Publication: Why Cargo Dwell Time Matters in Trade
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Date
2012-05
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2012-05
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The international community has been increasing investment in projects that promote trade facilitation and improve logistics in the developing world, including in ports. In Africa, a key motivation for such projects has been a presumption that poor infrastructure and inefficient border control agencies are the major causes of extended delays in sub-Saharan Africa (SSA) ports. Based on new data and analysis, this note argues that collusion between controlling agencies, port authorities, private terminal operators, logistics operators, and large shippers is an important part of the problem. Decreasing dwell times in ports requires governments to combat collusive practices between the private sector and public authorities and recognize that large-scale investments in infrastructure are not sufficient to reduce logistics delays.
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“Refas, Salim; Raballand, Gael; Beuran, Monica; Isik, Gozde. 2012. Why Cargo Dwell Time Matters in Trade. Economic Premise; No. 81. © World Bank. http://hdl.handle.net/10986/10039 License: CC BY 3.0 IGO.”
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Publication Why Does Cargo Spend Weeks in Sub-Saharan African Ports? Lessons from Six Countries(Washington, DC: World Bank, 2012)This study is timely because several investments are planned for container terminals in Sub-Saharan Africa. From a public policy perspective, disentangling the reasons behind cargo delays in ports is crucial to understanding:a) whether projects by the World Bank and other donors have addressed the most salient problems; and b) whether institutional port reform and infrastructure, sometimes complemented by customs reform, are the most appropriate approaches or should be adapted. Without such identification and quantification, projects may ultimately result in a limited impact, and structural problems of long delays will remain. Dwell time figures are a major commercial instrument used to attract cargo and generate revenues. Therefore, the incentives for a port authority and a container terminal operator are increasingly strong to lower the real figure to attract more cargo. At the same time, ports are more and more in competition, so the question of how to obtain independently verifiable dwell time data is increasingly critical to provide assurance that interventions are indeed having the intended effect.Publication The Impact of Demand on Cargo Dwell Time in Ports in SSA(World Bank, Washington, DC, 2012-03)Long cargo dwell times in ports are a critical issue in Sub-Saharan African countries since they result in slow import processes and are bound to dramatically reduce trade. The main objective of this study is to analyze long dwell times' causes in ports in Sub-Saharan Africa from a shipper's perspective. The findings point to the crucial importance of private sector practices and incentives. The authors argue in the case of Sub-Saharan African countries that private operators, rather than being advocates of reforms in this area, might be responsible for the failures of many of these initiatives. It seems that in Sub-Saharan Africa importers' and freight forwarders' professionalism, cash constraints and operators' strategies are some of the factors that have a major impact on cargo dwell time. Low competency, cash constraints and low storage tariffs explain why most importers have little incentive to reduce cargo dwell time since in most cases, this would increase their input costs. However, monopolists/cartels may have a stronger incentive to reduce cargo dwell time but only in order to maximize their profit (and would not adjust prices downward).Publication Cargo Dwell Time in Durban : Lessons for Sub-Saharan African Ports(2011-09-01)Based on quantitative and qualitative data, this paper attempts to identify the main reasons why cargo dwell time in Durban port has dramatically reduced in the past decade to a current average of 3-4 days. A major customs reform; changes in port storage tariffs coupled with strict enforcement; massive investments in infrastructure and equipment; and changing customer behavior through contractualization between the port operator and shipping lines or between customs, importers, and brokers have all played a major role. The main lesson for Sub-Saharan Africa that can be drawn from Durban is that cargo dwell time is mainly a function of the characteristics of the private sector, but it is the onus of public sector players, such as customs and the port authority, to put pressure on the private sector to make more efficient use of the port and reduce cargo dwell time.Publication Why Does Cargo Spend Weeks in African Ports? The Case of Douala, Cameroon(2011-02-01)This paper investigates the main factors explaining long container dwell times in African Ports. Using original and extensive data on container imports in the Port of Douala, it seeks to provide a basic understanding of why containers stay on average more than two weeks in gateway ports in Africa while long dwell times are widely recognized as a critical hindrance to economic development. It also demonstrates the interrelationships that exist between logistics performance of consignees, operational performance of port operators and efficiency of customs clearance operations. Shipment level analysis is used to identify the main determinants of long cargo dwell times and the impact of shipment characteristics such as fiscal regime, density of value, bulking and packaging type, last port of call, and region of origin or commodity group on cargo dwell time in ports is tested. External factors, such as performance of clearing and forwarding agents, shippers and shipping line strategies, also play an important role in the determination of long dwell times. Cargo dwell time distribution has many specificities, including broad-tail, high variance or right-censoring, which requires in-depth statistical analysis prior to any design of policy recommendations.Publication Port and Maritime Transport Challenges in West and Central Africa(World Bank, Washington, DC, 2007-05)This Working Paper presents the current trends in maritime transport and port sectors in West and Central Africa (WCA), and proposes several policy recommendations to improve maritime transport and port efficiency in order to enhance economic growth. West and Central African economies, which depend on maritime transport for an overwhelming proportion of their trade, rely on efficient maritime transport and port sectors to be competitive on world markets. This paper was prepared for the Sub-Saharan Africa Transport Policy Program (SSATP), in the overall context of the World Bank's efforts for trade facilitation in Sub- Saharan Africa2 as a follow-up to the 1997 Second Cotonou meeting of West and Central Africa (WCA) Ministers.
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