Publication:
The Rail Freight Challenge for Emerging Economies: How to Regain Modal Share

Loading...
Thumbnail Image
Files in English
English PDF (3 MB)
11,054 downloads
Date
2019
ISSN
Published
2019
Editor(s)
Abstract
Moving more freight by rail and waterways would reduce greenhouse gas emissions, truck-induced congestion, and noise pollution and contribute to the integrated logistics that are now a hallmark of global supply chains. The timing for the shift is right, because many emerging economies are making significant investments in railways and shippers are responding to public sentiment to reduce the negative impacts of road-related logistics. In the past, most railway organizations adopted a “build and they shall come” approach, modeled on the proposition that lower rail transportation costs would inevitably lead to modal shift. That approach is no longer viable. Successful railways now focus on understanding the logistics of targeted freight and positioning rail transport services as part of an overall logistics system aimed at meeting customers’ needs. By responding to new trends in logistics and partnering with road haulers, port operators, forwarders, intermodal terminal operators, and third-party logistics companies to provide the seamless service delivery required by changing supply chains, rail freight organizations in Europe and North America have regained modal share or reversed a trend of falling shares. Emerging economies can learn from their experience. The Rail Freight Challenge for Emerging Economies presents examples and lessons of good (and not-so-good) practice. It summarizes what successful rail freight organizations have done to increase market share and provides options for policy makers. The report is intended not to prescribe solutions but to inform decisions and broaden the discussion of options open to policy makers and senior officials in rail organizations in their country contexts.
Link to Data Set
Citation
Aritua, Bernard. 2019. The Rail Freight Challenge for Emerging Economies: How to Regain Modal Share. International Development in Focus;. © World Bank. http://hdl.handle.net/10986/31089 License: CC BY 3.0 IGO.
Associated URLs
Associated content
Report Series
Other publications in this report series
Journal
Journal Volume
Journal Issue

Related items

Showing items related by metadata.

  • Publication
    Customer-driven Rail Intermodal Logistics
    (World Bank, Washington, DC, 2015-03) Blancas, Luis C.; Ollivier, Gerald; Bullock, Richard
    Rail intermodal logistics, the movement of containerized cargo from origin to destination where a portion of the journey takes place on rail, have gained significance in North America over the past 10 to 15 years based on cost and operational efficiency. In China, however, the story has thus far been different. Considering the length-of-haul and commodity characteristics of China s manufacturing sector, the country has a persistently low incidence of rail intermodal participation in domestic and international supply chains. We find that the binding constraints behind the low incidence of rail intermodal services in China are most likely to be found on the supply side, not the demand side of the equation. Specifically, the regulatory and institutional environment, which regulate freight tariffs and provides little or no flexibility for China Railway Corporation (CRC) to tailor services to customer needs, is at the root of this challenge. This note outlines the success of railways in North America in (a) tailoring rail intermodal service offerings based on customer needs and willingness to pay; and (b) collaborating with other logistics service providers so as to concentrate on their core (rail transportation) competency, while leaving other segments of the end-to-end intermodal supply chain to those most efficient in those segments. The current policy and economic environment facing CRC seems favorable to pursuing reforms towards adopting similar practices.
  • Publication
    Urban Mass Transport Infrastructure in Medium and Large Cities in Developing Countries
    (Washington, DC, 2012) World Bank; Asian Development Bank
    Developed at the request of the Mexican G20 Presidency for consideration by the Finance Ministers and Central Bank Governors at the G20 Leaders' Summit in Mexico, and jointly prepared with the Asian Development Bank, this policy paper positioned green transport in the context of cities development. Urban transport determines the shape of a city and its ecological footprint. Many cities in low and middle income countries are at a crossroads. Policy decisions taken now, while car use is still relatively low and cities retain a relatively transit friendly, compact urban form, will affect how people will live in their cities for many decades into the future. A new paradigm of urban transport can be part of the solution to reversing the deteriorating situation in some cities of developing countries, and supporting others to embark on a sustainable, low carbon, green growth path: developing a city for people rather than cars, and including public and mass transport as a major component of the modal structure. Implementing such a new paradigm can be truly transformational. This joint World Bank and Asian Development Bank paper lays out six aspects, which are most difficult to align, yet, are critical to ensure the sustainability of urban transport systems, visionary leadership, integrated strategy for land use and urban transport, coordination among agencies, domestic capacity, adequate cost recovery, and private participation in the operation and construction of urban transport systems. The paper proposes a set of new initiatives for G20 leaders' consideration, including the development of an umbrella toolkit to guide policy makers in charge of urban planning to make transport decisions best suited to their local contexts.
  • Publication
    Uruguay - Trade and Logistics : An Opportunity - Main Report
    (World Bank, 2010-04-15) World Bank
    Globalization has brought about a rapid expansion of international trade and a dramatic change in trade structure. The liberalization of trade in goods and services, containerization, new integrated transport networks, advances in information communication technology and modern business logistics have created unprecedented business opportunities for the trade and transport industries, as firms increasingly rely on global supply chains for production and distribution. In response to the government's request, this study assesses Uruguay's potential as a logistics hub and as a regional distribution center. The competitiveness of Uruguay's logistics system is assessed from an international perspective and policy recommendations towards further efficiency gains are provided. The study focuses on policies related to enhancing domestic and regional trade facilitation and assesses the wider economic impact of such reforms on logistics costs and trade.
  • Publication
    Understanding the Operations of Freight Forwarders
    (World Bank, Washington, DC, 2015-06) Mendoza Alcantara, Alejandra; Fernandes, Ana M.; Hillberry, Russell
    Freight forwarders play a key role in moving goods across international borders. They arrange transport, oversee customs clearance on behalf of their clients, and more generally troubleshoot issues that arise while goods are in transit. This paper reports the results from a survey of 153 freight forwarding firms in Serbia. Respondents report on firm characteristics, operational choices, and conditions at the border posts and terminals where imported goods are cleared for release. One key purpose of the study is to investigate operational trade-offs between time and cost that arise when import shipments are in transit. In three of four hypotheticals, respondents suggest that money savings dominate time savings. Responses regarding real operational decisions such as route choices reinforce this finding. Respondents also reported penalty rates for late delivery of import shipments as well as the value of a typical import shipment. From these responses, it is estimated that the contracted value of one additional (unexpected) day of delivery time in Serbia appears to be approximately 1 percent of the value of the underlying shipment.
  • Publication
    The Cost of Being Landlocked : Logistics Costs and Supply Chain Reliability
    (World Bank, 2010) Marteau, Jean-François; Arvis, Jean-François; Raballand, Gaël
    In the last two decades new emphasis has been given to the economic impact of geography, especially on the cost of being landlocked. From a development perspective, understanding the cost of being landlocked and its economic impact is critical, since one country of four in the world is landlocked (almost one out of three in Sub-Saharan Africa). Attempts to address the cost of being landlocked have mainly focused on regional and multilateral conventions aiming at ensuring freedom of transit, and on the development of regional transport infrastructure. The success of these measures has been limited, and many massive investments in infrastructure seem to have had a disappointing impact on landlocked economies. Although there may still be an infrastructure gap, this book, based on extensive data collection in several regions of the world, argues that logistics and trade services efficiency can be more important for landlocked countries than investing massively in infrastructure. Logistics have become increasingly complex and critical for firms' competitiveness, and a weakness in this field can badly hurt firms based in landlocked countries. This book proposes a revised approach to tackling the cost of being landlocked and a new analytical framework which uses a microeconomic approach to assess the trade and macroeconomic impacts of logistics. It takes into account recent findings on the importance of logistics chain uncertainty and inventory control in firms' performance. It argues that: (i) exporters and importers in landlocked developing countries face high logistics costs, which are highly detrimental to their competitiveness in world markets, (ii) high logistics costs depend on low logistics reliability and predictability, and (iii) low logistics reliability and predictability result mostly from rent-seeking and governance issues (prone to proliferate in low volume environments).

Users also downloaded

Showing related downloaded files

  • Publication
    World Development Report 2017
    (Washington, DC: World Bank, 2017-01-30) World Bank Group
    Why are carefully designed, sensible policies too often not adopted or implemented? When they are, why do they often fail to generate development outcomes such as security, growth, and equity? And why do some bad policies endure? This book addresses these fundamental questions, which are at the heart of development. Policy making and policy implementation do not occur in a vacuum. Rather, they take place in complex political and social settings, in which individuals and groups with unequal power interact within changing rules as they pursue conflicting interests. The process of these interactions is what this Report calls governance, and the space in which these interactions take place, the policy arena. The capacity of actors to commit and their willingness to cooperate and coordinate to achieve socially desirable goals are what matter for effectiveness. However, who bargains, who is excluded, and what barriers block entry to the policy arena determine the selection and implementation of policies and, consequently, their impact on development outcomes. Exclusion, capture, and clientelism are manifestations of power asymmetries that lead to failures to achieve security, growth, and equity. The distribution of power in society is partly determined by history. Yet, there is room for positive change. This Report reveals that governance can mitigate, even overcome, power asymmetries to bring about more effective policy interventions that achieve sustainable improvements in security, growth, and equity. This happens by shifting the incentives of those with power, reshaping their preferences in favor of good outcomes, and taking into account the interests of previously excluded participants. These changes can come about through bargains among elites and greater citizen engagement, as well as by international actors supporting rules that strengthen coalitions for reform.
  • Publication
    Global Economic Prospects, June 2025
    (Washington, DC: World Bank, 2025-06-10) World Bank
    The global economy is facing another substantial headwind, emanating largely from an increase in trade tensions and heightened global policy uncertainty. For emerging market and developing economies (EMDEs), the ability to boost job creation and reduce extreme poverty has declined. Key downside risks include a further escalation of trade barriers and continued policy uncertainty. These challenges are exacerbated by subdued foreign direct investment into EMDEs. Global cooperation is needed to restore a more stable international trade environment and scale up support for vulnerable countries grappling with conflict, debt burdens, and climate change. Domestic policy action is also critical to contain inflation risks and strengthen fiscal resilience. To accelerate job creation and long-term growth, structural reforms must focus on raising institutional quality, attracting private investment, and strengthening human capital and labor markets. Countries in fragile and conflict situations face daunting development challenges that will require tailored domestic policy reforms and well-coordinated multilateral support.
  • Publication
    Africa's Future, Africa's Challenge : Early Childhood Care and Development in Sub-Saharan Africa
    (Washington, DC : World Bank, 2008) Garcia, Marito; Pence, Alan; Evans, Judith L.
    This book seeks to achieve a balance, describing challenges that are being faced as well as developments that are underway. It seeks a balance in terms of the voices heard, including not just voices of the North commenting on the South, but voices from the South, and in concert with the North. It seeks to provide the voices of specialists and generalists, of those from international and local organizations, from academia and the field. It seeks a diversity of views and values. Such diversity and complexity are the reality of Sub-Saharan Africa (SSA) today. The major focus of this book is on SSA from the Sahel south. Approximately 130 million children between birth and age 6 live in SSA. Every year 27 million children are born, and every year 4.7 million children under age 5 die. Rates of birth and of child deaths are consistently higher in SSA than in any other part of the world; the under-5 mortality rate of 163 per 1,000 is twice that of the rest of the developing world and 30 times that of industrialized countries (UNICEF 2006). Of the children who are born, 65 percent will experience poverty, 14 million will be orphans affected by HIV/AIDS directly and within their families and one-third will experience exclusion because of their gender or ethnicity.
  • Publication
    The Container Port Performance Index 2023
    (Washington, DC: World Bank, 2024-07-18) World Bank
    The Container Port Performance Index (CPPI) measures the time container ships spend in port, making it an important point of reference for stakeholders in the global economy. These stakeholders include port authorities and operators, national governments, supranational organizations, development agencies, and other public and private players in trade and logistics. The index highlights where vessel time in container ports could be improved. Streamlining these processes would benefit all parties involved, including shipping lines, national governments, and consumers. This fourth edition of the CPPI relies on data from 405 container ports with at least 24 container ship port calls in the calendar year 2023. As in earlier editions of the CPPI, the ranking employs two different methodological approaches: an administrative (technical) approach and a statistical approach (using matrix factorization). Combining these two approaches ensures that the overall ranking of container ports reflects actual port performance as closely as possible while also being statistically robust. The CPPI methodology assesses the sequential steps of a container ship port call. ‘Total port hours’ refers to the total time elapsed from the moment a ship arrives at the port until the vessel leaves the berth after completing its cargo operations. The CPPI uses time as an indicator because time is very important to shipping lines, ports, and the entire logistics chain. However, time, as captured by the CPPI, is not the only way to measure port efficiency, so it does not tell the entire story of a port’s performance. Factors that can influence the time vessels spend in ports can be location-specific and under the port’s control (endogenous) or external and beyond the control of the port (exogenous). The CPPI measures time spent in container ports, strictly based on quantitative data only, which do not reveal the underlying factors or root causes of extended port times. A detailed port-specific diagnostic would be required to assess the contribution of underlying factors to the time a vessel spends in port. A very low ranking or a significant change in ranking may warrant special attention, for which the World Bank generally recommends a detailed diagnostic.
  • Publication
    World Development Report 1984
    (New York: Oxford University Press, 1984) World Bank
    Long-term needs and sustained effort are underlying themes in this year's report. As with most of its predecessors, it is divided into two parts. The first looks at economic performance, past and prospective. The second part is this year devoted to population - the causes and consequences of rapid population growth, its link to development, why it has slowed down in some developing countries. The two parts mirror each other: economic policy and performance in the next decade will matter for population growth in the developing countries for several decades beyond. Population policy and change in the rest of this century will set the terms for the whole of development strategy in the next. In both cases, policy changes will not yield immediate benefits, but delay will reduce the room for maneuver that policy makers will have in years to come.