Logistics Cost Study of Transport Corridors in Central and West Africa Final Report SUBMITTED TO Anca Dumitrescu Senior Transport Specialist Africa Transport Unit World Bank SUBMITTED BY Nathan Associates Inc. 2101 Wilson Boulevard Suite 1200 Arlington, Virginia, USA September, 2013 Contract No. 7161353 Contents Executive Summary 1 Total Logistics Costs 2 Significant Inefficiencies 6 Recommended Policy Measures 7 1. Introduction 1 Objectives and Scope 2 Geographic Scope of the Study 3 Data Collection 5 Organization of the Report 6 2. Study Methodology 8 1.1. Conceptual Background 9 Financial Cost of the Logistics Service 10 Gateway Costs 10 Inland Transport Costs 11 Final Processing Costs 13 Hidden Costs 13 Case Study Selection Methodology 16 3. Trade Flows and Logistics Systems 18 West African Transit Traffic 18 Mali Traffic Flows 20 Burkina Faso Traffic Flows 22 Abidjan Port Transit Traffic 24 Cotonou Port Transit Traffic 27 Central African Transit Traffic 29 Douala Port 29 LOGISTIC COST STUDY OF TRANSPORT CORRIDORS IN CENTRAL AND WEST AFRICA Corridor Trade Flows 30 Coastal (Abidjan-Lagos) Corridor 33 Regional (Intraregional) Trade 33 Overview of Logistics Systems 38 Components 38 In Transit Corridors to Landlocked Countries 38 In the ALC 38 Functional Characteristics of the Logistics System 40 4. Abidjan Corridors 41 Financial Costs of Logistics Services 44 Gateway Costs 44 Inland Transport Costs 46 Inland Processing Costs 53 Summary of Financial Cost of Logistics Services to the Shipper 54 Hidden Costs 57 Hidden Costs by Case Study 59 Total Logistics Costs 62 5. Cotonou-Niamey Corridor 67 Financial Costs of Logistics Services 69 Gateway Costs 69 Inland Transport Costs 71 Inland Processing Costs 75 Summary of Financial Cost of Logistics Services to the Shipper 76 Hidden Costs 77 Total Logistics Costs 80 Summary of Findings 81 Gateway Inefficiencies 81 Trucking Industry Inefficiencies 81 Transport and Trade Facilitation Inefficiencies 82 6. Douala Corridors 83 Financial Costs of Logistics Services to the Shipper 86 Gateway Costs 86 Inland Transport Costs 87 Inland Processing Costs 94 CONTENTS Summary of Financial Cost of Logistics Services to the Shipper 94 Hidden Costs 97 Port Dwell Time 98 Total Corridor Transit Time 98 Total Logistics Costs 102 Summary of Key Findings 105 Gateway Inefficiencies 105 Trucking Industry Inefficiencies 105 Transport and Trade Facilitation Inefficiencies 105 7. Abidjan–Lagos Corridor 106 Introduction 106 Description of Corridor and Infrastructure 106 Traffic and Vehicle Types 109 Trade and Infrastructure Projects 112 Trade Flows 113 Intraregional Trade 113 Smuggling Flows 116 Containerization Patterns 116 Logistics Patterns 117 Selected Logistics Chains 120 Infrastructure 122 Conclusions 123 Logistics Price and Cost Analysis 124 Introduction 124 Transport Pricing Practices 125 Examples of Costs and Applied Tariffs 125 Logistics Performance and Maturity of the Corridor 127 Monetary Costs to Stakeholders 127 Transit and Border Crossing Times 127 Delays at Borders and Ports 129 Economic Impact of Delays and Uncertainty 133 Corridor Inefficiencies 134 Trade and Logistics System Inefficiencies 134 Trucking and Logistics System Inefficiencies 134 LOGISTIC COST STUDY OF TRANSPORT CORRIDORS IN CENTRAL AND WEST AFRICA 8. Summary of Corridor Performance 135 Corridor Logistics Costs and Delays 135 Transport Prices per ton-km 140 Delays by Corridor 140 Comparable Performance Data from Other Corridors 142 Dakar-Bamako Corridor 142 Conakry-Bamako Corridor 142 Tema-Ouagadougou Corridor 143 Lome-Ouagadougou/Niamey Corridors 143 Comparisons with Benchmarks from East Africa 143 9. Analysis of Corridor Inefficiencies 146 Introduction 146 Organization of the Chapter 146 Types of Inefficiencies 146 Gateway Inefficiencies 146 Port Congestion 147 Inefficient Organization of Port Operations 148 Inefficient Allocation of Cargo for Inland Transport 148 Inefficient Organization of Customs and Cargo Information Systems 149 Container Stripping 149 Inland Transport and Trucking Industry 150 Inefficient Trucking Industry Organization and Practices 150 Transport Pricing and Inefficient Market Structure 152 Checkpoints and Bribery 153 Border Post Operations 154 Inefficient Organization of Border Post Operations 154 Customs connectivity and Cargo tracking Systems 156 Inland Terminals and Customs Clearance 156 The business environment in West and Central Africa 157 10. Policy Issues and Possible Solutions 159 Introduction 159 Types of Policy Issues 159 Framework for Identifying Improvement Opportunities 160 Potential Priority Improvements for West and Central African Corridors 161 CONTENTS Regional Logistics Strategy 162 Transport and Logistics Services 163 Border Management 164 Enforcement and Integrity 164 Commitment and Implementation Capacity 164 Monitoring and Performance Indicators 165 Matrix of Recommended Corridor Actions 166 References 170 Appendix A. Information on Transport Corridors Appendix B. Calculation of Export Volumes Appendix C. Trade and Infrastructure Projects ILLUSTRATIONS Figures Figure ES-1 Improvement Opportunities Framework 7 Figure 1-1 Map of West African and Central African Corridors 4 Figure 1-2 Report Flow Chart 7 Figure 2-1 Typical Logistics Chain 9 Figure 2-2 Distribution of Transit-Time: Mombasa-Kampala 15 Figure 3-1 Mali Maritime Transit Import Trends by Corridor 21 Figure 3-2 Burkina Faso Maritime Transit Import Trends by Corridor 22 Figure 3-3 Nigerien Maritime Transit Import Trends by Corridor 24 Figure 3-4 Transit Trade Flows via the Port of Abidjan 25 Figure 3-5 Transit Trade Flows via the Port of Cotonou 28 Figure 3-6 Chad Regional Trade (2011) 32 Figure 3-7 Components of the Logistics System in the ALC 39 Figure 3-8 Logistics Flows in ALC and the Influence Area 40 Figure 4-1 Map of Abidjan-Ouagadougou and Abidjan-Bamako Corridors 41 Figure 4-2 Dwell Time Distribution at Abidjan Port (2012) 58 Figure 4-3 Total Logistics Costs Structure in the Abidjan-Ouagadougou Corridor by Road 63 Figure 4-4 Total Logistics Costs Structure in the Abidjan-Ouagadougou and Abidjan-Bamako Corridors 64 Figure 4-5 Total Logistics Costs Structure in the Abidjan-Ouagadougou and Abidjan-Bamako Corridors 64 Figure 5-1 Map of Cotonou-Niamey Corridor 67 Figure 5-2 Total Logistics Costs Structure in the Cotonou-Niamey Corridor 81 Figure 6-1 Map of Douala-Ndjamena and Douala-Bangui Corridors 83 Figure 6-2 Total Logistics Costs Structure in the Douala-Ndjamena and Douala-Bangui Corridors 104 LOGISTIC COST STUDY OF TRANSPORT CORRIDORS IN CENTRAL AND WEST AFRICA Figure 7-1 Influence Areas of the Abidjan-Lagos Corridor (ALC) 106 Figure 7-2 Abidjan-Lagos Corridor Road Infrastructure 107 Figure 7-3 Transshipment Procedure at Semé-Kraké Border Parking Lots after Goods Are Cleared 111 Figure 7-4 Freight Tonnage per Month Along the ALC Originating in Côte d’Ivoire in 2012 116 Figure 7-5 Functional Patterns of the Logistics System in ALC 119 Figure 7-6 Cement Logistics Chain 121 Figure 7-7 Cosmetics Logistics Chain 122 Figure 10-1 Improvement Opportunities Framework 160 Tables Table ES-1 Comparison of Total Logistics Costs in West Africa Corridors for Selected Case Studies (US$/ton) 3 Table ES-2 Comparison of Total Logistics Costs in Central Africa Corridors for Selected Case Studies (US$/ton) 4 Table ES-3 Cost-raising Factors and Recommended Actions and Policy Measures for West and Central African Corridors 8 Table 1-1 Length of Primary West African Transit Corridors 4 Table 2-1 Truck Operating Expenses Structure 13 Table 3-1 Relative Importance of Transit Traffic by Port (000 tons) 19 Table 3-2 Transit Traffic for Mali by Corridor Port (000 tons) 20 Table 3-3 Total Regional and Transit Trade Flows to Mali 2006-2010 (000 tons) 21 Table 3-4 Transit Traffic for Burkina Faso by Corridor Port (000 tons) 22 Table 3-5 Total Regional and Transit Trade Flows to Burkina Faso 2006-2011 (000 tons) 23 Table 3-6 Transit Traffic for Niger by Corridor Port (000 tons) 23 Table 3-7 Port of Abidjan, Total Traffic and Transit Traffic by Trade Direction, 2005–2011 (000 tons)25 Table 3-8 Total Container Traffic in the Port of Abidjan, 2009–2011 26 Table 3-9 Estimated Corridor Trade Flows in 2010 and 2011 (000 tons) 26 Table 3-10 Port of Cotonou, Total Traffic by Trade Direction, 2005–2011 (mil. tons) 27 Table 3-11 Total Container Traffic in the Port of Cotonou, 2005–2011 28 Table 3-12 Estimated Corridor Trade Flows in 2010 and 2011 (000 tons) 29 Table 3-13 Port of Douala, Total Traffic by Trade Direction, 2005–2011 (mil. tons) 29 Table 3-14 Total Container Traffic in the Port of Douala, 2007–2010 30 Table 3-15 Estimated Corridor Trade Flows in 2009 and 2010 (000 tons) 31 Table 3-16 Transit Traffic to and from Chad by Product Category, 2005-2010 (000 tons) 31 Table 3-17 CAR Regional Imports (000 tons) 33 Table 3-18 CAR Regional Exports (000 tons) 33 Table 3-19 Main Products Traded Between Trading Partners in the ALC, by Volume (2010) 34 Table 3-20 Reported Transit Flows via Cotonou Port, 2005–2010 (000 tons) 36 Table 3-21 Transit Traffic of Used Vehicles at Port of Cotonou, 2005–2010 (units) 37 Table 4-1 Abidjan Corridors Case Studies by Road and by Rail 43 CONTENTS Table 4-2 Port of Abidjan Container and Bulk Transit Fees by Shipper – Port and Shipping Line (FCFA) 45 Table 4-3 Port of Abidjan Container and Bulk Transit Fees by Shipper – Customs and Clearing Agent (FCFA) 45 Table 4-4 Port of Abidjan - Other Charges Paid by Shipper (FCFA) 46 Table 4-5 Road Transport Tariffs for Abidjan-Ouagadougou and Abidjan-Bamako Corridors in 2012 (FCFA)