa Compared with Other Regions Global Comparisons Regional Perspectives Market Regulation, Competition, and Prices in the Trucking Industry Key Logistics and Market Characteristics of the Transport Corridors West Africa

3 vi Chapter 4 Chapter 5 Chapter 6 Chapter 7 Central Africa The Northern Corridor in East Africa The North-South Corridor in Southern Africa Main Determinants of Transport Prices and Trucking Profitability Heterogeneity of Transport Prices in Africa The Importance of Rail Competition for Road Freight Prices Profitability Determinants The Impact of Cartels on Transport Prices and Quality Impact of Freight-Sharing Schemes Truck Age and Utilization Cartels Fleet Size Transport Costs Determinants Typology of Trucking Companies in Africa Operating Costs in the Subregions The Importance of Variable Costs Breakdown of Fixed Costs Public Procedures and the Opportunity Cost of Delays The Impact of Road Conditions on Transport Costs Road Conditions in the Study Corridors How Road Conditions Affect Operating Costs Chapter 8 The Trucking Market in Africa: Perceptions and Reality 85

4 vii Chapter 9 Assessment of Policy Options Policies for West and Central Africa Policies for East Africa Policies for Southern Africa Chapter 10 Chapter 11 Implications for Economic and Fiscal Analysis and for Data Collection 97 Finance Regular Studies of Transport Prices and Costs Determinants 97 Improve the Economic Analysis of Road Projects 98 Assess the Impact of Fiscal Policies on Transport Services. 100 Note 101 Conclusions, Recommendations, and the Role of International Development Agencies 103 Key Findings and Conclusions Recommendations 105 The Role of Development Partners 106 Map 1 References Annex 1 Annex 2 Annex 3 Annex 4 African Landlocked Countries Bank Support for Africa Transport Corridors Note Data Methodology and Reliability 1. Data Selection 2. Variable Description 3. Regression Analysis Sample Survey Design and Data Quality Control An Example with Cameroon Sample Size Freight Allocation through Freight Bureaus: The Cases of Central and West Africa

5 viii Annex 5 Zambia's Road Freight Industry and Business Practices in Southern Africa Index 139 Boxes 5.1 History and Impact of the Queuing System in France Captured Market Regulation: Cargo Reservation Schemes in Maritime Transport 51 Figures 1.1 Various Definitions Related to Transport Average Transport Prices: A Global Comparison in Transport Quality Worldwide Based on the Logistics Performance Index in Transport Services in Africa Expensive and Low Quality in Average Truck Mileage in Selected Developing Countries in Cost and Price Trends before and after Market Deregulation in France, Average Transport Prices from Mombasa to Kigali, Number of Registered Heavy Trucks in Rwanda A Typology of Transport Corridors in Africa Based on Market Access Road-Rail Price Competition in Main International Routes Transport Quality Index Based on the Trucking Survey Results Fleet Age and Yearly Mileage The Vicious Circle of Transport Prices and Costs in a Strongly Regulated Environment 58 Tables 1.1 Measures and Outcomes in West and Central Africa Measures and Outcomes in East Africa Measures and Outcomes in Southern Africa Comparative Transport Costs, Africa and Europe (Eastern and Western) in