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1、ShrinkingEconomic DistanceUnderstanding How Markets and Places Can Lower Transport Costs in Developing CountriesShrinking Economic DistanceMatas Herrera Dappe,Mathilde Lebrand,and Aiga StokenbergaShrinking Economic DistanceSUSTAINABLE INFRASTRUCTURE SERIESShrinking Economic DistanceUNDERSTANDING HOW

2、 MARKETS AND PLACES CAN LOWER TRANSPORT COSTS INDEVELOPING COUNTRIESMatas Herrera Dappe,Mathilde Lebrand,and Aiga Stokenberga 2024 International Bank for Reconstruction and Development/The World Bank1818 H Street,NW,Washington,DC 20433Telephone:202-473-1000;Internet:www.worldbank.orgSome rights rese

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8、r the following conditions:AttributionPlease cite the work as follows:Herrera Dappe,Matas,Mathilde Lebrand,and Aiga Stokenberga.2024.Shrinking Economic Distance:Understanding How Markets and Places Can Lower Transport Costs in Developing Countries.Sustainable Infrastructure Series.Washington,DC:Worl

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14、3,USA;e-mail:pubrightsworldbank.org.ISBN(paper):978-1-4648-2124-0ISBN(electronic):978-1-4648-2125-7DOI:10.1596/978-1-4648-2124-0Cover image:Colorful City Transport Template,truck,broken road,black isolated silhouette,street of poor neighborhood in the city,and slum.Adobe Stock.All modified by Veroni

15、ca Elena Gadea.Further permission required for reuse.Cover design:Veronica Elena Gadea/World Bank Global Corporate Solutions.Library of Congress Control Number:2024910802ABOUT THE SERIESSustainable infrastructure is a key enabler of economic and social development,as well as environmental sustainabi

16、lity.Quality infrastructure enhances productivity and competitiveness,contributing to economic growth and employment,as well as to facilitating international trade.Broad coverage of infrastructure services promotes social inclusion and equity and supports the formation of human capital.Green infrast

17、ructure safeguards local environmental quality while contributing to the global decarbonization process.The challenge of delivering sustainable infrastructure services is a complex one that goes far beyond“bricks and mortar”to encompass good policy,sound planning,efficient procurement,smart regulati

18、on,transparent governance,affordable finance,and functional markets.The Sustainable Infrastructure Series covers a wide range of policy topics relating to network infrastructure services,including energy,multimodal transportation,information and communication technology and digital development,water

19、 and sanitation,and urban and rural infrastructure,as well as irrigation and flood management.PREVIOUS TITLES IN THIS SERIESShrinking Economic Distance:Understanding How Markets and Places Can Lower Transport Costs in Developing Countries(2024)by Matas Herrera Dappe,Mathilde Lebrand,and Aiga Stokenb

20、ergaAdvancing Cloud and Infrastructure Markets:Strategic Directions for Low-and Middle-Income Countries(2024)by Natalija Gelvanovska-Garcia,Vaiva Maiul,and Carlo Maria RossottoThe Path to 5G in the Developing World:Planning Ahead for a Smooth Transition(2024)by WorldBankThe Economics of Electric Veh

21、icles for Passenger Transportation(2023)by Cecilia Briceno-Garmendia,Wenxin Qiao,and Vivien FosterOff the Books:Understanding and Mitigating the Fiscal Risks of Infrastructure(2023)by Matas Herrera Dappe,Vivien Foster,Aldo Musacchio,Teresa Ter-Minassian,and Burak TurkguluLaying the Foundations:A Glo

22、bal Analysis of Regulatory Frameworks for the Safety of Dams and Downstream Communities(2020)by Marcus J.Wishart,Satoru Ueda,John D.Pisaniello,Joanne L.Tingey-Holyoak,Kimberly N.Lyon,and Esteban Boj GarcaRethinking Power Sector Reform in the Developing World(2020)by Vivien Foster and Anshul RanaLife

23、lines:The Resilient Infrastructure Opportunity(2019)by Stephane Hallegatte,Jun Rentschler,and Julie RozenbergBeyond the Gap:How Countries Can Afford the Infrastructure They Need while Protecting the Planet(2019)by Julie Rozenberg and Marianne FayAll books in the Sustainable Infrastructure Series are

24、 available for free athttp:/ viiContentsForeword .xiiiAcknowledgments .xvAbout the Authors .xviiMain Messages .xixAbbreviations .xxiiiOverview .1The World Is Far from Being an Integrated Economy .1Why Should Policy Makers Care about the Cost of Moving Goods?.3What Does This Report Bring?.4What Matte

25、rs Is Economic Distance .7Efficient,High-Quality Infrastructure Can Reduce the Friction of Distance .8There Is a Limit on How Much Infrastructure Can Reduce Economic Distance .10Shrinking Economic Distance Requires Efficient Markets Followed by Efficient Places .12Note .16References .16Chapter 1The

26、Cost of Moving Goods across the World .21Main Messages .21Introduction .22High and Volatile International Transport Costs in DevelopingCountries.22High Domestic Transport Costs in Developing Countries .25High Time Costs in Developing Countries .31Notes .39References .39Chapter 2Drivers of the Econom

27、ic Costs of Transport .43Main Messages .43Introduction .44viii SHRINkING ECoNoMIC DISTANCEConceptual Framework .44Carrier Costs .46Notes .50References .50Chapter 3Physical Geography and Infrastructure .51Main Messages .51Introduction .52Travel Time,Reliability,and Costs .52Effect of Distance and Top

28、ography on Transport Prices .54Effect of Road Infrastructure on Transport Prices .60Effect of Port Infrastructure and operation on Transport Prices .66Notes .68References .68Chapter 4Market Failures and Frictions .71Main Messages .71Introduction .72Effect of Regulation and Market Structure on Trucki

29、ng Prices .72Effect of Market Structure in Container Ports on Maritime Transport Costs .83Effect of Regulation and Market Structure on Maritime TransportPrices .89Effect of Economic Geography,Search Frictions,and Regulationson Transport Prices .92Notes .99References .99Chapter 5Policies to Reduce Ec

30、onomic Distance .103Main Messages .103Introduction .104Making Markets Efficient .105Making Places Efficient .116Note .128References .129Chapter 6Economic Implications of Policies to Reduce EconomicDistance.133Main Messages .133Introduction .133Intermediate outcomes .135Wider Economic outcomes.139Het

31、erogeneous Effects,Tradeoffs,and Synergies ofPolicies .142Guidelines for Appraising Policies .146References .147Appendix A:Datasets .153Appendix B:Methods for Measuring Overland Transport Costs .161 CoNTENTS ixBoxeso.1 Background papers prepared for this report .54.1 Price and entry regulation in th

32、e trucking sector:Theexperiences of France and the United States .744.2 Freight-sharing rules in theEconomic Community of WestAfrican States(ECoWAS).775.1 Deregulating the domestic trucking sector:Lessons from international experience .1085.2 Deregulating the international trucking sector:Lessons fr

33、om the European Union and Rwanda .1105.3 Lessons from fleet renewal schemes .1145.4 Lessons from international experience developing logisticsclusters .1155.5 Travel time and cost reductions associated with road projects financed by multilateral development banks .1185.6 Improving multimodal transpo

34、rt infrastructure to reduce travel times and costs:Lessons from international experience .1205.7 Reducing transport costs through port improvements:Lessons from Croatia and Viet Nam .1235.8 Reducing border-crossing times:Lessons from Africa,NorthAmerica,and Viet Nam .1245.9 Port digitalization in Af

35、rica .1255.10 Improving port operations in East Asia and Sub-Saharan Africa .1265.11 Reducing urban transport times and costs:Lessons from Croatia,the Netherlands,and the United States .127Figureso.1 Domestic transport costs to import and export,by country income group .2o.2 Correlation between trav

36、el speed and per capita income .3o.3 Economic costs of freight transport and its determinants .7o.4 Median transport price premium in the rainy season for median shipment,byquality of a countrys road infrastructure .9o.5 Building blocks for shrinking economic distance .13o.6 Theory of change of tran

37、sport interventions to reduce economic distance .151.1 International transport costs,by weight and value,19652013 .231.2 Average transport price per dollar of goods exported to the United States and Australia,bycountry income group .241.3 Dry bulk shipping costs,18502020 .251.4 Estimates of transpor

38、t costs as a percentage of the mean destination price for locally produced goods in selected countries .261.5 Domestic transport costs to import and export,by country income group .271.6 Trucking prices in selected countries .281.7 Contract trucking prices to ship food in selected countries .281.8 V

39、ariation in trucking prices per ton-kilometer to Bogot andCartagena,byorigin,2021 .311.9 Decomposition of average shipment distance of exports by sea to Canada and the United States and to the European Union .32x SHRINkING ECoNoMIC DISTANCE1.10 Decomposition of average shipment time of exports by se

40、a to Canada and the United States and to the European Union .331.11 Distribution of wait times within and between exporting countries of exports to Canada and the United States and to the European Union .331.12 Distribution of wait times at international transshipment hubs for exports to Canada and

41、the United States .341.13 Domestic transport time to import and export,by countryincome group .341.14 Correlation between speed of traffic and per capita income .351.15 World Banks Container Port Performance Index,bycountryincome group,2022 .361.16 Average median port time,by country income group,20

42、19 .361.17 Average time to comply with border requirements for imports and exports,bycountry income group.371.18 Border-crossing time for imports in selected African countries of destination,2023 .381.19 Border delays across firms within countries in Africa .392.1 Economic costs of freight transport

43、 and its determinants .452.2 Composition of trucking costs in selected countries .472.3 Composition of trucking costs in Somalia,by corridor .482.4 Components of operating costs of container and dry bulkvessels .493.1 Intercity speed differences with respect to the slowest country(Nepal)with and wit

44、hout controlling for some factors,by world region .533.2 Reduction in total transport price associated with reductionin trip distance of 100 kilometers in selected countries,by percentile of initial trip distance .553.3 Decline in total transport price of a shipment from reducingthe length of the tr

45、ip by 10 and 100kilometers,byoriginal distance .563.4 Correlation between distance and transport price pertoninIndia,by vehicle type and tonnage .563.5 Discount in transport price per ton-km for longest trip compared with shortest trip from main origin city,by difference in distance .583.6 Total ver

46、sus routing-related transport costs in India,bystateand union territory .593.7 Distribution of trip distance,by fraction of shipment route on highways .613.8 Median transport price based on fraction of route distancetraveled on highways .623.9 Predicted reduction in transport unit price from increas

47、ing share of trip on a highway,by percentile of aggregate distance distribution.623.10 Median increase in transport price during the rainy seasonfor median shipment,by quality of a countrys roadinfrastructure .654.1 Restrictions on foreign entry in trucking markets in emergingmarkets and developing

48、economies .764.2 Number of intermediaries in Colombia,2021 .794.3 Correlation between number of trucking intermediaries andremoteness in Colombia,2021 .80 CoNTENTS xi4.4 Changes in freight rates by number of Indian Bank Associationqualified transport operators on a route relativeto the case of no In

49、dian Bank Associationqualified transport operator .824.5 Trucking prices,by length of rail option and road distance .834.6 Global share of berths that handle containers,2021 .854.7 Transshipment incidence .864.8 Number of operators at ports,by region .874.9 Correlations between competition environme

50、nt and port performance .884.10 Concentration in the container shipping industry,May 2023 .904.11 Share of trucks that run empty,by country income level .934.12 Ratio of outgoing to incoming empty trucks per day in net exporting districts in Bangladesh .965.1 Building blocks for shrinking economic d

51、istance .1045.2 Regulations that restrict competition in road transport in Peru,the Philippines,and Viet Nam .107B5.5.1 Median reduction in travel times on roads improved as part of projects financed by multilateral development banks .1196.1 Theory of change of transport interventions to reduce econ

52、omic distance .1346.2 key steps and considerations in appraising transport interventions.146Maps1.1 Premia and costs of trucking through states in India.291.2 Average trucking prices in Colombia,by destination,2021.303.1 Incremental cost of routing in India,by state and union territory .593.2 Freigh

53、t rate penalty in India associated with speed,by state .633.3 Quintile ranking of cities in India based on speed indices .643.4 Increase in transport price during the rainy season.644.1 Average prices paid to truckers in Colombia,bydestinationprovince .814.2 Interregional traffic imbalance index in

54、Bangladesh and Brazil .95B5.5.1 Median reduction in vehicle operating costs on roads improved as part of projects financed by multilateral development banks .1196.1 Changes in prices paid to truckers in Colombia for nonagricultural shipments as a result of road improvements .1426.2 District-level ch

55、anges in employment and real wages associated with a one-day reduction in dwell times at Chittagong Port and market policies in Bangladesh .145A.1 Countries included in the dataset on contracts for shipping food and number of routes connecting origins anddestinations in each country .154A.2 Number o

56、f trips by trucks in Colombia,by destination municipality,2021 .156A.3 Countries included in the global dataset on travel speed and time .158A.4 Countries included in the dataset on port performance.159xii SHRINkING ECoNoMIC DISTANCETables4.1 Criteria for assessing level of competition at ports .885

57、.1 Recommendations for making markets efficient .1175.2 Recommendations for making places efficient .128 xiiiThe worlds first container ship,a converted World War II oil tanker called the Ideal X,departed the port of Newark,New Jersey,on April 26,1956.On board were 58 truck-trailers bound for Housto

58、n,Texas.Carrying mass amounts of cargo by maritime transport transformed global trade,and as a result,the global economy.Containerization enabled global-ization,the dispersion of value chains between countries,and unprecedented economic growth.Transport infrastructure has come a long way since the I

59、deal Xs maiden voyage in 1956.Today,the worlds largest container ships carry 24,000 containers or more,dwarfing those from half a century ago.As shipping capacity has increased,costs have declined by up to 39 percent by weight and 62 percent by value since the 1960s.Around 90 percent of the worlds g

60、oods are shipped this way.But even as transport costs have decreased and global shipping has become the norm,transport cost reductions have been uneven between countries.It is still 50 percent more expensive to export to the United States from a low-income country than from a high-income one.Interna

61、tional transport prices,such as for dry bulk goods like grains and minerals,also remain highly volatile,mostly due to shipping demand shocks but also due to one-off events like the COVID-19 pandemic and the closure of the Suez Canal.These inequities persist at the domestic level as well.For many dev

62、elop-ing countries,road transportation remains the main mode of shipment.As this report demonstrates,the cost of trading within developing countries is between 3 and 14 times higher than in the United States.What is behind these disparities?Why does it cost so much more to ship goods from and within

63、 developing countries than in high-income countries?Some reasons are intuitive:distance,geography,and the quality of infra-structure all impact the amount of money required to move goods from point A to point B.But this is not the full story.When transport is slow,it costs more.In developing countri

64、es,trade policies and procedures add time and money to routes that can already be Forewordxiv SHRINkING ECoNoMIC DISTANCEonerous due to poor road conditions,treacherous topography,and unpre-dictable weather.Borders are major bottlenecks,with the average time to comply with export regulations often e

65、xceeding 4 days in low-income coun-tries,compared to just 1 day in high-income countries.Sometimes,ship-ments spend 15 percent or more of the total export time simply waiting at ports.Both travel to the main port or border crossing and between cities tend to be slower in poor countries than in rich

66、countries,with the speed on inter-city roads in the latter being twice as high as in the former.Market regulations are another often overlooked contributor to transport costs in developing countries.In some places,markets for trucking services are still not competitive.Price regulation,formal and in

67、formal entry barriers,high market concentration by a few players,and collusion all trigger higher transport costs.A lack of alternative routes,especially in land-locked coun-tries,also plays a role.This report demonstrates how different market frictions impact the cost of transporting goods worldwid

68、e.This is a crucial problem for policy makers to solve for many reasons,but paramount among them is that inefficient transport exacerbates food insecurity and geographic inequalities,as well as threatens climate resilience.In Sub-Saharan Africa,for example,transport costs can represent up to 50 perc

69、ent of food prices,and about 40 percent of food is lost before it ever reaches peoples platesoften due to poor logistics.Maritime transport comprises 3 percent of global emissions;15 percent of this figure is generated by ships stalling at ports.To compete in global markets,developing country govern

70、ments need to keep transport costs down.Creating efficient markets and seamless con-nections between places is essential to addressing this challenge.This report offers a fresh perspective on transport connectivity by drawing on a wealth of new data and original research.In doing so,it provides a po

71、licy framework for the needed reforms that can make markets more efficient and the infra-structure investments that can make places better connected.We hope the reports findings will help guide decision-makers in designing impactful reforms and look forward to working closely with our client coun-tr

72、y governments,development partners,and the private sector to deliver solutions that will help shrink the economic distance between and within countries and thus promote growth and sustainable development.Nicolas Peltier-Thiberge Global Director for Transport Global PracticeWorld BankBinyam RejaPract

73、ice Manager for Transport Global PracticeWorld Bank xvThis report was prepared by a team led by Matas Herrera Dappe,Mathilde Lebrand,and Aiga Stokenberga.Its wide scope meant that a large team of experts,including World Bank and external researchers,undertook the underlying research.The team compris

74、ed Atsushi Iimi,Alejandro Molnar,Nino Pkhikidze,Forhad Shilpi,and Burak Turkgulu(World Bank);Prottoy A.Akbar(Aalto University);Treb Allen(Dartmouth College);Adina Ardelean(Santa Clara University);David Atkin(Massachusetts Institute of Technology);Santiago Cantillo-Cleves(University of California,San

75、 Diego);Kerem Coar(University of Virginia);Victor Couture(University of British Columbia);Bernardo Daz de Astarloa(Universidad de Buenos Aires and Universidad Nacional de La Plata);Gilles Duranton(University of Pennsylvania);Lin Fan(London School of Economics);Carlos Eduardo Hernndez(Universidad de

76、Los Andes);Volodymyr Lugovskyy(Indiana University);Nick Pore(Pore and Associates);Brock Rowberry(University of Michigan,Ann Arbor);Adam Storeygard(Tufts University);David Terner(Indiana University);and Ron Yang(University of British Columbia).Juan Ignacio Fulponi,Eigo Tateishi,and the World Banks ca

77、rtography unit provided support with maps and figures.Azeb Afework provided administrative support.The team is thankful to Crickmay&Associates;Gael Raballand;the national statistics offices of Georgia,Kenya,Madagascar,Nigeria,Rwanda,and Tanzania;SATLOCK;and the World Food Programme for providing acc

78、ess to data for the underlying research.The reports peer reviewers provided valuable guidance.They included Megersa Abate,Luis Blancas,Charles Kunaka,and Roman Zarate Vasquez(World Bank).Tomas Serebrisky(Inter-American Development Bank)and Tony Venables(University of Oxford)provided guidance at the

79、incep-tion stage.The report also benefited from comments from Muneeza Alam,Theophile Bougna,Leonardo Caon,Vivien Foster,Martin Humphreys,Yin Yin Lam,Shomik Mehndiratta,Javier Morales Sarriera,Harris Selod,Stphane Straub,and Felipe Targa(World Bank);Andrs Chaves Pinzn Acknowledgmentsxvi Shrinking Eco

80、nomic DiStancE(2BONEC);Jan Hoffmann(UNCTAD);and David Hummels(Purdue University).Pablo Fajnzylber,Nicolas Peltier,and Binyam Reja provided helpful guidance.This report would not have been possible without generous funding by the Public-Private Infrastructure Advisory Facility(PPIAF).We thank Jewel M

81、cFadden,acquisitions editor;Christina Davis,production editor;and Orlando Teofilo Mota,print coordinator(WorldBank),for their work on this book.Barbara Karni edited the report,and Ann OMalley proof-read it.The cover was designed by Veronica Elena Gadea(World Bank),and the book was typeset by Datapag

82、e International Ltd.xviiAbout the AuthorsMatas Herrera Dappe is a senior economist and the global lead on trans-port economics and policy at the World Bank,where he leads policy research programs on infrastructure with a focus on transport.He has published extensively on a wide range of topics,inclu

83、ding infrastructure economics,economic development,trade and logistics,public-private partnerships,state-owned enterprises,competition,auctions,and fiscal policy.Before join-ing the World Bank,he worked for consulting firms and think tanks,advising governments and companies in Europe,Latin America,a

84、nd North America.He holds a PhD in economics from the University of Maryland,College Park.Mathilde Lebrand is a senior economist in the Prospects Group,a unit of the World Banks Development Economics Vice Presidency.She is also a member of the team producing the 2024 World Development Report on eco-

85、nomic growth in middle-income countries.Previously,she worked in the Infrastructure Chief Economist and the Europe and Central Asia Chief Economist units.Her research focuses on economic geography,transport,and trade.She has taught at the University of Montreal and worked at the World Trade Organiza

86、tion in Geneva.She holds a PhD in economics from the European University Institute.Aiga Stokenberga is a senior transport economist at the World Bank,where she leads analytical work and investment and policy lending operations in urban mobility,regional economic corridors,and transport resilience in

87、 Latin America and the Caribbean and,previously,in Africa.She also co-leads global transport knowledge products and initiatives,including by leveraging Big Dataintensive approaches.Before joining the Transport Global Practice in 2016,she worked on electricity regulation and governance,energy policy,

88、and trade and logistics at the World Bank and at the World Resources Institute Ross Center for Sustainable Cities.She holds a masters degree in interna-tional energy policy and international economics from the Johns Hopkins University School of Advanced International Studies and a PhD in urban econo

89、mics and land use from Stanford University.xixMain Messages Despite the reduction in transport costs over the past decades,the world today is still far from being a single integrated economy.Developing countries face higher transport prices than developed countries,for both international and domesti

90、c shipments,and shipping times are longer and less reliable.Tackling the problems can increase both income and general welfare in these coun-tries,improving the lives of the people who live there.This report assesses the main determinants of the economic costs of freight transport in developing coun

91、tries and identifies the frictions keeping trans-port prices above an efficient level,times high,and reliability low.It focuses on maritime and road transport,particularly road transport,as evidence in this area has been scarcer than it is for maritime transport.By deepen-ing the understanding of th

92、e frictions driving the economic costs of freight transport,the report can help policy makers target reforms in areas in which reforms can be expected to have the greatest impact and avoid unintended consequences.Three main findings stand out from the analysis:Transport infrastructure can reduce the

93、 frictions of physical geography,but its ability to do so depends on the quality,service level,and operation of the infrastructure.The transport price for a shipment increases with distance and topography;more direct routes can therefore reduce the cost of moving goods.Cutting the distance for the m

94、edian shipment delivering food in low-and middle-income countries by 100 kilometers reduces the transport price by about 20 percent on aver-age,for example.For a given distance,highways are associated with aver-age transport prices that are about 20 percent lower than prices on lower categories of r

95、oads.Low-quality road infrastructure can also exacerbate the impact of extreme weather events.Shipments during the rainy season cost about 6 percent more than shipments during the dry season,and the premium is higher in countries in which the quality of the road infrastruc-ture is lower.xx SHRINkING

96、 ECoNoMIC DISTANCE Improving both the technical efficiency and the operational per-formance of container ports can significantly reduce transport costs.Raising performance as measured by the World Banks Container Port Performance Index,which is based on the time vessels spend at portsfrom the bottom

97、 25 percent to the top 25 percent could reduce shipping costs by 37 percent.Increasing competition in the transport sector can increase the quality of service and lower prices.Several countries deregulated their trucking sectors over the past few decades,creating competitive sectors.Elsewhere,howeve

98、r,markets for trucking services are not competitive.Deregulation and strong competition in trucking markets bring significant benefits for shippers and the economy as a whole.In Colombia,for exam-ple,a 10 percent decrease in a truckers market share on a route yields a 0.57 percent decrease in the tr

99、ucking price.Private sector involvement in port operations coupled with competi-tion between and within ports are conducive to better port performance and lower maritime shipping costs.Consolidation and increased coopera-tion in the container shipping industry can reduce maritime shipping costs beca

100、use of economies of scale and scope,but increased market power can lead to higher prices,potentially offsetting the benefits.Market failures,government policies,and the distribution of eco-nomic activity across space can raise transport prices.Empty run-ning trucks and cargo vessels are common acros

101、s the world.Regulations that forbid or limit the ability of trucks and vessels to pick up cargo at the destination and information frictions that limit the ability of shippers and carriers to find each other increase the probability of empty trips.The distribution of economic activity,particularly i

102、ts heterogeneity,is an important determinant of transport demand and the incidence of empty trips.In countries facing food security issues,the trucking price to a des-tination with economic density in the top 25 percent is about 14 percent lower than the price to a destination whose economic density

103、 is in the bottom 25 percent.Efficient,high-quality transport reduces economic distance,bringing peo-ple and firms closer to each other,fostering economic welfare,and reducing emissions.Crafting policies to reduce economic distance is complex,how-ever,because of potential synergies and trade-offs,in

104、cluding heterogenous effects.Policy makers need to begin by understanding the main problem a policy aims to address and identifying the market failures and policy-driven frictions that warrant government intervention.All countries are different,but any reform agenda to develop an efficient,high-qual

105、ity freight transport and reduce economic distance should aim to foster efficient markets and places as follows:Efficient markets are markets in which service providers,workers,and suppliers have the incentive and ability to invest,innovate,increase MAIN MESSAGES xxiproductivity,and supply the best

106、possible goods and services at the low-est possible prices and buyers can find the goods and services they need.Creating such markets requires tackling market failures and market fric-tions,including those caused by governments,along the transport supply chain.Measures include efforts to strengthen

107、competition for and in the market,promote the development of efficient transport service providers,and improve demand aggregation and matching.Efficient places are places in the transport networkfrom the road,rail,and water links to the nodes of the transport network,such as ports and border poststh

108、at are properly planned and function in a way that reduce the frictions associated with distance and topography(which cli-mate change can exacerbate)and the costs of agglomeration.Measures include those aimed at developing adequate transport infrastructure,improving the efficiency of ports and borde

109、r crossings,and managing urban congestion.Without efficient markets,the full benefits of measures to ensure efficient places will not be realized.For this reason,efficient markets should be cre-ated first.xxiiiAbbreviationsCAREC Central Asia Regional Economic Cooperation CPPI Container Port Performa

110、nce IndexEMDEs emerging markets and developing economiesEU European UnionGDP gross domestic productGPS Global Positioning ServiceGIS Geographic Information SystemGVC global value chainHHI Herfindahl-Hirschman Index IBA Indian Bank Association ICC Interstate Commerce Commissionkm kilometerkm/h kilome

111、ter per hourMTEF medium-term expenditure frameworkOECD Organisation for Economic Co-Operation and DevelopmentPPI Private Participation in InfrastructurePPP public-private partnershipPPP purchasing power paritySOE state-owned enterpriseTEU 20-foot equivalent unitUNECE United Nations Economic Commissi

112、on for EuropeVOC vehicle operating costAll dollar amounts are US dollars unless otherwise indicated.1OverviewTHE WORLD IS FAR FROM BEING AN INTEGRATED ECONOMYDeclining freight transport costs over the past several decades have been an important contributor to the rapid growth of trade,a main driver

113、of economic growth and economic convergence between developing and developed economies.Global transport costs declined by 3339 percent by weight and by 4862 percent by value between the mid-1960s and the mid-2010s(Ganapati and Wong 2023).As costs fell,the participation of emerging economies,especial

114、ly China,in global trade increased,and the composition of trade shifted from natural resources toward more manufacturing products and intermediate goods.Manufacturers are no longer located close to their customers;firms have expanded and even frag-mented their production supply chains,altering the g

115、eographic location of economic activity(Antras and Chor 2022;Redding 2022).Despite the increasing globalization of production and trade,the world is still far from being a single integrated economy.Poorer countries face higher freight transport costs than wealthier coun-tries.For example,it is 57 pe

116、rcent more expensive to export to the United States from a low-income country than from a high-income country,con-trolling for the distance,weight,and types of goods transported.Poorer countries face higher costs on both the international and the domestic legs of the journey.On average,within-countr

117、y transport costs to export and import in high-income countries are half those in low-income countries(refer to figure O.1).In some African and Eastern European countries,the costs of trading within the countries are 314 times as large as in the United States(Atkin and Donaldson 2015;Daz de Astarloa

118、 and Pkhikidze 2024).2 SHRINkING ECoNoMIC DISTANCEFIGURE O.1Domestic transport costs to import and export,by country income groupSource:Original figure for this publication using data from the 2020 Doing Business survey.Note:Dots show observations by country.Lines are fitted lines per income group.P

119、PP=purchasing power parity.200400600Distance(km)02,000PPP-adjusted$4,0006,0008001,000a.Cost to import200400600Distance(km)b.Cost to export02,000PPP-adjusted$4,0006,0008001,000High-income countriesUpper-middle-income countriesLower-middle-income countriesLow-income countriesTransport prices have been

120、 volatile and the transport network vulnerable to unforeseen disruptions.In addition to the downward trends over the past decades,there have been abrupt movements of trans-port prices,in some instances nearly tripling on a year-to-year basis.The COVID-19 pandemic,for example,disrupted the transport

121、network and had a much greater effect on transport prices on trade routes to developing regions than to developed regions.It takes significantly longer to move goods within poorer coun-tries,adding to the differences in the economic costs of transport between developing and developed countries.Shipp

122、ers care not only about the transport price but also about the transport time and reliability,which affect inventory and hedging costs.Domestic times to export goods are much higher in developing countries,with a significant share of the time within the exporting country spent at the port.Both trave

123、l to the main port or border crossing and intercity travel tend to be slower in poorer countries(refer to figure O.2).Intercity road speed in a country in the top decile of intercity road speed is about twice as fast as it is in a country in the bottom decile.oVERVIEW 3WHY SHOULD POLICY MAKERS CARE

124、ABOUT THE COST OF MOVING GOODS?Reductions in the cost and time of moving goods in and out of coun-tries can increase trade volumes and influence the patterns of trade;high within-country transport costs and time can hinder the benefits of trade liberalization.Donaldson,Jinhage,and Verhoogen(2017)cla

125、im that the high cost of domestic transport in African countries is one of the main reasons the impact of trade liberalization has been limited and geo-graphically unbalanced on the continent.Reducing domestic transport time and cost can promote international trade.Indeed,one study(Freund and Rocha

126、2011)finds that a one-day decrease in overland travel time is associ-ated with a 7 percent increase in African exports.Reductions in domestic transport costs and time affect not only international trade but also domestic trade,productivity,and invest-ments.In India,for example,a 1 percent reduction

127、in trucking unit costs is associated with a 2.83.9 percent increase in domestic trade flows(Lall,Sinha-Roy,and Shilpi 2022).Expansion of the railways in India increased FIGURE O.2Correlation between travel speed and per capita incomeSource:Akbar and others 2024.Note:Figure reports average speed in a

128、 country above the average speed in the slowest country in the sample (Nepal).The average speed is obtained as the country fixed effect in an ordinary least square regression,including speed measures for more than 36 million road segments covering all countries.AfghanistanAngolaAlbaniaUnited Arab Em

129、iratesArgentinaArmeniaAustraliaAustriaAzerbaijanBurundiBelgiumBeninBurkina FasoBangladeshBulgariaBosnia and HerzegovinaBelarusBoliviaBotswanaCentral African RepublicCanadaSwitzerlandChileCote dIvoireCameroonCongo,Dem.Rep.Congo,Rep.ColombiaCosta RicaCyprusCzechiaGermanyDenmarkDominican RepublicAlgeri

130、aEcuadorEgypt,Arab Rep.SpainEstoniaEthiopiaFinlandFijiFranceGabonUnited KingdomGeorgiaGhanaGuineaGuinea-BissauEquatorial GuineaGreeceGuatemalaHondurasCroatiaHaitiHungaryIrelandIraqIsraelItalyJamaicaJordanKazakhstanKenyaKyrgyz RepublicCambodiaLao PDRLebanonLiberiaLibyaSri LankaLesothoLithuaniaLatviaM

131、oroccoMoldovaMadagascarNorth MacedoniaMaliMyanmarMontenegroMongoliaMozambiqueMauritaniaMalawiMalaysiaNamibiaNigerNigeriaNicaraguaNetherlandsNorwayNepalNew ZealandOmanPanamaPeruPolandPuerto RicoPortugalParaguayQatarRomaniaRwandaSenegalSierra LeoneEl SalvadorSomaliaSerbiaSlovak RepublicSloveniaSwedenC

132、hadTogoThailandTajikistanTunisiaTanzaniaUgandaUkraineUruguayUzbekistanViet NamSouth AfricaZambiaZimbabwe010203040506070806789101112Average speed as compared with slowest country(km/h)Log of GDP per capita,purchasing power parity(current international$)4 SHRINkING ECoNoMIC DISTANCEinterregional and i

133、nternational trade,with a 1 percent reduction in the dis-tance between origin and destination associated with a 1.6 percent increase in trade(Donaldson 2018).A reduction in transport costs also increases pro-ductivity by promoting the clustering of activity;it may trigger investments as firms move i

134、nto a cluster of activity,further increasing agglomeration and productivity(Duranton and Venables 2018).Reductions in domestic transport costs and time can create jobs and shift labor away from the agricultural sector.In Mexico,a 10 percent increase in market access resulted in a 2.96.5 percent incr

135、ease in employment(Blankespoor and others 2017).In Cameroon,Chad,Djibouti,Ethiopia,Kenya,Nigeria,and Somalia,reductions in land transport costs and electricity investments increased manufacturing and services employment at the expense of agricultural employment(Herrera Dappe and Lebrand 2024).The in

136、crease in trade,investment,and productivity,and changes in employment can increase income and welfarefor the entire country and for specific locations.In China,the reduction in transport times and costs as a result of expansion of the highway system between the 1990s and 2000s increased intra-nation

137、al trade,leading to an increase in aggregate real income(Roberts and others 2012),with a relocation of economic activity away from peripheral areas along the highways(Faber 2014).In Sub-Saharan African,a 10 percent reduction in transport costs led to a 2.8percent increase in income for cities 500 ki

138、lometers from the port(Storeygard 2016).Reductions in freight transport time and costs can also help reduce food insecurity.In 2022,over 258 million people experienced high levels of acute food insecurity(FSIN and Global Network Against Food Crises 2023).In Africa,improved road transportation improv

139、ed household nutrition and reduced the number of stunted children(Blimpo,Harding,and Wantchekon 2013;Stifel and Minten 2017).In India,the railways played an important part in improving food security,dramatically reducing the ability of rainfall shocks to cause famines in the colonial era(Burgess and

140、 Donaldson 2010).Reducing inefficiencies that keep transport costs high can also reduce emissions.The use of larger and more fuel-efficient trucks,reduc-tions in empty and partly empty trips,more efficient driving practices,and good-quality roads that allow driving at speeds that minimize emissions

141、can reduce both the private and social costs of transport(Collier and others 2019;Daz-Ramirez and others 2017;Rizet,Cruz,and Mback 2012;Walnum and Simonsen 2015).WHAT DOES THIS REPORT BRING?Shrinking economic distance to bring people and firms closer to each other requires efficient,high-quality tra

142、nsport.Doing so requires reducing the frictions keeping transport prices above an efficient level,times high,and reliability lowthat is,reducing the economic costs oftransport.1 oVERVIEW 5The goal is not to lower transport prices at all costs,which could lead to lower-quality transport with higher t

143、imes and lower reliability,but to decrease the economic costs of transport.This report assesses the main determinants of the economic costs of freight transport in developing countries and identifies the frictions keeping transport prices above an efficient level,times high,and reliability low.The r

144、eport focuses on maritime and road transport,the dominant modes of transport in international,domestic,and regional trade.The emphasis is on road transport,an area in which evidence has been scarcer than it is in maritime transport.Drawing on important new sources of evidence(see box O.1 for a brief

145、 description of background papers and appendix A for a description of datasets used)and compiling many others,the report provides benchmarks and evidence to inform the design of policies to deepen the economic integration of developing countries.BOX O.1Background papers prepared for this reportRoad

146、transport Coar(2022)reviews the literature on overland transport costs,particular-ly trucking,with a focus on the methodologies and data used to estimate costs.Allen and others(2024)develop a new spatial model to study the effect of imperfect competition in the transport sector on transport prices a

147、nd the way in which investments in infrastructure cannot only reduce physical costs of shipping but also improve competition and induce better firms to enter the transport sector.The paper uses shipment-level data on nonag-ricultural shipments in Colombia between 2015 and 2021(excluding 2018),coveri

148、ng a total of 50 million trips to confirm the models predictions.Daz de Astarloa and Pkhikidze(2024)estimate internal trade costs for six low-or middle-income countries(Georgia,kenya,Madagascar,Nigeria,Rwanda,and Tanzania).The paper exploits unit-level price data collected by countries national stat

149、istical offices for consumer price index calcula-tion purposes and applies the price differential methodology.Iimi(2023)studies long-haul road shipments in seven countries in East-ern Europe and Central Asia(Azerbaijan,Georgia,kazakhstan,the kyrgyz Republic,Tajikistan,Turkmenistan,and Uzbekistan)to

150、understand how carrier costs correlate with distance,average speed,freight volume,and topography.Yang(2024)conducts a meta-analysis of estimates of empty trips,emp-ty miles,and backhaul probabilities covering 40 years and 27 countries.(continued)6 SHRINkING ECoNoMIC DISTANCEThepaper also reviews the

151、 empirical evidence behind three potential mech-anisms behind empty tripsgeographic imbalances in freight demand,search and matching frictions,and regulatory barriersand develops a stylized model to capture these sources and evaluate potential policies.Akbar and others(2024)investigate travel speed,

152、reliability,and con-gestion of road travel between cities in 134 countries and analyze their association with road infrastructure availability and physical and human geography.Using a standard web-mapping platform,they collect data on the travel time of trips between cities that represent a large ma

153、jority of cities with over 50,000 people,excluding China and the korean peninsula.Herrera Dappe,Lebrand,and others(2024)study patterns and deter-minants of transport prices in 60 low-and middle-income countries in 201920,covering 53,106 shipments transported across 4,659 different routes,using a pro

154、prietary dataset of transport contracts to deliver food.The paper identifies the role of distance,quality,and availability of road infrastructure;seasonal rain patterns;conflict;economic geography;and border frictions associated with the ability of foreign shippers to access the market.Molnar and Sh

155、ilpi(2024)use freight transaction data from a digital truckingplatform in India that covers almost 480,000 freight transaction records for 201720.The paper examines the relationship between freight rates and a wide range of determinants,such as road infrastructure(including roads managed under publi

156、c-private partnerships),urban congestion,topography,and truck characteristics.Maritime transport Ardelean and others(2022)review the research on the determinants of maritime shipping,focusing on containerized and dry-bulk shipping and emphasizing recent trends and determinants of freight rates.The p

157、aper also presents several novel empirical exercises that draw insights from the literature.Herrera Dappe,Serebrisky,and others(2024)study the role of port per-formance as a determinant of maritime shipping costs across the globe,using various measures of performance,including the World Banks Con-ta

158、iner Port Performance Index and a measure of technical efficiency esti-mated by the authors.The paper uses detailed data on over 250 container ports in 97 countries and close to 2 million observations on maritime ship-ping costs to the United States.BOX O.1 Background papers prepared for this report

159、(continued)A deeper understanding of the frictions driving the economic costs of freight transport can help policy makers target reforms in areas in which they can be expected to have the greatest impact and avoid unintended con-sequences.This report contributes to the debate on developing an effici

160、ent,high-quality freight transport sector by putting forward oVERVIEW 7policy options to tackle the frictions keeping transport prices above an efficient level,times high,and reliability low and a framework for the design of country-specific reform agendas.The report is organized as follows.Chapter

161、1 presents stylized facts and benchmarks on freight transport costs.Chapter 2 introduces a framework that links the factors that determine the economic costs of transports with their components and identifies the interactions among them.Chapter 3 provides new empirical evidence on the role of physic

162、al geography and infrastructure in determining transport costs.Chapter 4 identifies market failures and market frictions that affect transport times and prices.Chapters 5 and 6 present policy options and a framework that can help policy makers design country-specific reform agendas.Appendix A presen

163、ts the main datasets used.Appendix B dis-cusses methods for measuring overland transport costs.The rest of this over-view presents the reports main findings and policy recommendations.WHAT MATTERS IS ECONOMIC DISTANCEThe economic costs of transport depend on several factors,which interact with each

164、other in complex ways to determine the price,time,and reliability of transport(refer to figure O.3).Through their impact on fixed and variable costs,the utilization of trucks and vessels,and the mark-ups charged by transport service providers,the physical and economic geogra-phy,infrastructure in pl

165、ace,inputs required to provide transport services,FIGURE O.3Economic costs of freight transport and its determinantsSource:Original figure for this publication.TransportserviceproviderTransport priceTransport timeand reliabilityDemandEconomic geographyPhysical geographyInfrastructureEquipment and la

166、borMarket structurePolicies and regulationsInformation8 SHRINkING ECoNoMIC DISTANCEstructureof the transport market,policies and regulations,and the informa-tion on business opportunities affect the operation of transport service pro-viders and hence the price they will have to receive to be willing

167、 to supply services.Economic geography and information on available services and prices are important determinants of the demand for transport services and the price shippers are willing to pay.All of these factors also play a role in determining the quality of the transport service in terms of time

168、 and reliability.EFFICIENT,HIGH-QUALITY INFRASTRUCTURE CAN REDUCE THE FRICTION OF DISTANCEPhysical geography,particularly distance,is an important determi-nant of transport times and prices.The prices for trucking services increase with distance.The total transport price of a road shipment increases

169、 by about 3.1 percent for every 10 percent increase in trip distance(the increase is not proportional because of the fixed costs of shipping).In a sample of shipments in 60 low-and middle-income countries,moving from the 25th to the 75th percentile of travel distance for a representative shipmenttha

170、t is,increasing from about 112 kilometers(km)to 420 kmis associated with a 43 percent decline in the transport unit price($/ton-km)(Herrera Dappe,Lebrand,and others 2024).The topography of the terrain also increases transport costs,because of higher fuel consumption,longer travel times,and longer di

171、stance,as routes in mountainous areas are more tortuous.Transport infrastructure can reduce the frictions of distance and topography,but the extent of the reduction depends on the quality and service level of the infrastructure.Removing 100 km from the trip distance for the median road shipment is a

172、ssociated with a total transport price saving of about 20 percent(Herrera Dappe,Lebrand,and others 2024).Compared with shipments traveling on routes that do not use highways at all,shipments that travel on highways for the entire length of their routes have 20 percent lower transport prices per ton-

173、km on average(Herrera Dappe,Lebrand,and others 2024).Traveling along major highways in India reduces transport costs by 17.419.2 percent compared with traveling along roads with a lower service level(Molnar and Shilpi 2024).In Malawi,the trucking rates for bad roads are 915 percent higher than rates

174、 on all-weather roads(Ksoll and Kunaka 2016).The capacity and quality of transport infrastructure are import-ant determinants of time-related costs.Congestion is more important within than between cities.For intercity travel,the difference between the fastest time of day and the slowest time of day

175、is only 2 km per hour relative to an average speed of about 70 km per hourabout 3 percent(Akbar and others 2024).In contrast,the slowest time of day in urban travel is 25 percent slower than the fastest across 1,119 cities(Akbar and others 2024).Road characteristics,such as the number of lanes,surfa

176、ce types,road lighting,and the quality of roads,are among the most important determinants of speed on oVERVIEW 9interurban roads.Other potential important determinants are the quality of the vehicles and driver behavior.The poor quality of transport infrastructure can increase the impact of extreme

177、weather events by hindering the ability of the transport sector to move goods and keep the economy functioning during those events.Shipments during the rainy season pay a premium of about 6 percent on average.The effects are heterogeneous across countries,with the increase in transport price associa

178、ted with the rainy season higher in countries in which road infrastructure quality is lower(refer to figure O.4).The availability of good-quality infrastructure can affect the intensity of competitionand hence transport pricesacross routes and regions within countries.On routes in Colombia that are

179、more costly to serve because they are farther from economic activity and not well connected,fewer and smaller truckers provide services at higher prices(Allen and others 2024).The intensity of competition on a route also depends on the alternative transport modes available.In India,for example,truck

180、ing prices are higher on routes with weaker competition from rail(Molnar and Shilpi 2024).The availability and quality of port infrastructure and the opera-tion of ports are important determinants of maritime shipping costs.Policy makers can influence both.Raising efficiency in the use of container

181、port facilities from the 25th to the 75th percentile reduces shipping costs by 3.2 percent(Herrera Dappe,Serebrisky,and others 2024).The country with the least efficient port sector in the sample could reduce maritime transport costs by 60 percent if it became as efficient as the most efficient coun

182、try.FIGURE O.4Median transport price premium in the rainy season for median shipment,byquality of a countrys road infrastructure Source:Herrera Dappe,Lebrand and others 2024.Note:The increase in transport price is relative to Trkiye(the benchmark country).Quality of road infrastructure is classified

183、 from 1=lowest to 7=highest.1.6110.6530.4620.1080.00.20.40.60.81.01.21.41.61.82.02.02.93.03.94.0 and abovePrice increase($per ton-km)Quality of road infrastructure(17)10 SHRINkING ECoNoMIC DISTANCESimilar results are found when looking at the operational performance of container ports as measured by

184、 the World Banks Container Port Performance Index,which is based on the time vessels spend at ports.Raising operational performance from the 25th to the 75th percentile reduces shipping costs by37 percent.The country with the lowest average performance in the sam-ple could reduce maritime transport

185、costs by over 92 percent if it matched the performance of the best-performing country in the sample in 2021.Privately operated ports and those with good landside connectivity tend to have better performance and lower maritime transport costs.THERE IS A LIMIT ON HOW MUCH INFRASTRUCTURE CAN REDUCE ECO

186、NOMIC DISTANCEIn competitive markets,service providers and consumers can freely enter and exit and agree on prices for their transactions.In such markets,the price for a service represents its marginal cost.Service providers that are faced with vigorous competition are continually pressed to become

187、more efficient and productive,which drives innovation through investments in capital and new technologies and processes.Competition leads service providers to strive to offer higher-quality services and lower prices.Several countries have deregulated their trucking sectors over the past few decades,

188、creating competitive sectors.In other coun-tries,markets for trucking services are still not competitive,because of price regulation,formal and informal entry barriers that lead to high concentration,and collusion.Eighteen out of 83 emerging markets and developing economies(EMDEs)for which data are

189、available regulate trucking prices,mostly in response to pressure from trucking associations and unions.A common policy that softens competition is to restrict the entry of foreign trucking operators.Thirty-one of 94(non-island)EMDEs do not allow cross-border delivery of cargo,and only 7 of 43 allow

190、 cabotage ser-vices(pickup and delivery of cargo inside the same country).In some coun-tries,including Bangladesh and West and Central African countries,trucking unions and associations control access to loads and prices,the latter not just by influencing government regulation but through intermedia

191、ries who set prices and allocate jobs to carriers in noncompetitive ways.Imperfect compe-tition on routes across Colombia means that prices are higher on routes with less intense competition.A 10 percent increase in a truckers market share on a route yields a 0.57 percent increase in the average pri

192、ce on the route.The evidence shows that regulation of trucking markets hurts shippers and the economy in general and that deregulation yields significant gains.Price floors for trucking services in Colombia led to about 50 percent higher prices on average and a 40 percent average reduction in shippe

193、d tonnage,reducing the efficiency of the market.This led to a loss to society of 812 percent of the market value of transportation services in a competitive market(Hernndez and Cantillo-Cleves 2024).On average,shipping food across a border in low-and middle-income countries is about oVERVIEW 1170per

194、cent more expensive than shipping within a country.The border pre-mium is smaller when trucking companies from a richer neighboring coun-try are allowed to compete in the local market(Herrera Dappe,Lebrand,and others 2024).The deregulation of the trucking sector in the Czech Republic,France,Hungary,

195、Mexico,Poland,and the United States led to significant entry into the market,productivity gains,lower carrier costs,improve-ments in the quality of services,and reductions in the trucking prices paid by shippers(Combes and Lafourcade 2005;Dutz,Hayri,and Ibarra 2000;Teravaninthorn and Raballand 2009;

196、Winston and others 1990;World Bank and IRU 2016;Ying 1990;Ying and Keeler 1991).Consolidation and increased cooperation in the container ship-ping industry can bring benefits in terms of economies of scale and scope and lower search costs,but it has also raised concerns about higher prices among shi

197、ppers and governments because of increased market power.There is evidence that larger trade flows prompt carriers to use larger vessels,to take advantage of economies of scale,which yields lower shipping rates on thick routes(Asturias 2020).There is also evidence of market power in container shippin

198、g,although it is weaker on thicker routes(Hummels and others 2009).Evidence also shows that on routes with several carriers,the cost of requesting and analyzing quotes allows container carri-ers to price discriminate,charging lower rates for the same service to larger shippers(Ardelean and Lugovskyy

199、 2023).Hence,it is important to assess the extent of concentration at the route and country level as well as its costs and benefits to determine whether shipping rates are above an efficient level.Competition between and within ports is conducive to lower maritime shipping costs.Ports operating in m

200、ore competitive environ-ments need to perform more efficiently to attract and retain traffic,which leads to lower maritime shipping costs.The competition environment in the container port sector varies significantly across ports.It is strongly associated with the operational efficiency captured in t

201、he World Banks Container Port Performance Index and with efficiency in the use of port facilities(technical efficiency)(Herrera Dappe,Serebrisky,and others 2024).Trucks and cargo vessels that run empty are a common feature across the world;they are associated with higher transport prices.The lower t

202、he chances the return trip will be empty,the lower the price for the front leg.Regulations that forbid or limit the ability of trucks and vessels to pick up cargo at the destination and information frictions that limit the ability of shippers and carriers to find each other increase the probability

203、of empty trips and hence transport prices for loaded trips.Measures to tackle these market failures and government-created frictions will increase asset utilization and reduce transport prices.The distribution of economic activityparticularly differences in economic densityis an important determinan

204、t of transport demand and the incidence of empty trips.For a given origin,the lower the economic density of the destination,the higher the price of the trip to the destination.Data on contract prices for trucking services to deliver food in low-and middle-income countries facing food security issues

205、 show that 12 SHRINkING ECoNoMIC DISTANCEthe price to deliver cargo to a destination with economic density in the 75th percentile is about 14 percent lower than the price to a destination whose economic density is in the 25th percentile(Herrera Dappe,Lebrand,and others 2024).The difference tends to

206、be larger for spot than contract prices,because shipping contracts allow transporters to plan the utilization of their trucks and vessels and to optimize their route by signing up with shippers in the destination area to reduce the empty backhaul.Measures to promote cargo aggregation from neighborin

207、g areas can increase demand and reduce the problem of empty backhauls on long-distance trips.Trucking prices are higher in fragile and conflict-afflicted locations.In Somalia,for example,trucking prices are$0.14$0.56 per ton-kmabove international benchmarks for low-and middle-income countries(World

208、Bank 2021).The price per ton-km for transporting food in areas experiencing con-flict is 37 percent higher than the average price in low-and middle-income countries(Herrera Dappe,Lebrand,and others 2024).Prices are higher because of the cost of checkpoints,roadblocks,and other security measures;the

209、need to pay higher salaries;and the risk premium charged by carriers.SHRINKING ECONOMIC DISTANCE REQUIRES EFFICIENT MARKETS FOLLOWED BY EFFICIENT PLACESAll countries are different;the content and pace of implementation of the reform agenda to achieve efficient,high-quality transport and reduce econo

210、mic distance needs to be tailored to the frictions and institutional and socio-political characteristics of each country as well as to government capacity.In all settings,however,the reform agenda must include efforts to reduce frictions that make markets and places inefficient(refer to figure O.5).

211、Making markets efficient requires tackling the market failures and market frictions caused by governments along the transport supply chain;making places effi-cient requires tackling the frictions of physical and economic geography and those related to infrastructure availability,quality,and operatio

212、n.Without efficient markets,the full benefits of measures to ensure efficient places will not be realized,so places should follow markets.Making markets efficient is critical Achieving efficient market outcomes in the freight transport sector requires an enabling business environment.Such an environ

213、ment is created through laws,rules,and regulations that set conditions on transport operators,workers,and equipment and reduce frictions in input,intermedi-ate service,and transport service markets.Well-functioning institutions with the capacity to enforce laws,rules,and regulations are paramount to

214、 creating and sustaining an enabling business environment.Achieving efficient market outcomes will require different mea-sures in different countries and markets.These measures can be grouped oVERVIEW 13into three high-level actions:strengthening competition for and in the mar-ket,promoting the deve

215、lopment of efficient transport service providers,and promoting demand aggregation and matching.Strengthening competition for and in the market requires enact-ing a competition law,creating and empowering an independent com-petition authority capable of enforcing the law,and aligning government inter

216、ventions in markets with competition principles.The latter includes avoiding regulating prices unless there is a natural monopoly;avoiding restricting market access,particularly through quotas and quantitative restrictions;and separating the regulatory function from the service pro-vision function.I

217、n the port sector,competition for and in the market can be strengthened by encouraging private sector participation through the landlord model and ensuring transparent and competitive concession bidding.Implementation of transparent,market-based slot-allocation mechanisms for access to cargo at port

218、s and multimodal terminals can help prevent anticompetitive practices.Promoting the development of efficient transport service providers requires regulating access to the profession by setting clear standards and requirements for transport service providers,transport workers,and equip-ment.These sta

219、ndards and requirements need to be designed in a way that does not promote informality or restrict competition.Regulations should be standardized and homogenized across subnational governments,and they should be consistent with international best practices.Measures that pro-mote the skill developmen

220、t of transport operators and workers,tackle fric-tions distorting input markets and ancillary sectors hindering operators and workers access to the profession,and support the formalization of operators FIGURE O.5Building blocks for shrinking economic distance Source:Original figure for this publicat

221、ion.ReducedeconomicdistanceEfcient and high-qualitytransportEfcient placesEfcient markets14 SHRINkING ECoNoMIC DISTANCEwill go a long way toward developing efficient transport service providers.Enforcement of the laws and regulations applicable to transport is essential for achieving an efficient,hi

222、gh-quality transport sector;developing strong enforcement capacity is therefore critical.Promoting demand aggregation and matching will support effi-cient market outcomes.It can be done by supporting the development of competitive intermediaries,including online platforms and marketplaces,and consol

223、idation centers and logistics clusters,to increase the density of demand and reduce information frictions.Once markets are efficient,policy makers need to help make places efficientEfficient places mean that all places in the transport networkfrom road,rail,and water links to the nodes such as ports

224、 and border postsare properly planned and function well.Ports and border posts must be efficiently operated,and traffic,particularly in urban areas,must be effectively managed.Making places efficient requires different measures in different countries.They can be grouped under three high-level action

225、s:developing adequate transport infrastructure,improving the efficiency of ports and bor-der crossings,and managing urban congestion.Developing adequate transport infrastructure starts with identifying,appraising,and selecting all transport infrastructure investment projects together,as part of an i

226、ntegrated transport master plan based on robust appraisal methodologies.It also requires a strong project implementation process,from procurement to monitoring of the physical and financial execution of projects,and the consistent application of all-weather and climate-resilient construction standar

227、ds and axle-load limits.Two requisites for high-quality transport infrastructure are(a)imple-mentation of asset management systems to monitor the state of existing infrastructure and ensure that their maintenance needs are met on a timely basis,based on prespecified standards,and(b)the availability

228、of adequate funding.Funding can be provided through dedicated mainte-nance funds,such as road funds.Such funds must be held to strict gov-ernance and transparency standards,and their accounts must be fully reflected in the governments accounts.Another important measure to ensure adequate funding for

229、 mainte-nance is the preparation of sufficiently disaggregated rolling medium-term expenditure frameworks to guide the annual budget process.These frame-works should incorporate the projected maintenance costs of ongoing and approved new investment projects.Mobilizing the private sector through publ

230、ic-private partnerships(PPPs)can also help develop adequate infra-structure.Doing so requires a robust PPP preparation,procurement,and contract and fiscal management framework.oVERVIEW 15 Developing efficient ports and border crossings requires aligning the investments in infrastructure and superstr

231、ucture with the integrated transport master plan and implementing policies and regulations,such as customs and land use policies,that promote efficient operation of the nodes and prevent unnecessary trips.Investing in the digitalization of ports and border crossings can also promote efficiency and e

232、ncourage pri-vate sector participation in the port sector.Managing urban congestion can be done through several measures.They include supply-side measures,such as targeted infrastructure invest-ments,on-street parking management,vehicle-related access restrictions and lane management,and demand-mana

233、gement measures,such as freight demand and land use management,congestion pricing,intelligent transport systems,last-mile delivery practices,and mode shifts measures for passenger travel.Several considerations need to be taken into account in appraising policies to reduce economic distance Policy ma

234、kers are likely to face tradeoffs when designing policies to achieve efficient,high-quality transport,partly because of the het-erogenous impacts of policies on transport prices and time across space and groups of firms(refer to figure O.6).For example,policies that reduce the cost of providing truc

235、king services on some routes can benefit shippers on FIGURE O.6Theory of change of transport interventions to reduce economic distanceSource:Original figure for this publication.Policyinterventionsto reducefrictions in:MarketsPlacesEconomic costsof transport:PriceTimeReliabilityIntermediate economic

236、 outcomes:Nontransport pricesInvestmentsTradeLocationAgglomerationProductivityJobsStructural changeWider economic outcomes:EconomicwelfareEquitySustainabilityHeterogeneous efectsTradeofsSynergies16 SHRINkING ECoNoMIC DISTANCEthose routes but might hurt shippers on other routes if there is a relocati

237、on of truckers to the less costly routes.Policies to build new transport infra-structure might reduce the funding for maintenance of the existing network,jeopardizing the service level.Policies that increase competition might hurt small shippers if they face significant search costs.Policy makers ma

238、y also face tradeoffs and synergies from outside the transport sector.Some places and groups may gain more than oth-ers,and some may actually lose out,mostly because of the relocation of economic activity.There is a potential tradeoff between efficiency andequity.Policies that yield the highest econ

239、omic return by promoting various efficiency gains may,for example,increase inequalities;policies generat-ing lower returns may be more beneficial to the poor and people in disad-vantaged locations(Lall,Schroeder,and Schmidt 2014;Roberts and others 2019).Another important tradeoff may arise between e

240、conomic welfare and environmental quality.Policies that expand market access increase trade and income,but they may lead to deforestation.There are potential synergies between economic welfare and equity,with reductions in transport costs yielding productivity gains and investments,increasing wages,

241、and creating new jobs in areas with unemployment.Appraisal of policies to reduce economic distance needs to start with a clear understanding of the main problem the policy aims to address and the key market failures and policy-driven frictions that warrant government intervention.It is important to

242、properly estimate the quantity effectsthat is,the changes in employment,output,and other outcomes of interest caused by the policy relative to a scenario without itdifferentiating between creation and relocation of economic activity.It is also important to properly value the quantity changes,ensur-i

243、ng that they are of net social value(Duranton and Venables 2018;Laird and Venables 2017).Properly establishing the quantity effects,valuing them,and con-sidering potential tradeoffs and synergies requires understanding the mechanisms at workthat is,the theory of change from intervention to changes i

244、n transport prices,costs,and reliability,and to changes in inter-mediate and wider economic outcomes.NOTE1.Shipper-borne economic costs of transport are often referred to as generalized transport costs or the transport-related component of logistics costs.REFERENCESAkbar,P.A.,V.Couture,G.Duranton,L.

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252、ernal Trade Costs in Developing Countries.”Policy Research Working Paper 10789,World Bank,Washington,DC.Background paper prepared for this report.Daz-Ramirez,J.,N.Giraldo-Peralta,D.Flrez-Ceron,V.Rangel,C.Meja-Argueta,J.I.Huertas,and M.Bernal.2017.“Eco-Driving Key Factors That Influence Fuel Consumpt

253、ion in Heavy-Truck Fleets:A Colombian Case.”Transportation Research Part D:Transport and Environment 56:25870.Donaldson,D.2018.“Railroads of the Raj:Estimating the Impact of Transportation Infrastructure.”American Economic Review 108(45):899934.Donaldson,D.,A.Jinhage,and E.Verhoogen.2017.“Beyond Bor

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256、,and N.Rocha.2011.“What Constrains Africas Exports?”World Bank Economic Review 25(3):36186.FSIN(Food Security Information Network),and Global Network Against Food Crises.2023.Global Report on Food Crises 2023.Rome.18 SHRINkING ECoNoMIC DISTANCEGanapati,S.,and W.F.Wong.2023.“How Far Goods Travel:Glob

257、al Transport and Supply Chains from 19652020.”Journal of Economic Perspectives 37(3):330.Hernndez,C.E.,and S.Cantillo-Cleves.2024.“A Toolkit for Setting and Evaluating Price Floors.”Journal of Public Economics 232.Herrera Dappe,M.,and M.Lebrand.2024.“Infrastructure and Structural Change in Africa.”W

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260、ting Road Freight Transport Costs in Eastern Europe and Central Asia Using Large Shipping Data.”Policy Research Working Paper 10533,World Bank,Washington,DC.Background paper prepared for this report.Ksoll,C.,and C.Kunaka.2016.“Malawi Country Economic Memorandum Trade and Logistics Background Paper.”

261、World Bank,Washington,DC.Laird,J.,and A.J.Venables.2017.“Transport Investment and Economic Performance:A Framework for Project Appraisal.”Transport Policy 56:111.Lall,S.V.,E.Schroeder,and E.Schmidt.2014.“Identifying Spatial EfficiencyEquity Trade-Offs in Territorial Development Policies:Evidence fro

262、m Uganda.”Journal of Development Studies 50(12):171733.Lall,S.,S.Sinha-Roy,and F.Shilpi.2022.“Trucking Costs and the Margins of Internal Trade:Evidence from a Trucking Portal in India.”Policy Research Working Paper 10059,World Bank,Washington,DC.Molnar,A.,and F.Shilpi.2024.“Urban and Infrastructure

263、Determinants of Freight Cost in India.”World Bank,Washington,DC.Background paper prepared for this report.Redding,Stephen J.2022.“Trade and Geography.”In“Handbook of International Economics,ed.Gita Gopinath,Elhanan Helpman,and Kenneth Rogoff,147217.Amsterdam:Elsevier-North Holland.Rizet,C.,C.Cruz,an

264、d M.Mback.2012.“Reducing Freight Transport CO2 Emissions by Increasing the Load Factor.”ProcediaSocial and Behavioral Sciences 48:18495.Roberts,M.,U.Deichmann,B.Fingleton,and T.Shi.2012.“Evaluating Chinas Road to Prosperity:A New Economic Geography Approach.”Regional Science and Urban Economics 42(4

265、):58094.Roberts,M.,M.Melecky,T.Bougna,and Y.Xu.2019.“Transport Corridors and Their Wider Economic Benefits:A Quantitative Review of the Literature.”Journal of Regional Science 60:20748.Stifel,D.,and B.Minten.2017.“Market Access,Welfare,and Nutrition:Evidence from Ethiopia.”World Development 90:22941

266、.Storeygard,A.2016.“Farther on Down the Road:Transport Costs,Trade and Urban Growth in Sub-Saharan Africa.”Review of Economic Studies 83(3):126395.Teravaninthorn,S.,and G.Raballand.2009.Transport Prices and Costs in Africa:A Review of the International Corridors.Washington,DC:World Bank.Walnum,H.J.,

267、and M.Simonsen.2015.“Does Driving Behavior Matter?An Analysis of Fuel Consumption Data from Heavy-Duty Trucks.”Transportation Research Part D:Transport and Environment 36:10720.Winston,C.,T.M.Corsi,C.M.Grimm,and C.A.Evans.1990.The Economic Effects of Surface Freight Deregulation.Washington,DC:Brooki

268、ngs Institution.World Bank,and IRU(International Road Transport Union).2016.Road Freight Transport Services Reform:Guiding Principles for Practitioners and Policy Makers.Washington,DC:World Bank.oVERVIEW 19World Bank.2021.Somalia Country Economic Memorandum:Towards an Inclusive Jobs Agenda.Washingto

269、n,DC:World Bank.Yang,R.2024.“Geographic Imbalance,Search Frictions,and Regulation:Causes of Empty Miles in Freight Trucking.”Policy Research Working Paper 10775,World Bank.Washington,DC.Background paper prepared for this report.Ying,J.S.1990.“The Inefficiency of Regulating a Competitive Industry:Pro

270、ductivity Gains in Trucking Following Reform.”Review of Economics and Statistics 72(2):191201.Ying,J.S.,and T.E.Keeler.1991.“Pricing in a Deregulated Environment:The Motor Carrier Experience.”Rand Journal of Economics 2(2):26473.21The Cost of Moving Goods across the World1MAIN MESSAGES1.Transport co

271、sts fell over the past decades,but the world is still far from a single integrated economy,and poorer countries face higher freight transport costs than wealthier countries.On average,domestic transport costs to export and import in low-and middle-income countries are twice as high as in high-income

272、 countries,and differences for within-country transport costs can be even larger.2.Trucking rates vary significantly across countries.Roughly 75 percent of the variation in the per ton-kilometer cost of shipping food in countries facing food insecurity is within countries,with the remain-ing 25 perc

273、ent between countries.3.It takes significantly longer to move goods within poorer countries.Intercity travel tends to be persistently slower in poorer countries,with transport in a country in the top decile of intercity road speed about twice as fast as in a country in the bottom decile.Domestic tim

274、es to export goods are higher in developing countries,with a significant share of the time within the exporting country spent at the port.4.Border frictions are significantly greater in low-and middle-income countries than in high-income countries.The average time to comply with border regulations t

275、o export ranges from 24 hours in high-income countries to 97 hours in low-income countries,with the time in middle-income countries falling in between.22 SHRINkING ECoNoMIC DISTANCEINTRODUCTIONDeclining international trade costs over the past several decades has helped spur the growth of trade,a mai

276、n driver of economic growth and economic convergence between developing and developed economies.Despite the decline in international trade costs,however,the world is still far from being a single integrated economy.Trade does not start or stop at national borders;high domestic transport costs limit

277、the integration of firms and households with the global economy.Distance matters;geography creates barriers to mobility for goods,services,innovations,and people.Economic distancethe cost of traveling and moving goodsmatters both across and within countries,creating obstacles to progress and increas

278、ing regional inequalities.Shippers care not only about the direct costs of transport but also about the time it takes to transport goods and its reliability.Direct costs refer to the price shippers pay to a third party that provides the transport service or the cost of using their own vehicles and v

279、essels.The quality of freight transport services,measured by time and reliability,affect firms costs through inven-tory costs,the design of supply chains,the location of warehouses and pro-duction facilities,and other decisions firms need to make to cope with long transport lead times and poor relia

280、bility.This chapter presents empirical evidencebased on both new and exist-ing databasesthat international and domestic transport costs are higher in developing countries than in developed countries.New data also show that domestic times to export goods are higher relative to the distance traveled w

281、ithin the country.Time at borders and ports represents a large share of the time it takes for goods to be exchanged across borders.Travel speed in interurban roads varies widely across countries,with richer countries able to move goods within their borders more quickly than poorer countries do.This

282、chapter is organized as follows.The first two sections present evi-dence of higher international maritime and domestic trucking costs in devel-oping countries,respectively.The third section provides evidence of longer time and lower reliability of international and domestic transport in devel-oping

283、countries,focusing on port and border bottlenecks as well as the time spent moving goods from the port to the hinterland and between cities.HIGH AND VOLATILE INTERNATIONAL TRANSPORT COSTS IN DEVELOPING COUNTRIES Declining international trade costs over the past several decades have been an important

284、 contributor to the rapid growth of trade,a main driver of economic growth.The period between 1870 and 1914 saw an almost uninterrupted fall in maritime shipping costs relative to the prices of the commodities carried along almost all routes;that decline stopped with World War I(Mohammad and William

285、son 2004).Transport costs fell dramatically in the postWorld War II period,declining by 3339 percent by weight and 4862 percent by THE CoST oF MoVING GooDS ACRoSS THE WoRLD 23value over the past half-century,reflecting large productivity increases and technological advances(refer to figure 1.1).Tech

286、nological innovations and investments in infrastructure have ledto major reductions in transport costs since the 1850s.Economic historians have documented how technological change led to substantial reductions in ship-ping costs between 1850 and 1913(Harley 1980;North 1968;Mohammed and Williamson 20

287、04).The decades since World War II also witnessed significant technological change in shipping,including the development of jet aircraft engines and the use of containerization in ocean shipping,first introduced in 1956.The cost of air transport fell by a factor of more than 10between 1955 and 2004,

288、and the container price index declined by about 50 percent between 1985 and 2004(Hummels 2007).By 1983,almost 90percent of countries had container-handling infrastructure(Rua 2014).By the end of 2015,the largest containership built that year(the MSC Oscar)had a capacity 24times that of the first con

289、tainer ships.As costs fell,use of global transport soared.Transport usage can be measured by weight or value multiplied by distance traveled(the weight measure puts emphasis on bulk cargo;the value places emphasis on the transport of goods with higher value-per-weight,such as machinery,automobiles,a

290、nd elec-tronics).After accounting for economic growth,real transport use per unit of final consumption more than doubled between 1965 and 2020,increas-ing 100 percent by weight and 160 percent by value(Ganapati and Wong 2023).Three factors can explain this increase:(a)increasing participation of FIG

291、URE 1.1International transport costs,by weight and value,19652013Source:Ganapati and Wong 2023.Note:Figure is based on the sum of all global transportation costs in a given year,divided by trade use for that year(either value of or tons of trade)multiplied by distance.The upper-bound estimate is bas

292、ed on the scenario in which all aggregate transport spending is on international trade;the lower-bound estimate reflects spending on both international and domestic trade.Values are normalized to 1 in 1970.Figure is based on a consistent sample of 24countries representing 90 percent of world gross d

293、omestic product.00.20.40.60.81.01.21965197019751980198519901995200020052010 2013Index of transport cost(1970=1)Cost of transporting$1 of goods 1 kilometerCost of transporting 1 ton of goods 1 kilometer24 SHRINkING ECoNoMIC DISTANCEemerging economies,particularly China,in global trade;(b)increasing t

294、rade between countries that are farther apart;and(c)shifts in the composition of traded goods,from natural resources to manufactured goods.Lower transport costs have permitted the integration of countries and indus-tries into trade networks and global supply chains.Between 1950 and 2004,world trade

295、grew at an average rate of 5.9 percent a year(Hummels 2007).Manufacturing trade grew even faster,at 7.2 percent a year.Manufacturers are no longer located close to their customers;firms have expanded and even fragmented their production supply chains,altering the geographic location of economic acti

296、vity(Antras and Chor 2022;Redding 2022).However,it remains more expensive for low-and middle-income coun-tries to export to large markets than it is for high-income countries to do so.For example,it is 57 percent more expensive to export to the United States from a low-income country than from a hig

297、h-income country and 32percent more expensive to export to Australia from a lower-middle-income country than from a high-income country for the same distance,weight,and value of exports(refer to figure 1.2).Despite decades of downward trends,transport prices remain very volatile,and the transport ne

298、twork is vulnerable to unforeseen disruptions.Transport prices have always been volatile following economic and geopolitical shocks as well as during commodity booms and busts.Real dry bulk freight rates are estimated to have followed a downward but undulating path(refer to figure 1.3),with real dry

299、 bulk freight rates nearly tripling in some years.Over the long run,shipping demand shocks explain most of the variation in real dry bulk freight rates.Inrecentyears,the COVID-19 pandemic and FIGURE 1.2Average transport price per dollar of goods exported to the United States and Australia,bycountry

300、income groupSource:Original figure for this publication based on data from UNCTAD and World Bank 2024.Note:Figure is based on a simple regression to explain transport costs per value of shipment.Variables include the income group of the exporter,distance,weight,freight on board value,and two-digit c

301、ommodity codes.Income group efectOther efects(distance,weight,value)a.Transport price of exporting tothe United States,201900.020.040.060.080.100.120.140.16Low-incomecountriesLower-middleincome countriesUpper-middleincome countriesHigh-incomecountriesTransport price per dollar oftransport goods($)b.

302、Transport price of exporting toAustralia,2021Low-incomecountriesLower-middleincome countriesUpper-middleincome countriesHigh-incomecountries00.020.040.060.080.100.120.140.16Transport price per dollar oftransport goods($)THE CoST oF MoVING GooDS ACRoSS THE WoRLD 25other events,such as the closure of

303、the Suez Canal in 2021 after a container ship ran aground,disrupted the transport network,leading to huge price volatility.The pandemic had the greatest effect on freight rates on trade routes to developing countries.By early 2021,for example,container freight rates from China to South America had j

304、umped 443 percent,compared with 63 percent on the route between Asia and North Americas east coast(UNCTAD 2021).HIGH DOMESTIC TRANSPORT COSTS IN DEVELOPING COUNTRIES Trade does not start or stop at national borders;high domestic transport costs limit the integration of firms and households with the

305、global economy.International shipping costs have drastically decreased,but domestic transport costs remain a substantial share of overall trade costs.Domestic distribution costs can reach 55 percent of producer pricesmore than twice the share of international transport costs(Anderson and Van Wincoop

306、 2004).In India,trade barriers within the country make up 40 percent of total trade barriers(barriers within the country and at the border)on average,although they vary substantially by state(Van Leemput 2021).Domestic trade costs,which include transport costs,remain high in many low-and middle-inco

307、me countries.Using the price gap methodology dis-cussed in appendix B,Atkin and Donaldson(2015)find that the cost of distance in Ethiopia and Nigeria is approximately 45 times as large as in the United States.The same methodology was applied to a wider sample FIGURE 1.3Dry bulk shipping costs,185020

308、20Source:Jacks and Stuermer 2021.Note:The solid dark blue line represents the real dry bulk freight rate index constructed by Jacks and Stuermer(2021).The dotted orange line is an estimate of the long-run trend derived from the Christiano-Fitzgerald band pass filter,which assumes a cyclical componen

309、t of 70 years duration in the real dry bulk freight rate index.020406080100120140160180200185018601870188018901900191019201930194019501960197019801990200020102020Real dry bulk freight rate index(100=1850)26 SHRINkING ECoNoMIC DISTANCEof countries for this report.This analysis reveals that the cost o

310、f distance is 314 times as large in the countries studied as in the United States(Daz de Astarloa and Pkhikidze 2024).These estimates imply that the cost of trans-porting goods from their origin to relatively remote locations can represent between 7 percent of the final price of goods(in Tanzania)an

311、d 17 percent(in Madagascar)(refer to figure 1.4).Cross-country surveys of traders reveal that domestic transport costs are higher in low-and middle-income countries than in high-income countries.Doing Business surveys provide cross-country estimates of the costs associ-ated with transporting a shipm

312、ent from a warehouse in a countrys largest business city to the most widely used port or border.For a given distance,purchasing power parityadjusted domestic transport costs to export and import in richer countries are half the level faced by low-income countries(refer to figure 1.5).Trucking rates

313、in developing countries Road transportation remains the main mode of shipment in many countries.Except in India,railroads typically account for a small share of the transport system of developing countries,whose infrastructure investments occurred mostly during the second half of the 20th century,af

314、ter the motorized trans-portation revolution.In Africa,for example,roads carry 8090 percent of passenger and freight traffic(Gwilliam 2011).Almost all intra-national trade in mountainous Colombia is done by truck,with trucks accounting for 96percent of tonnage excluding coal and oil transported with

315、in Colombia in2018(Ministerio de Transporte 2018).FIGURE 1.4Estimates of transport costs as a percentage of the mean destination price for locally produced goods in selected countries Source:Daz de Astarloa and Pkhikidze 2024.Note:Estimates are for locally produced goods only and for the following p

316、eriods:Georgia,January 2012December 2020;Kenya,October 2018January 2022;Madagascar,January 2010April 2021;Nigeria,January 2001July 2010;Rwanda,January 2013December 2020;Tanzania,January 2012April 2021.024681012141618GeorgiaKenyaMadagascarNigeriaRwandaTanzaniaAd valorem equivalent transportcosts(perc

317、ent)THE CoST oF MoVING GooDS ACRoSS THE WoRLD 27Trucking rates vary significantly across countries.They are higher in iso-lated and conflict-ridden locations,such as Somalia,where they range from$0.14 to$0.56 per ton-kilometer(ton-km)well above international bench-marks for low-and middle-income cou

318、ntries(refer to figure 1.6).Colombia and Bangladesh have among the highest rates in the worldhigher than some African countries.Trucking rates in Bangladesh range from$0.06 per ton-km for a 16-ton truck to$0.12 per ton-km for a trailer.These rates are so high that trucking costs represent 3188 perce

319、nt of direct logistics costs(Herrera Dappe and others 2020).At the other end,trucking rates in Argentina,Australia,Brazil,the Lao Peoples Democratic Republic(PDR)and the United States are just below$0.04 per ton-km.In India and South Africa,rates average about$0.06 per ton-km;in Malawi,Tanzania,Ugan

320、da,and Zimbabwe,rates are slightly higher,at about$0.08 per ton-km.The cost of shipping food within countries facing food security issues also varies by country.Using data on contracted trucking services by a large humanitarian organization across 60 low-and middle-income countries,Herrera Dappe and

321、 others(2024)find that the cost per ton-km tends to be higher in countries facing conflicts(refer to figure 1.7).Their analysis also finds that 75 percent of the variation in trucking prices per ton-km is within countries,with the remaining 25 percent between countries,and that 60 per-cent of the va

322、riation in unit prices can be explained by differences between destinations for the same origin.Country features,such as geography,infra-structure,and market structure,explain most of the rate differences.FIGURE 1.5Domestic transport costs to import and export,by country income group Source:Original

323、 figure for this publication using data from the 2020 Doing Business survey.Note:Dots show observations by country.Lines are the fitted lines per income group.PPP=purchasing power parity.200400600Distance(km)02,000PPP-adjusted$4,0006,0008001,000a.Cost to import200400600Distance(km)b.Cost to export02

324、,000PPP-adjusted$4,0006,0008001,000High-income countriesUpper-middle-income countriesLower-middle-income countriesLow-income countries28 SHRINkING ECoNoMIC DISTANCEFIGURE 1.6Trucking prices in selected countriesSource:ADB 2016;Herrera Dappe and others 2020;World Bank 2021;Molnar and Shilpi 2024;Nick

325、 Pore and Associates 2023.Note:Figure presents average prices for each country and,for Somalia,the average prices for each corridor.In Bangladesh,the average is for a 7-ton truck,the most used truck in the country.00.10.20.30.40.50.6ArgentinaBrazilAustraliaUnited StatesLao PDREthiopiaChinaNamibiaInd

326、iaIndonesiaSouth AfricaUgandaTanzaniaZimbabweMalawiBangladeshMexicoCte dIvoireSomalia:BerberaLascanodSomalia:BerberaBuhotleColombiaSomalia:BerberaTog WajaleSomalia:KismayoDobleySomalia:BosasoBeledweyneSomalia:MogadishuBeled XawoSomalia:MogadishuDolowSomalia:MogadishuBeledweyneDollars per ton-kilomet

327、erHigh-income countriesLower-middle-income countriesUpper-middle-income countriesLow-income countriesFIGURE 1.7Contract trucking prices to ship food in selected countries Source:Herrera Dappe and others 2024.Note:Bars show median price.Whiskers show 25th and 75th percentiles.Sample includes countrie

328、s with more than 100 observations.Data are from 201920.00.10.20.30.40.50.60.70.80.9ZimbabwePakistanMyanmarSyrian Arab RepublicEthiopiaIraqMauritaniaKenyaZambiaSudanUgandaColombiaSierra LeoneLesothoMalawiNepalBangladeshChadMadagascarAfghanistanCongo,Rep.MozambiqueSomaliaTajikistanBurundiYemen,Rep.Lao

329、 PDRBurkina FasoCameroonHondurasNigeriaNigerLiberiaSouth SudanBeninGuinea-BissauCentral African RepublicGuineaCongo,Dem.Rep.MaliDollars per ton-kilometerNonconflict countriesConflict countries THE CoST oF MoVING GooDS ACRoSS THE WoRLD 29Within-country variation in trucking rates Molnar and Shilpi(20

330、24)document the variation in trucking rates within India.They show that poorer regions in the north and east of the country are more expensive to reach.Rates vary with vehicle and cargo attributes but primarily over space.The average unit rate between each pair of states(or union territories)ranges

331、from Rs.1.50 to Rs.9.70 per ton-km,with a stan-dard deviation of Rs.1.89.The spatial variation can also be seen in terms of the rate premia or dis-count for delivering cargo in a state and the cost per kilometer of crossing a state.An interstate trip to a state in the northeast of the country incurs

332、 a rate premium of Rs.9,000Rs.54,000;trips to Gujarat or Maharashtra enjoy a rate discount of Rs.6,000Rs.18,000.1 Premia and discounts are independent of the kilometers traveled(refer to map 1.1,panel a).MAP 1.1Premia and costs of trucking through states in India Source:Molnar and Shilpi 2024.30 SHR

333、INkING ECoNoMIC DISTANCEMAP 1.2Average trucking prices in Colombia,by destination,2021Source:Original map for this publication based on Allen and others 2024.Note:Map shows weighted-average price(in 2018 dollars)per ton-kilometer per destination.Panel b of map 1.1 shows the variation in the per-km rate that can be attributed to traveling through each state.It ranges from 1.6 to 3.1 times the avera