Market Analysis and Transportation Procurement for Food Aid in Ethiopia
________________________________ Market Analysis and Transportation Procurement for Food Aid in Ethiopia Marie-Ève Rancourt François Bellavance Jarrod Goentzel May 2013 CIRRELT-2013-30 Bureaux de Montréal : Bureaux de Québec : Université de Montréal Université Laval C.P. 6128, succ. Centre-ville 2325, de la Terrasse, bureau 2642 Montréal (Québec) Québec (Québec) Canada H3C 3J7 Canada G1VG1V 0A6 0A6 Téléphone : 514 343-7575 Téléphone : 418 656-2073 Télécopie : 514 343-7121 Télécopie : 418 656-2624 www.cirrelt.ca Market Analysis and Transportation Procurement for Food Aid in Ethiopia Marie-Ève Rancourt1,2,*, François Bellavance1,3, Jarrod Goentzel4 1 Interuniversity Research Centre on Enterprise Networks, Logistics and Transportation (CIRRELT) 2 Department of Management and Technology, Université du Québec à Montréal, P.O. Box 8888, Succursale Centre-ville, Montréal, Canada H3C 3P8 3 Department of Management Sciences, HEC Montréal, 3000 Côte-Sainte-Catherine, Montréal, Canada H3T 2A7 4 Massachusetts Institute of Technology (MIT), Center for Transportation & Logistics, 77 Massachusetts Avenue, Cambridge, United-States 02139 Abstract. To transport food aid, the World Food Programme (WFP) primarily contracts with third-party transport carriers in markets that are not well understood. We analyze historical contracts between the WFP in Ethiopia and private carriers using multiple linear regression to gain insights in these markets. Analyses of bids and contracts in Ethiopia show that distance alone explains less than 20% of the variability in effective transportation tariffs. By incorporating additional variables for linehaul costs, market structure measures and socio- economics factors, we obtain a model that explains more than 84% of the variability for the international corridors and 78% for the domestic lanes.
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