International Trade and Development

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International Trade and Development

• Transportation

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Value of World Trade

• Exports in goods 1998 US5,270 billion
• Exports in goods 1999 US5,473 billion
• Exports in volume terms grew 5.0 per cent in 99
• 50 per cent of trade in value terms by sea
• 70 per cent of trade in volume terms by sea

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International Trade
Information
Goods
Seller
Buyer
Funds
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. . Empirical evidence strongly suggests that
there is a clear link between these three
complimentary elements of a successful
development strategy trade, poverty reduction
and transport efficiency.

• Rubens Ricupero

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Transport chain

• Inland transport
• Port/airport
• Maritime/air transport
• Port/airport
• Inland transport

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Transport chain elements

• Infrastructure - roads, railways, ports,
  airports, communications
• Equipment - trucks, locomotives, wagons, ships,
  cargo handling equipment, airplanes
• Human resources - managers, staff, drivers,
  technicians, labour

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Transport Costs

• Road transport 35.00
• Rail transport 6.00
• Ocean transport 1.00

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Structure of World Seaborne Trade(million of
tons loaded - 2000)

• World seaborne trade 5,230
• Dry cargo 3,028
• Major bulks 1,257
• Other dry 1,771
• Other bulks 771
• General cargo 1,000
• Liquid bulk 2,180
• Crude oil 1,635
• Oil products 568

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Forecast World Seaborne Trade

• Seaborne trade to grow 40 between 1996 and 2006
• Largest growth in container traffic 139
• Oil cargo largest volume but low growth of 16
• Dry bulk growth of 50

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Total freight costs in world trade

• Most trade between developed countries
• Developing countries 25 of total world imports
• Annual growth world imports 4.0 in 1998
• Freight costs as a portion of import value for
  developing countries almost double that of
  developed countries (8.1 vs.. 4.1)

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Ratio of liner freight rates to prices of
selected commodities (1999)

• Rubber Malaysia-Europe 16.3
• Jute Bangladesh-Europe 33.9
• Cocoa beans Ghana-Europe 4.8
• Brazil-Europe 6.0
• Tea Sri Lanka-Europe 5.0
• Coffee Brazil-Europe 2.8
• Colombia-Europe 3.8

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Freight rates on major liner trade routes
(dollars per TEU)

• Transpacific
• Asia-USA 2,200
• USA-Asia 750
• Europe-Asia
• Europe-Asia 780
• Asia-Europe 1,570
• Transatlantic
• USA-Europe 1,030
• Europe-USA 1,130

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Shipping Industry Characteristics

• Annual revenue over 270 billion
• Fleet replacement cost 300 billion
• High fixed cost
• Industry concentration
• High risk -- low rate of return
• Structural over capacity
• Moderate growth
• Privatization of national fleets
• Increasing economies of scale
• Government regulations and subsidies

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World Fleet by Principle Types

• Tanker fleet increased slightly to 284 million
  dwt
• Dry bulk fleet stable
• Break bulk general cargo stable
• Container highest growth sector, now 64 million
  dwt

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Trends in surplus capacity
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World Fleet Forecast

• Expansion to over 880 million dwt
• 32 increase
• Container fleet gain 139
• Dry bulk and combi will become largest sector

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Multipurpose Cargo vessel 15,000 dwt Value about
US20 million Newer vessels still in use in
some African trades and South Pacific trades.
Project cargo
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Tanker Golden Victory 300,000 dwt, Value about
US 90 million
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Developing country realities

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Importance of Ports

• Vital part of national transport infrastructure
• Focal point for roads and railways
• Focal point for commercial infrastructure
• Where most costs and delays occur
• Where customs and government policies are
  implemented

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Liquid Bulk Terminal
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Dry Bulk Terminal
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Terminal requirements

• Deeper draught
• Greater area
• Improve service levels
• Reduce dwell times
• Commercial success
• Obtain additional capital

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Top Container Terminals
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Privatization

• One method of port reform
• Divestment of the government interest in favour
  of the private sector
• Can divest assets or services
• Most often leases or concessions

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Critical factors for privatization

• Labour reform
• Strong government support
• Objectives and action programme
• Financially viable
• Strong and capable private sector
• Promote competition
• Appropriate legal framework
• Good economic situation
• Freedom to set prices

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Manning requirementsConventional berthGang
26 men 100-200 tons per shift5.5 tons per shift
per manContainer berthTeam 12 to 14 men 1,800
tons per shift150 tons per shift per man
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Terminal lease elements

• Area and facilities
• Duration
• Payment
• Labour obligations
• Maintenance / services
• Investments to be made
• Tariff increases
• Renewal
• Cancellation clause
• Environmental standards

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Sources of finance

• Government financing
• Self-financing from reserves
• Debt financing
• Equity financing
• Joint-venture financing
• User financing

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Example of financingPort of Salalah

• Omani government 20
• private Omani investors 19
• pension funds 11
• public offer 20
• Maersk Sealand 30,

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Information flows
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Role of the port authority

• Landlord
• Policy-making and planning
• Regulatory and supervisory
• Monitoring and promotion
• Port training

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UNCTAD and Transport

• UN Conventions
• Research and studies
• Human resource development
• Technical co-operation
• UN agencies and regional commissions

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UN Conventions

• Code of Conduct for Liner Conferences
• International Carriage of Goods by Sea
• International Multimodal Transport of Goods
• Conditions for Registration of Ships
• Maritime Liens and Mortgages
• Arrest of Ships

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Research and Studies

• Review of Maritime Transport
• Guidelines on privatization of port facilities
• Multimodal transport operator handbook
• Monographs on port management
• Handbook for port planners
• Strategic planning for port authorities

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Human Resource Development

• TRAINMAR
• IPP
• General cargo operations
• Container terminal planning
• Equipment management
• Port pricing
• Strategic planning
• Stratship

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Technical Co-operation

• ACIS RailTracker, PortTracker
• Encouraging private sector involvement in
  maritime sector
• Capacity building

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UN Agencies and Regional Commissions

• International Labour Organization
• International Maritime Organization
• World Bank
• Regional Commission (ESCAP, ECLAC, ECA, ECE,
  ESCWA)