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Transport and Logistics in Lao PDR: Impact of the ASEAN Economic Community

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Transport and Logistics in Lao PDR: Impact of the ASEAN Economic Community On behalf of GIZ Transport and Logistics in Lao PDR: Impact of the ASEAN Economic Community Final Report Published by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH Registered offices Bonn and Eschborn, Germany Regional Economic Integration of Laos into ASEAN, Trade and Entrepreneurship Development (RELATED) 5th floor, Premier Building, opposite Simeuang Temple, Setthathirath Road, Unit 10, Piawat Village, Sisattanak District; Vientiane Capital, Lao PDR T +856 21 226 000 – 3 Ext: 124 F +856 21 226 004 [email protected] www.giz.de/laos As at December 2014 Printed by Kaoyord Image 014 Ban Phiavat, Vientiane Lao PDR Tel/Fax +856 21 216655, 218949 P.O. Box 8147 E-mail: [email protected] www.kaoyordimage.com Design and layout Cover page: PR unit of GIZ Office Vientiane Pankham Jampa Co.,Ltd Photo credits Paul Apthorp photo a. page 10 photo b. page 11 photo c. page 12 photo d. page 61 Christian Ksoll photo cover page Text Paul Apthorp Christian Ksoll John Quarmby Contributions of the contractor, Greater Mekong Transportation, do not necessarily represent the position of GIZ. On behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ) 1 Transport and Logistics in Lao PDR: Impact of the ASEAN Economic Community Greater Mekong Transportation Table of Contents Abbreviations......................................................................................................................................4 Exchange Rates ..................................................................................................................................5 Executive Summary.............................................................................................................................6 Introduction and Background...............................................................................................................9 Background of the Study .....................................................................................................................9 Objectives of the Study .......................................................................................................................9 Definitions ........................................................................................................................................10 Cargo Operations ..............................................................................................................................10 Vehicle Weights ................................................................................................................................11 Truck sizes and wheeling configuration ..............................................................................................11 Value Chain vs. Supply Chain.............................................................................................................13 Stakeholders.....................................................................................................................................13 The Lao Transport and Logistics Sector ..............................................................................................15 Transport of Goods ...........................................................................................................................15 Contribution of transport and logistics to the economy ........................................................................15 Functions of the Lao Transport and Logistics Sector ............................................................................16 Main Routes & Gateways...................................................................................................................22 Transport of People...........................................................................................................................23 Contribution of transport and logistics to the economy ........................................................................23 Functions of the Lao Passenger Transport ..........................................................................................23 Stakeholder Overview .......................................................................................................................26 Transport operators ..........................................................................................................................26 Freight Forwarders............................................................................................................................29 Customer Brokers .............................................................................................................................29 Lao PDR' dependence on neighboring countries for trade ....................................................................30 Analysis of the Transport and Logistics Value Chain in Lao PDR ...........................................................32 Economic Analysis.............................................................................................................................33 Raw Materials and Minerals ...............................................................................................................33 Domestic Distribution ........................................................................................................................33 Import / Export of General cargo .......................................................................................................34 Transit Cargo....................................................................................................................................34 2 Transport and Logistics in Lao PDR: Impact of the ASEAN Economic Community Greater Mekong Transportation Transport and Logistics in Lao PDR: Impact of the ASEAN Economic Community Greater Mekong Transportation Perishables .......................................................................................................................................34 Myanmar ..........................................................................................................................................73 Organic Vegetable Exports.................................................................................................................35 China ...............................................................................................................................................75 Market Opportunities for the Lao Transport Sector ..............................................................................36 Annex VII: ASEAN Framework Agreement on the Facilitation of Goods in Transit ..................................79 Political Analysis................................................................................................................................39 Annex VIII: Professional Standards in Transport .................................................................................81 Challenges and Obstacles for Value Chain Development ......................................................................41 Bibliography .....................................................................................................................................84 Lao PDR’ Transport and Logistics Sector and ASEAN ...........................................................................43 Transport and Logistics in ASEAN.......................................................................................................43 Indirect impact of AEC on the Lao transportation and logistics industry ................................................45 Direct impact of AEC on the Lao transportation and logistics industry...................................................46 The ASEAN Customs Transit System ..................................................................................................46 Market liberalization for international trucking operations ....................................................................47 Trans-loading and related logistics services ........................................................................................48 Ownership liberalization for foreign investors......................................................................................49 Liberalization of skilled labor movement .............................................................................................50 Conclusions and Recommendations....................................................................................................50 Further Research ..............................................................................................................................54 Appendices.......................................................................................................................................55 Appendix I: Methodology...................................................................................................................55 Survey Design...................................................................................................................................55 Sample Selection...............................................................................................................................55 Limitations........................................................................................................................................56 Appendix II: Lao's Connectivity: Land Locked to Land Linked Strategy .................................................57
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