Logistics Performance and trade facilitation?

Transcription

1 WORLD BANK GROUP Logistics Performance and trade facilitation? Jean-François ARVIS, The World Bank ISEL Douane française Le Havre Novembre 2012

2 FROM BUSINESS TO MACRO LOGISTICS

3 Semantic Logistics = art of organizing physical movement of goods or supply chains Logistics performance = national level concept Trade (and Transport) Facilitation = set of measures and investment to improve logistics performance

4 What is not new: Global SC 1 st century AD

5 What is new: perspective 1826 Military logistics (Jomini) = government as SC operator Post WWII Business Logistics (USA) = Private sector as operator 21 st century Macro-logistics= Logistics as a policy area = government as regulator

6 Macro Logistics Freight transport and the accompanying logistics industry represent one of the most dynamic and important sectors of the European economy, accounting for at least 10 percent of GDP. Mr. Siim Kallas Vice-President of the European Commission and Commissioner responsible for Mobility and Transport J-F Arvis, WB, ITF Summit, May 2,

7 Macro logistics issues Aggregating individual supply chain logistics at the national level. (8 to 30% of GDP Competitiveness, sustainable growth. An array of policy interventions: Infrastructure and planning Customs Trade facilitation Regulation of services

8 What is new: motivation Global Value Chains: increased production sharing and continued growth in world trade investment by the private sector in advanced logistics based on just in time manufacturing, emergence of new services. Awareness of the high impact on trade and growth of high trade transaction costs (> tariffs).

9 Pilars of Logistics performance 1. Infrastructure: ports, road/rail corridors, airports 2. Procedures (customs, payments ): Simplification, Automation Harmonization, Standardization Modernization and governance of border agencies 3. Services: forwarders, truckers, brokers Regulation of entry Market structure and competition. Competence and quality of service + new concerns like Supply chain security

10 Trade costs Smaller or larger trade flows are explained by not only by the economic size of the trade partners (e.g. GDP) but also the impact of bilateral trade costs, which are not just transportation costs but captures the impact of separation (e.g. distance) or border barriers (e.g. tariffs) The recent World Bank UNESCAP database measures trade costs as the ad valorem equivalent xplaining the reduction of bilateral flows as compare to domestic consumption.

11 explain thickness of borders Bilateral Costs Geographical Distance Transportation costs or delays Common features such as language, common history, contiguity, or participation in the same economic community Domestic costs Logistics and its performance (cost, delay, reliability) Connectivity (hub and spoke structure) Facilitation at the border (customs and other procedures) Tariffs (no more with Free Trade agreements) Non Tariff Barriers and restrictions to trade (quotas, standards ) = Border Thickness

12 Thickness of border is particularly related with facilitation and logistics Exchange Rate Cost of Starting Business Logistics Performance Air Connectivity Shipping Connectivity Tariffs Same RTA Common Language Common Border Distance Border Bilateral Costs 0 0,1 0,2 0,3 0,4 0,5 0,6 standardized regression coefficients (betas) of trade costs

13 LOGISTICS PERFORMANCE

14 J-F Arvis, WB, ITF Summit, May 2, Trade Facilitation & Logistics Goals: Competitiveness and sustainable growth. An array of policy interventions: Infrastructure and planning Customs Trade facilitation Regulation

15 Supply Chain & Competitiveness: Service Delivery Performance depends on a combination of infrastructure, procedural arrangements and services. Cost of Being Landlocked Oct.10 15

16 J-F Arvis, WB, ITF Summit, May 2, The Complex Supply Chain Port of Entry Rail Transit Multimodal Transfer Road Transit Border Crossin g National Transit Clearance Destinati on Many agents in the SC and Public sector concerns!

17 No single definition? Which sources of trade costs/ friction should be considered?

18 Trade and Transport Facilitation Supply chain focus: Is consistent, including from a policy perspective Include transportation and logistics not just procedures Logistics (Supply Chain) Performance => Trade Facilitation and Logistics => Trade and Transport Facilitation (TTF)

19 Reliability, cost, time J-F Arvis, WB, ITF Summit, May 2,

20 Looking beyond averages 7000 Distribution Port Dwell time in days (Casablanca 2009)

21 What you produce matters most export elasticity to lpi Logistics Performance insensitive products elasticity Sugar,sugar preparations and honey -1.7 Coffee,tea,cocoa,spices, -1.1 Coal,coke and briquettes -1.5 Petroleum, petroleum products -3.8 Logistics Performance sensitive products General industrial machinery & equip. 1.3 Office machines & automatic data 2.9 Telecommunications & sound recording 0.9 Electrical machinery, apparatus 1.2 Road vehicles 0.5 Other transport equipment 1.4 Travel goods, handbags 3.7

22 IMPORT Air, Sea, Land International Transport Ship s Documents Manifest Bills of Lading Sea/AW Bill Container Plans Pay Taxes Clear Customs Release Goods Customs Port Invoice Packing List Declaration Delivery Note Storage IMPORTER Procedures DOMESTIC SUPPLY CHAIN Quotations P.O.s Delivery Notes Con. Notes Invoices Statements Raw Materials Packaging Transport Storage Payments Remittance Advice Port Processes Internal Transport Storage Container Handling Loading Book/Confirm Transport Pay Taxes Clear Customs Release to Port EXPORT Shipping Documents Foreign Chambers Commerce Overseas Embassies Post/ Courier Certificates Of Origin Legal Invoices Licenses Certificates Government Approvals P.O. Contract Terms Delivery Instructions L.O.C. Bank L.O.C. Packing List Invoice Finance Ministry MANUFACTURER EXPORTER Chamber of Commerce Pay Government Departments & PIAs Customs LOC Approval LOC Courier Invoice Packing List Declaration Delivery Note Certificates Of Origin Form A EUR.1 Licenses Certificates Government Approvals Port Port Receive Goods Customs FOREIGN BUYER Bank

23 LOGISTICS PERFORMANCE METRIC(S)

24 Logistics Performance Metrics How do you connect to international logistics networks? How easy it is for your traders to use international networks? Logistics Performance is very much Endogenous: = procedures, services, business practices, to clear goods and move them inland.

25 The Logistics Performance Index Measures the overall trade logistics efficiency of 150+ countries >> J-F Arvis, WB, ITF Summit, May 2,

26 J-F Arvis, WB, ITF Summit, May 2, The Logistics Performance Index Source of data is suppliers of logistics services (freight forwarders, express carriers) Rates logistics performance on a scale of 1 to 5 6 components One overall LPI

27 Time, Cost & Reliability measured in the LPI Customs & Border procedures Transport &Telecom Infrastructure Services Quality Areas for policy regulations (inputs) Timeliness Supply Chain Service Delivery Availability of International Shipments Tracking and Tracing Service Delivery performance outcomes Time, cost, reliability J-F Arvis, WB, ITF Summit, May 2,

28 Data & Fact based policy making Supply Chain (SC) performance (aggregated) metrics essential to policy making: Cross country benchmarking Or country, SC specific details (ports corridors ) Performance outcome (e.g. time) vs. impact in % or in monetary terms Operational Data more available than 10 years ago: customs, facilities, GPS

29 J-F Arvis, WB, ITF Summit, May 2, Heisenberg Principle Breadth vs. Depth General indicators (e.g. LPI) are popular BUT typically policy implementation also needs operational and Supply Chain specific data Over time relevance vs. geographical comparisons

30 What to measure? Connectivity Dwell time Corridor perf indicators micro-logistics indicators macrologistics International freight GATE WAY PORT Corridor Supply of logistics =>Performance metrics FIRM, Shipper Demand of logistics =>impact on activity at firm and industry levels T R A D E Trade growth and compet

31 No simple way to assess the impact Concept of total logistics costs at micro level = freight + overhead + cost or unreliability (e.g. inventories) BUT no easy way to Aggregate or measure at macro level Grasp Significance of logistics costs as %GDP?? Model impact on competitiveness and capacity to diversify in VA production. => CGE or gravity. J-F Arvis, WB, ITF Summit, May 2,

32 LOGISTICS PERFORMANCE POLICIES

33 The LP National Business Model Integrate different set of LP policies and regulation: Transportation, Customs, Trade Industry Virtuous triangle: Public, Private, Academia Observatories Local knowledge and data Global knowledge and partnerships

34 National Strategy National logistics or connectivity strategies Netherlands, Canada, Baltics, Finland Morocco, Tunisia Colombia, Brazil Thailand, Indonesia, Malaysia France???

35 Many areas of reforms in developing payments countries! BORDER MANAGEMENT LOGISTICS SERVICES International freight GATEWAY PORT TRANSIT CORRIDORS Trade related infrastructrue

36 Logistics observatory Supply of logistics Performance metric Port customs Corridors Demand of logistics Firm data from survey Macro logistics

37 Towards a global knowledge network Emergent body of experience OECD (most EU EFTA countries, Australia, Canada, USA, Japan, Korea, Israel & Turkey) LAC (Brazil + projects Argentina, Colombia & Chile), South Africa MENA projects in Tunisia & Morroco EAP (China, Thailand, Singapore, Malaysia, Indonesia) Refine business models for observatories Common toolbox and definition of indicators Joint activities or formal exchanges (knowledge, capacity building)

38 New concerns sustainability Shippers that have often or almost always asked for environmentally friendly options when shipping to Low Income Middle Income High Income Non OECD High Income OECD 0% 10% 20% 30% 40%

39 MERCI