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José María Rubiato ElizaldeHead Trade Logistics Branch
Trade Logistics, Transport and Trade Facilitation
Geneva, April 2013
Short courses for Permanent Missions in Geneva
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Programme for todayGeneva,
Palais des Nations Room XXIII
10:00 - 10:05
Welcome address by Mohan Panicker DTL
10:05 - 11:15
International transport: persisting and emerging issues for developing countries: Presented by José María RubiatoFollowed by Q&A
11:15 – 12:30
Trade facilitation: basic concepts, evolving content and most recent developments: challenges and opportunities for developing countries
Presented by José María RubiatoFollowed by Q&A
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10:05 - 11:15
International transport: persisting and emerging issues for developing countries:
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We will discuss
How global trade has evolved recently
What role transport and logistics play
Some challenges Developing Countries face in trade logistics
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Trade, Transport and International Logistics: An Introduction
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Trade, Transport, Logistics and Technologies: An Introduction
1) Globalization
2) Role of transport
3) Role of logistics
4) Role of technologies
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Trade, Transport, Logistics and Technologies: An Introduction
1) Globalization
2) Role of transport
3) Role of logistics
4) Role of technologies
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Globalization of trade
What is meant by “Globalization” of trade? Global production, with increased trade in
components and unfinished products
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Trade in intermediate goods
Source: UNCTAD TD/B/C.I/16, 2011
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Trade in intermediate goods
Source: UNCTAD TD/B/C.I/16, 2011
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Globalization of trade
(past…) international economy: Trade in raw materials and finished products
(Trend towards...) globalized Economy: More trade in intermediate products More trade within companies More JIT (Just in Time Deliveries) Logistics part of production process
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Globalization of trade
The ways and means of Globalization?
Trade liberalization Telematics Standardization Transport and Logistics
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Trade grows faster than GDP
Source: JH based on data from UNCTAD and from WTO
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Elasticity Trade/GDP
Source: UNCTAD
GDP
Exports
-15
-10
-5
0
5
10
15
1971 72 73 74 75 76 77 78 79
1980 81 82 83 84 85 86 87 88 89
1990 91 92 93 94 95 96 97 98 99
2000 01 02 03 04 05 06 07 08 09
2010
per cent annual growth
Exports = 2.5 GDP
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For a country’s GDP to grow, e.g., 5% trade “needs” to grow 7 – 12%
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On the Geography of Trade
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Traditional “Geography of Trade” Transportation of all kinds of
commodities for industrial processing (South -> North)
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Traditional “Geography of Trade” Transportation of all kinds of
commodities for industrial processing (South -> North)
Exchange of industrial products for consumption (North <-> North; and North -> South)
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Traditional “Geography of Trade” Transportation of all kinds of
commodities for industrial processing (South -> North)
Exchange of industrial products for consumption (North <-> North; and North -> South)
Supplies of parts and components for industrial production(North <-> North)
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% participation of developing countries in seaborne trade (tons)
Source: UNCTAD, Review of Maritime Transport, 2011
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% participation of developing countries in seaborne trade (tons)
Source: UNCTAD, Review of Maritime Transport, 2011
Old Scenario: Developing countries exported large volumes of raw materials and imported high value (low volume) manufactured goods
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% participation of developing countries in seaborne trade (tons)
Today’s Scenario: Developing countries participate
in globalized production. They also import raw materials and also export manufactured
goods
Source: UNCTAD, Review of Maritime Transport, 2011
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Before and after “the crisis” Major industrialized countries
• Twenty years up to 2009: +2.2%
• Next twenty years forecast: +1.8%
Major developing countries• Twenty years up to 2009:
+6.3%• Next twenty years forecast:
+5.9% Average
• Twenty years up to 2009: +2.9%
• Next twenty years forecast: +3.5%
Source: IHS-Fairplay, as presented to IAME 2010, Lisbon, July 2010
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Trade, Transport, Logistics and Technologies: An Introduction
1) Globalization
2) Role of transport
3) Role of logistics
4) Role of technologies
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0
1,000,000,000
2,000,000,000
3,000,000,000
4,000,000,000
5,000,000,000
6,000,000,000
7,000,000,000
8,000,000,000
2000 2001 2002 2003 2004 2005 2006
air
land
sea
Mode of transport of global trademetric tons (excluding intra-EU)
Source: Global Insight
0.27%
89.56%
10.17%
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Mode of transport of global tradeUSD (excluding intra-EU)
Source: Global Insight
0
1,000,000,000
2,000,000,000
3,000,000,000
4,000,000,000
5,000,000,000
6,000,000,000
7,000,000,000
8,000,000,000
9,000,000,000
2000 2001 2002 2003 2004 2005 2006
air
land
sea
14.09%
70.07%
15.84%
64.48%
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0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
EU 25(2004)
USA(2003)
Japan(2002)
China(2004)
Russia(2003)
%
Sea (domestic/intra EU)Oil pipelineInland waterwayRailRoad
Tonne-miles. Slide by Michel Savy, IML, 2008
China, EU, Japan,
Russia, USA ?
Modal split: national transport
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0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
EU 25(2004)
USA(2003)
Japan(2002)
China(2004)
Russia(2003)
%
Sea (domestic/intra EU)Oil pipelineInland waterwayRailRoad
Slide by Michel Savy, IML, 2008
Modal split: national transport
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Globalization and international transport
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Globalization and international transport
Optimised production MORE “transport” added value
incorporated than 20 years ago. Why?
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Globalization and international transport
Less expensive BUT: we pay MORE for “transport”
than 20 years ago. Why?
Transport
GDP
Trade
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Trade, Transport and International Logistics: An Introduction
1) Globalization
2) Role of transport
3) Role of logistics
4) Role of technologies
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Logistics in the supply chain
Source: “logistics management”, IML, Lausanne
Production
TransportInventory
LOGISTICS OPTIONS
Just-In-Time
Spatial organizationof collection and
distribution centres
Globalizationof production
Production
TransportInventory
LOGISTICS OPTIONS
Just-In-Time
Spatial organizationof collection and
distribution centres
Globalizationof production
Production
TransportInventory
LOGISTICS OPTIONS
Production
TransportInventory
Production
TransportInventory TransportInventory
LOGISTICS OPTIONS
Just-In-Time
Spatial organizationof collection and
distribution centres
Globalizationof production
Transport
Logistics
Supply Chain
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Logistics: consists of…
Transport Inventory holding Administration
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Logistics expenditure in USA, %
Source: CSCM – State of Logistics Report 2010Source: “”State of Logistics Report”, USA
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Waiting trucks at a border
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Globalization and International Logistics
Within global logistics expenditure,
• Warehousing and financing exp.
decreases
• Transport expenditure increases,
because
• More frequent deliveries, “Just in
Time” (JIT)
• Better quality services; secure, safe,
reliable
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Trade, Transport, Logistics and Technologies: An Introduction
1) Globalization
2) Role of transport
3) Role of logistics
4) Role of technologies
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Examples of technologies ?
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Technologies in international logistics
30 years ago:Containerization30 years ago:Containerization
Today:TelematicsToday:Telematics
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…Beirut
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…Suez Canal
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… China
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… Turkey
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…Maldives
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Anyhow: e.g. intermodal connections in Manzanillo, Mexico
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… Mekong River
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Zam
bia
… into Zambia
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Technologies in international logistics
30 years ago:Containerization30 years ago:Containerization
Today:TelematicsToday:Telematics
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Fuente: Michael Schwank, TOC Americas, 2004
Intercambio de datosInformation exchange
AutomatizaciónAutomatizaciónAutomation
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Port and other Transport Community Information Systems can help…
Planning for cargo handling operations Organizing onward transport Improving cargo security Tracing the status and location of cargo Communicating with other ports Preparing transport documents Customs clearance
… (trade facilitation: we will talk later about)
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Challenges affecting transport and trade of developing countries
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Challenges affecting transport and trade
A. Transport Costs and Access to Efficient Transport Services
B. Energy, Oil Price and Shipping Costs C. Environmental Sustainability of
Transport D. Climate Change Impacts and Adaptation
in Maritime Transport E. Security of the supply chain
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A. Transport Costs and Access to Efficient Transport Services
Efficient access to affordable, reliable and cost effective transport systems remain an imperative condition for trade competitiveness.
Maritime freight costs have fallen globally by around 15 % over the last 20 years, but remain high for many developing countries.
For LLDCs sea shipping accounts for about 8.7 % but with long land distances to ports, delays for border crossing, actual costs may be 2-3 times higher.
In many developing regions, transport infrastructure and services remain inadequate for an effective connectivity and efficient access to global markets.
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Average cost of transport by decade and regional groupings (% value of imports)
-
2.0
4.0
6.0
8.0
10.0
12.0
14.0
World 7.9 7.7 6.7
Developed Economies 7.4 7.3 6.4
Developing Economies 9.3 8.7 7.8
Developing Africa 12.3 12.1 10.6
Developing America 8.3 8.3 8.2
Developing Asia 8.9 8.4 7.4
Developing Oceania 11.6 12.0 9.5
LLDCs 11.6 11.4 8.7
1980s 1990s 2000s
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B. Energy, Oil Price and Shipping Costs Global trade expansion has been propelled by increasingly
efficient but heavily oil-dependent shipping transportation systems (80% of world trade) and not yet ready to use alternative fuel technologies.
Increases in oil prices raise the cost of shipping goods. A 10 % increase in Brent crude increases container freight rates by 1.9 - 3.6 % and tanker freight rates by 2.8% and iron ore by 10.5 %.
Over the past two years, the shipping industry has responded to rising fuel costs by adopting slow steaming. However, shippers see negative impacts on schedule reliability and service quality, which also raise transaction costs.
Sustained high oil prices will bring changes on trade flows and structure, production costs and on production plants location.
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C. Environmental Sustainability of Transport Freight transport is expected to grow with the growing world
population, and economic growth. Transport consumes more than half of global liquid fossil fuels and is expected to account for 97 per cent of the increase of oil use between 2007 and 2030.
Transport sector, including urban and private mobility, is responsible for nearly one quarter of global energy-related carbon dioxide (CO2) emissions and for 13 per cent of all world greenhouse gas (GHG).
Today, transport sustainability is ranking high on the global policy and governmental regulatory agendas, including when addressing the special needs of the LLDCs.
The transport industry is also including sustainability as part of environmental and social considerations in Corporate Social Responsibility (CSR) programmes.
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D. Climate Change Impacts and Adaptation in Maritime Transport
In relation to climate change, international transport, including shipping, is facing a dual challenge: to cut GHG emissions and to build its resilience in the face of factors such as sea level rise and extreme weather events.
Adaptation action in maritime transport requires re-thinking freight transport systems and integrating climate change into transport development investments design and planning.
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E. Security
Over the last decade, international and regional transport and supply chain security measures have been proliferating. Their effective implementation raises the cost of doing business and represents an important challenge for developing countries to remain part of international transport networks.
Maritime security measures include the IMO International Ship and Port Facility Security Code (ISPS Code) mandatory on 1 July 2004. Supply-chain security measures include the WCO Framework of Standards to Secure and Facilitate Global Trade (SAFE Framework) adopted in 2005.
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The use of ICTs in logistics, trade facilitation and supply chain security
ICTs have been in use in the Logistics services private industry for quite some time. ICTs in the Business to Governments (B2G or G2B) have only developed more recently bringing significant potential as key drivers for Trade Facilitation.
ICTs allow new types of controls such as the non-intrusive inspections of cargoes (container scanning), the provision of information prior to the arrival of the goods (pre-arrival data) and control based on risk analysis and automated selectivity.
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Trade, Transport, Logistics and Technologies: An Introduction
1) Globalization
2) Role of transport
3) Role of logistics
4) Role of technologies
5) Challenges for Developing Countries
Questions?