LOGISTICS AND PORTS Pablo Guerrero Transport Senior Specialist Washington D.C. February 3 rd 2016
1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 KEY ISSUES In a global context in which the world s major economies are more open to trade than ever before, freight logistics and trade facilitation are key competitive factors, opportunities for improvement exist in both fields GENERAL FEATURES The logistics industry acts as a driving force for private sector development and for the growth of the different economic sectors of a region Trade facilitation is also a critical factor to boost exports and imports in a given region Success in export markets is increasingly affected by the ability of countries to support an environment which promotes efficient and low cost trade services and international logistics 140 120 100 80 60 40 20 TRADE (% OF GDP) World LAC Caribbean small states 0 SOURCE: Caribbean Regional Action Plan on Freight Logistics, Maritime Transport and Trade Facilitation. Javier Erice
KEY ISSUES In a global context in which the world s major economies are more open to trade than ever before, freight logistics and trade facilitation are key competitive factors, opportunities for improvement exist in both fields. Key issues that affect LAC logistics performance: Infrastructure availability Trucking services Market consolidation Impact of congestion on supply chains
SOURCE: Freight Transport and Logistics Yearbook, Regional Observatory, IDB (2015) KEY ISSUES: INFRASTRUCTURE AVAILABILITY Region lags behind on key aspects of infrastructure development that hinders logistic service innovation 100 40 35 90 80 70 35 30 30 25 60 25 20 50 20 40 15 15 30 20 10 10 5 10 5 0 Jamaica Barbados Bahamas Panama Nicaragua Mexico Honduras Guatemala El Salvador Costa Rica Belize Road Network Paved (% total) Uruguay Surinam Peru Paraguay Guyana Ecuador Colombia Chile Brazil Bolivia Argentina OECD* 0 Trinidad and Tobago Jamaica Haiti Dominican Republic Barbados Bahamas Panama Nicaragua Mexico Honduras Guatemala El Salvador Costa Rica Belize Venezuela Uruguay Suriname Peru Paraguay Guyana Ecuador Colombia Chile Brazil Bolivia Argentina Int l airports with cargo terminal facilities (#) Comparator Group Average Australia, Canada, Japan, Spain and USA 0 Trinidad and Tobago Jamaica Haiti Dominican Republic Barbados Bahamas Panama Nicaragua Mexico Honduras Guatemala El Salvador Costa Rica Belize Venezuela Uruguay Suriname Peru Paraguay Guyana Ecuador Colombia Chile Brazil Bolivia Argentina Container Terminal Extent of Competition (# terminals) Comparator Group Average Australia, Canada, Japan, Spain and USA
US$ TKm Average shipping cost (US$/km) KEY ISSUES: TRUCKING SERVICES Transport costs have a major impact on the final price of goods, raw materials and intermediate goods and the competitiveness of domestic products in the international market. Long distances travelled, low productivity and high fuel consumption per ton transported On average, older fleets result in higher tariffs $0.50 7 PA $0.45 6 $0.40 $0.35 5 RD $0.30 4 $0.25 $0.20 $0.15 $0.10 $0.05 3 2 1 HO CR LAC Average GU NI CO MX US $0.00 Trinidad and Tobago Dominican Republic Jamaica Haiti Barbados Bahamas Panama Nicaragua Mexico Honduras Guatemala El Salvador Costa Rica Belize Average Freight Tariff (USD per metric ton) Venezuela Uruguay Suriname Peru Paraguay Guyana Ecuador Colombia Chile Brazil Bolivia Argentina OECD* 0-15,000 30,000 45,000 60,000 75,000 90,000 105,000 120,000 135,000 150,000 165,000 Average annual kilometer (Km/veh year) SOURCE: Freight Transport and Logistics Yearbook, Regional Observatory, IDB (2015)
< 1991 1992-95 1996-99 2000-04 > 2005 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% KEY ISSUES: TRUCKING SERVICES Transport costs have a major impact on the final prices of goods, prices of raw materials and intermediate goods and the competitiveness of domestic products in the international market. Long distances travelled, low productivity and high fuel consumption per ton transported On average, older fleets result in higher tariffs Chile Colombia Mexico Central America Heavy-duty vehicles engine (%) Before-Euro Euro 1 Euro 2 Euro 3 Euro 4 + SOURCE: Freight Transport and Logistics Yearbook, Regional Observatory, IDB (2015)
KEY ISSUES: MARKET CONSOLIDATION Unprecedented market consolidation: service-sharing alliance
KEY ISSUES: MARKET CONSOLIDATION Unprecedented market consolidation: service-sharing alliance 2M Maersk (Denmark) Mediterranean Shipping (Switzerland) Ocean Three (O3) G6 United Arab Shipping Co China Shipping Container Lines CMA CGM (France) IRISL (Islamic Republic of Iran Shipping Lines) Hyundai Merchant Marine Co (South Korea) APL (Singapore) Hapag-Lloyd (Germany) Mitsui O.S.K. Lines (Japan) Nippon Yusen Kaisha (Japan) Orient Overseas Container Line (Hong Kong) CKYH+Evergreen China Ocean Shipping (Group) Company Kawasaki Kisen Kaisha, Ltd (Japan) Yang Ming Marine Transport Corporation Hanjin Shipping Co. Ltd ( South Korea) Evergreen Marine Corporation (Taiwan) Alphaliner - Top 100 : Operated fleets 30% TEU 1,110 ships 17% TEU 611 ships 17% TEU 762 ships 14% TEU 473 ships
78% of global capacity 2,956 vessels Shipping conglomerates include terminal operation and inland services
KEY ISSUES: MARKET CONSOLIDATION CARGO SUPPORT EQUIPMENT MAINTENANCE Handling Packing Fumigation Customs clearance Storage Cargo inspections Terminal handling equipment Gensets Rubber-tire gantries Powerpacks Equipment leasing INLAND TRANSPORTATION CONTAINER LIFECYCLE MANAGEMENT Trucking Shunts Store door Intermodal Rail Repairs Reefer care engineering Modifications Container inspections Sales Julian Fernández. APM Terminals
KEY ISSUES: MARKET CONSOLIDATION WAREHOUSING CONTROL AND INTEGRATION SYSTEMS INTERMODAL SERVICES
KEY ISSUES: MARKET CONSOLIDATION Large transformations to come along the supply chain with recent M/As
KEY ISSUES: MARKET CONSOLIDATION Large transformations to come along the supply chain with recent M/As Including cross-border U.S-Mexico intermodal services And the largest road-based operator in Brazil 1 4 2 2015 2015 5 2014 6 3 2015 2015 7
KEY ISSUES: MARKET CONSOLIDATION Large transformations to come along the supply chain with recent M/As Pricey warehouse rental price in top LAC destination $1,600 $1,400 $1,200 $1,200 $1,400 $1,300 $1,200 $1,200 $1,000 $800 $600 $400 $200 $600 $700 $900 $500 $700 $300 $600 $1,000 $650 $400 $700 $0 $100 $100 ZLC Corredor Sur and Panama City Toronto Montreal Palm Beach New Jersey (norh) Los Angeles Pittsburg Miami-Dade Panama Canada USA SOURCE: Industrial/Logistics Market Report, Panamá, Year-End 2013, North America - Industrial Outlook Q1 2013, Jones Lang LaSalle.
KEY ISSUES: IMPACTS OF CONGESTION ON SUPPLY CHAINS
KEY ISSUES: IMPACTS OF CONGESTION ON SUPPLY CHAINS São Paulo Typical Congestion SOURCE: Methodology to Analyze and Quantify the Impacts of Congestion on Supply Chains in Latin-American Cities. Rensselaer Polytechnic Institute (RPI), project funded by the IDB
KEY ISSUES: IMPACTS OF CONGESTION ON SUPPLY CHAINS São Paulo Typical Congestion SOURCE: Methodology to Analyze and Quantify the Impacts of Congestion on Supply Chains in Latin-American Cities. Rensselaer Polytechnic Institute (RPI), project funded by the IDB
IDB S AGENDA FOR FREIGHT LOGISTICS INNOVATION IN LAC PRIORITY ACTION AREAS TYPICAL SECTORS AND PROBLEMS PRIORITIES FOR LOW-MIDDLE INCOME COUNTRIES PRIORITIES FOR HIGH-MIDDLE INCOME COUNTRIES Basic infrastructure development Trunk highways, rural roads, maintenance Basic infrastructure (primary and rural roads) Road maintenance Increase capacity Bypasses of urban areas Access to ports Transport services and regulation Ports, railways First generation reforms Increase operational efficiency Second generation reforms Regulations adjustment Increase investment, PPPs Services provided by the State Customs, border crossings More efficient customs procedures Reduced dispatch time Domestic security Integrated control Unified paperless inspection Increase security, reduce corruption Private sector development support Transport and logistics operators, logistics parks, HR Professionalization of transport operators and freight forwarders Access to technology Finance HR development Logistics platforms, regional hubs Logistics outsourcing 3PL development Institutional strengthening Logistics councils and freight transport and logistics observatories Strengthening and coordination of government offices Training Data collection Emphasizes the need for public policy development, public-private coordination and data-driven analysis Coordination across areas and among jurisdictions Private sector participation Public officials training
IDB S AGENDA FOR FREIGHT LOGISTICS INNOVATION IN LAC Implementing logistics agendas in LAC: management and investment models Includes projects and technical assistance since 2010. (Does not include road investment) Type of intervention US$ M Technical Assistance country level 7.1 Regional Technical Assistance 5.8 Reimbursable Technical Assistance 60 Freight Transport Observatories (regional and countries) 2.9 PBL (Policy Based Loan) 1,485 Border Crossings 180 Logistics Platforms 20 Ports and Canals 890 Total 2,635
THANK YOU! PabloGU@iadb.org @pablogbid iadb.org/es/topics/transportation blogs.iadb.org/moviliblog