Publication:
What Drives the High Price of Road Freight Transport in Central America?

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dc.contributor.authorOsborne, Theresa
dc.contributor.authorPachon, Maria Claudia
dc.contributor.authorAraya, Gonzalo Enrique
dc.date.accessioned2014-05-14T21:05:29Z
dc.date.available2014-05-14T21:05:29Z
dc.date.issued2014-04
dc.description.abstractIn Central America, like many other developing regions, high transport costs are cited as an impediment to trade and economic growth. Prices for road freight transport -- a key mode of transport comprising a significant share of total transport costs for intra- and extra-regional trade, are particularly high. Averaging 17 cents per ton-kilometer on main trading routes, these rates stand out even relative to other inefficient developing country markets (e.g., central and west Africa). However, the policy and other factors associated with increased prices have not been well understood. This paper uses data from a survey of trucking companies operating on the region's main trade corridors to analyze the determinants of firms' costs of providing service, as well as the effect of market structure and competition on prices. The analysis finds that whereas improved cost efficiencies could reduce prices by 3 cents per ton-kilometer, increased competition on national routes -- those entirely within a nation's borders -- would reduce prices by significantly more. Although there are many trucking companies, including small and somewhat informal operators, the degree of competition varies by route because of domestic restraints on competition and the prohibition on international competition on national routes. The paper shows empirically that imperfect competition accounts for at least 35 percent of mean prices on national routes. In addition, a lack of competition is likely to explain the persistence of an inefficient market structure, as well as a lack of innovation to reduce costs and enhance the quality of service.en
dc.identifierhttp://documents.worldbank.org/curated/en/2014/04/19432378/drives-high-price-road-freight-transport-central-america
dc.identifier.doi10.1596/1813-9450-6844
dc.identifier.urihttps://hdl.handle.net/10986/18325
dc.languageEnglish
dc.language.isoen_US
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Paper;No. 6844
dc.rightsCC BY 3.0 IGO
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo/
dc.subjectAIR
dc.subjectAIR FREIGHT
dc.subjectAIRPORT
dc.subjectAIRPORTS
dc.subjectAVERAGE COSTS
dc.subjectAVERAGE PRICE
dc.subjectAVERAGE PRICES
dc.subjectAVERAGE SPEED
dc.subjectAVERAGE SPEEDS
dc.subjectAVERAGE TRAVEL SPEEDS
dc.subjectBANK LOANS
dc.subjectBARRIERS TO ENTRY
dc.subjectBERTRAND COMPETITION
dc.subjectBITUMEN
dc.subjectBORDER CROSSING
dc.subjectBORDER CROSSINGS
dc.subjectBOTTLENECKS
dc.subjectCARGO
dc.subjectCOMPETITIVE MARKETS
dc.subjectCOMPETITIVE PRICES
dc.subjectCONGESTION COSTS
dc.subjectCONSTRUCTION
dc.subjectCONSUMERS
dc.subjectCORRIDOR
dc.subjectCORRIDOR TRANSPORT
dc.subjectCOST ANALYSIS
dc.subjectCOST OF TRANSPORTATION
dc.subjectDEREGULATION
dc.subjectDEVELOPMENT POLICY
dc.subjectDOMESTIC MARKETS
dc.subjectDOMESTIC ROUTES
dc.subjectDRIVER BEHAVIOR
dc.subjectDRIVERS
dc.subjectDUTY
dc.subjectECONOMETRIC ANALYSIS
dc.subjectECONOMIC INTEGRATION
dc.subjectECONOMIC THEORY
dc.subjectECONOMIES OF SCALE
dc.subjectEFFICIENT MARKET
dc.subjectELASTICITIES
dc.subjectELASTICITY
dc.subjectEMISSION
dc.subjectENDOGENOUS VARIABLES
dc.subjectEQUATIONS
dc.subjectEXPENDITURES
dc.subjectEXPORT
dc.subjectFACTOR PRICES
dc.subjectFARES
dc.subjectFINANCIAL INCENTIVES
dc.subjectFIXED COSTS
dc.subjectFLEET SIZE
dc.subjectFLEETS
dc.subjectFOREIGN COMPETITION
dc.subjectFREIGHT
dc.subjectFREIGHT COSTS
dc.subjectFREIGHT DELIVERY
dc.subjectFREIGHT FLOWS
dc.subjectFREIGHT SECTOR
dc.subjectFREIGHT TRANSPORT
dc.subjectFREIGHT TRANSPORT PRICES
dc.subjectFUEL
dc.subjectFUEL COST
dc.subjectFUEL COSTS
dc.subjectFUEL EFFICIENCY
dc.subjectFUEL PRICES
dc.subjectFUEL SAVINGS
dc.subjectFUEL-EFFICIENCY
dc.subjectFUELS
dc.subjectGDP
dc.subjectGRAVEL
dc.subjectHIGH TRANSPORT
dc.subjectIMPERFECT COMPETITION
dc.subjectINCOME
dc.subjectINFLATION
dc.subjectINPUT PRICES
dc.subjectINTEREST RATE
dc.subjectINTERNATIONAL PORTS
dc.subjectINTERNATIONAL STANDARDS
dc.subjectINTERNATIONAL TRADE
dc.subjectINVENTORIES
dc.subjectLENGTH OF ROUTE
dc.subjectLOCAL AUTHORITIES
dc.subjectMAIN ROAD
dc.subjectMARKET ACCESS
dc.subjectMARKET BEHAVIOR
dc.subjectMARKET CONCENTRATION
dc.subjectMARKET SEGMENT
dc.subjectMARKET SEGMENTATION
dc.subjectMARKET SEGMENTS
dc.subjectMARKET STRUCTURE
dc.subjectMERCHANDISE
dc.subjectMERCHANDISE EXPORTS
dc.subjectMERCHANDISE TRADE
dc.subjectMIDDLE INCOME COUNTRIES
dc.subjectMILEAGE
dc.subjectMODE OF TRANSPORT
dc.subjectMOTOR CARRIER
dc.subjectMOTOR CARRIERS
dc.subjectMOTORISTS
dc.subjectNORMAL PROFITS
dc.subjectOIL PRICES
dc.subjectOLIGOPOLY
dc.subjectOPPORTUNITY COST
dc.subjectOPPORTUNITY COSTS
dc.subjectPETROLEUM PRICES
dc.subjectPOLICE
dc.subjectPREDATORY PRICING
dc.subjectPRICE SETTING
dc.subjectPRODUCTIVITY GROWTH
dc.subjectPROFIT MARGINS
dc.subjectPURCHASE PRICE
dc.subjectRANGE
dc.subjectREDUCTIONS IN TRAFFIC
dc.subjectREDUCTIONS IN TRAFFIC CONGESTION
dc.subjectROAD
dc.subjectROAD CABOTAGE
dc.subjectROAD CONDITIONS
dc.subjectROAD DAMAGE
dc.subjectROAD QUALITY
dc.subjectROAD TRANSPORT
dc.subjectROAD TRANSPORT PRICES
dc.subjectROAD TRANSPORT SERVICES
dc.subjectROADS
dc.subjectROUTE
dc.subjectROUTES
dc.subjectSALES
dc.subjectSERVICES MARKET
dc.subjectSTRUCTURES
dc.subjectTARIFF BARRIERS
dc.subjectTAX
dc.subjectTIRE PRESSURE
dc.subjectTIRES
dc.subjectTON KILOMETER
dc.subjectTOTAL COSTS
dc.subjectTOTAL OUTPUT
dc.subjectTRACTORS
dc.subjectTRADE BARRIERS
dc.subjectTRAFFIC
dc.subjectTRAFFIC CONGESTION
dc.subjectTRANSPORT COSTS
dc.subjectTRANSPORT INDUSTRY
dc.subjectTRANSPORT MODE
dc.subjectTRANSPORT OF GOODS
dc.subjectTRANSPORT SECTOR
dc.subjectTRANSPORT STRATEGIES
dc.subjectTRANSPORT TARIFFS
dc.subjectTRANSPORTATION
dc.subjectTRANSPORTATION SERVICES
dc.subjectTRAVEL DISTANCES
dc.subjectTRAVEL SPEED
dc.subjectTRAVEL SPEEDS
dc.subjectTRIPS
dc.subjectTRUCKING
dc.subjectTRUCKS
dc.subjectTRUE
dc.subjectVARIABLE COSTS
dc.subjectVARIABLE INPUTS
dc.subjectVEHICLE
dc.subjectVEHICLE EMISSIONS
dc.subjectVEHICLE FLEET
dc.subjectVEHICLE OPERATING
dc.subjectVEHICLE OPERATING COST
dc.subjectVEHICLE OPERATING COSTS
dc.subjectVEHICLE UTILIZATION
dc.subjectVEHICLES
dc.subjectVOLUME OF TRAFFIC
dc.subjectWAGES
dc.subjectWAREHOUSES
dc.titleWhat Drives the High Price of Road Freight Transport in Central America?en
dspace.entity.typePublication
okr.crossref.titleWhat Drives the High Price of Road Freight Transport in Central America?
okr.date.disclosure2014-04-01
okr.date.doiregistration2025-04-10T11:31:23.389289Z
okr.doctypePublications & Research::Policy Research Working Paper
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/2014/04/19432378/drives-high-price-road-freight-transport-central-america
okr.globalpracticeMacroeconomics and Fiscal Management
okr.globalpracticeTransport and ICT
okr.globalpracticeFinance and Markets
okr.guid364161468212970549
okr.identifier.doi10.1596/1813-9450-6844
okr.identifier.externaldocumentum000158349_20140424140635
okr.identifier.internaldocumentum19432378
okr.identifier.reportWPS6844
okr.language.supporteden
okr.pdfurlhttp://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2014/04/24/000158349_20140424140635/Rendered/PDF/WPS6844.pdfen
okr.region.administrativeLatin America & Caribbean
okr.region.geographicalCentral Africa
okr.topicMacroeconomics and Economic Growth::Markets and Market Access
okr.topicTransport Economics Policy and Planning
okr.topicTransport::Airports and Air Services
okr.topicEconomic Theory and Research
okr.topicRoads and Highways
okr.unitSustainable Development Department, Latin America and the Caribbean Region
okr.volume1 of 1
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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