Transport costs affect the price of goods imported by traders on two levels: (i) the financial cost of the logistics services (from gateway to final clearance, assuming goods are traded on a CIF basis), and (ii) the economic cost of delays and uncertainties on the delivery date (cost of excess inventory).
The Total Logistics Costs is the sum of those two components:
TLC = Financial cost of logistics services + Economic impact of delivery time and uncertainties on shipper
The two components can in turn be broken down into:
Logistics services = Maritime gateway + Inland transport + Final clearance and delivery
Economic impact of time = Inventory costs + Hedging uncertainties costs
The purpose of the logistics cost study was to analyze the composition and the factors influencing the total logistics costs for the main corridors in West and Central Africa, in order to determine how to reduce them. The analyses disaggregate the factors along the corridor broken down between gateway, inland transport, inland borders and final clearance. Inland transport by road is further disaggregated into voyage vehicle operating costs and non-vehicle related fixed costs. The advantage of that breakdown is that different operational scenarios can be tested for trucking operators, based on the utilization of trucks, enabling the identification of vehicle acquisition and operation strategies compatible both with market transport rates and financing costs for trucks. A complete description of the analytical framework is available in the Chapter 2 of the study.
The characteristics of the transport demand on the West and Central Africa corridors are detailed in the chapter 3 of the report. In West Africa, the corridor network constitutes a web of routes, broadly organized between two main East-West routes (the trans-Sahel from Senegal to Niger, and the coastal from Cote d’Ivoire to Nigeria) linked by North-South connectors. As a result, trade volumes are volatile, and can shift from one route to another according to prevailing economic and political conditions. In Central Africa, the corridor network is more linear, and possibilities for alternate routes very limited.
Chapters 4 to 7 present the detailed analysis on the main corridors selected for the study: Abidjan to Burkina Faso and Mali, Cotonou to Niger, the Douala corridors to Chad and CAR, and the Abidjan Lagos coastal corridor.
Chapter 8 summarizes data on five additional corridors in West Africa. Chapter 9 compares the results of corridor performance with international benchmarks, and Chapter 10 draws conclusions about the relationship of policies to logistics costs and suggests potential actions for improvement.