FREIGHT TRANSPORT RESEARCH IN AFRICA & ASIA

1. FREIGHT TRANSPORT RESEARCH IN AFRICA & ASIA John Hine

2. FREIGHT TRANSPORT Research TOPICS • Modelling Vehicle Operating Costs for Road Appraisal • Can time savings be used productively ? • Speed and fuel consumption • Vehicle maintenance costs • Examining the efficiency and constraints of national transport systems. • Reducing Empty Running • Comparative Transport Costs and Tariffs between Africa and Asia • Improving the efficiency of rural transport

3. Survey Procedures

4. Log LOADED Trips per Day = 0.97 -0.932 LOG Working Time per TRIP (The Elasticity Suggests Time savings would be Fully USED) – Pakistan travelling observer survey

5. Modelling vehicle operating COSTS IN Relation to Road Characteristics • Road Appraisal Models such as HDM4 and RED calculate vehicle operating costs as a function of road alignment, road width, traffic volume and road roughness. The models are used to estimate the benefits of upgrading earth and gravel roads to a paved bitumen standard. • The models predict vehicle speeds, fuel consumption and maintenance costs. Generally the smoother, wider and better aligned the road surface so the lower the operating costs. Speed is calculated by complex formula whereby the key limiting factor (gradient, curvature, roughness, traffic volume etc) determines the speed. Fuel is dependent on speed and gradient. Vehicle maintenance is dependent on road roughness.

6. FUEL CONSUMPTION Uses the ARFCOM model - an instantaneous model of engine power requirements which includes Tractive power to overcome resistance to motion Accessory power Internal engine resistance ACCELERATION NOISE Speeds in congested traffic conditions are not constant and speed variations need to be included in the fuel consumption model HDM4 (The Road Planning Model)The Calculation of Fuel Consumption

7. Light Vehicle Fuel Consumption in Indonesia: Observed to Predicted ARFCOM Results Observed Predicted

8. Medium Truck Fuel Consumption(Flat Straight Road in Indonesia) Estimated fuel consumption with congestion by ARFCOM/HDM4 HDMIII no congestion ARFCOM /HDM-4 no congestion

9. MAINTENANCE PARTS CONSUMPTION The most important component of road user costs The most 'variable' and most difficult to model Function of new vehicle price, vehicle age and road roughness HDM-4 relationships less sensitive to roughness Essential to calibrate MAINTENANCE LABOUR Dependent on parts consumption HDM-4

10. Observed and Predicted Vehicle Maintenance Costs- Articulated Truck Predicted Maintenance Costs Observed Vehicle Age

11. Transport Tariffs depend upon Distance, Mode and Road Surface: Evidence from Ethiopia

12. A study of Empty Running in china • In 1990s China had a high degree of empty running. This appeared to relate to a high level of own account operations in addition to a poorly developed system of commercial freight forwarding agents. • A study was carried out in Zhengzhou (at the cross roads of main east west and north south highways) in which 1024 truck drivers were interviewed. • Empty running data was compared with Pakistan and UK data and a ‘load matching’ analysis was carried out by computer. Potential savings were estimated at between 13 % and 19% of total distance travelled in the survey. • Overall with a better developed freight forwarding industry about 4% of total freight vehicle distance may be saved in China.

13. Empty Running in China and Pakistan

14. LOGISTICS PERFORMANCE INDEX : LPI The LPI is a set of indicators that measure perceptions of the logistics environment of 155 countries on several logistics dimensions. The survey uses an anonymous, web-based questionnaire and assess several logistics dimensions: • International transportation costs; • Domestic transportation costs; • Timeliness of shipments; • Traceability of shipments; • Transport and IT infrastructure; • Customs and other border procedures; and • Logistics competence.

15. TRANSPORT QUALITY IS LOW IN AFRICA : LPI October 2007

16. Transport Costs in Africa and Asia • Over the past 25 years there have been at least five major comparative studies of transport costs in Africa and Asia • The studies confirm that transport tariffs in Africa, for comparable journeys are many times higher than in Africa than in Asia • However there are differences in the reasons behind the higher costs: earlier studies emphasised cost factors while the latest study by the World Bank (2009) puts more emphasis on very high profits.

17. TRANSPORT COSTS IN AFRICA & ASIA: Main Sources TRL Study on Pakistan, INRETS & LET, Francophone Africa. See: A comparison of the costs and productivity of road freight transport in Africa and Pakistan. Transport Reviews, Vol 13, No.2, Rizet & Hine, 1993 A Comparison of Freight Transport Operations in Tanzania and Indonesia,1997. TRL Report 267. J Hine, J. Ebden and P Swan) The transition from non-motorised to motorised modes of transport. 7th World Conference on Transport Research, Sydney, 1995( S. Ellis & J. Hine). : Transport Prices and Costs in Africa: A review of the International Corridors. By S. Teravaninthorn and G. Raballand. World bank 2009

18. Comparison of Long Distance Tariffs: US$ per ton km, 1988

19. Tariff Comparison Tariff(1988 US cents/tonne/km) 50 Cameroon 40 Ivory Coast 30 20 Mali 10 Pakistan 0.2 0.5 1 2 5 10 20 50 Thousand tonne km per trip

20. Africa Pakistan Taxes: with without with without New vehicle 39,710 33,093 154,500 123,300 758 Tyre 425 224 169 0.27 0.50 0.24 Diesel (US$/L) 0.74 Annual costs : Crew 4,888 4,888 4,103 4,103 Veh. Insurance 8 1,751 8 1,432 Goods insurance 839 1,028 - - Licenses and taxes - 1,361 - 145 INPUT COSTS (1988 US$)

21. FREIGHT TRANSPORT COSTS Africa Pakistan Design Payload tons 25 13 Mean Payload tons 32 26 Empty running % 34 12 Annual travel km 50,000 123,000 US cents per km Depreciation, Interest 35.5 4.0 Fuel 39.4 13.2 Maintenance 32.0 5.2 Tyres 16.9 1.8 Crew 9.8 3.3 Insurance 5.6 0.006 Taxes, Overheads 17.5 1.0 Police, Agents Fees 6.1 2.4 Total costs per km 162.6 31.0 Total costs per ton km 7.6 1.4

22. Tariffs per ton/km 1995 prices

23. Component price US$, 1995

24. Different modes of transport • Many factories in Thailand produce the Etan farm vehicle out second hand parts. They can give low transport costs for small loads travelling short and medium distances. • The power tiller (or single axle tractor) is now an important means of transport, particularly in rural Asia. • Both of these vehicles may not be licensed to operate in Africa.

25. Comparison of operating tariffs 1995 for local rural transport vehicles

26. Vehicle utilisation:local transport vehicles

27. TRANSPORT TARIFFS US$ Per Ton Km 2007 (World Bank Study )

28. Estimated Costs from 2007 Study

29. High Transport Costs In Africa Earlier Studies Stressed: High initial input prices for vehicles, fuel, parts Exclusive dealerships, low demand Poor driver knowledge of vehicle maintenance Unnecessary fast driving speeds Poor road surfaces Little competition, particularly on rural routes Low utilisation caused by low density of demand and operation of operator cartels

30. High Transport Costs In Africa - 2 Later studies emphasised: • Most vehicles are imported second hand • Low utilisation of vehicles • High barrier costs on international routes • Super profits being made by operators • The presence of cartels preventing competition

31. Pakistan – a Model for Success ? • One of the most efficient freight transport systems in the world • Large network of freight forwarding agents • individually owned • 25% general merchandise • 75% specialist consignments e.g. quarried materials, iron, steel • ⅓ of consignments were “smalls” (< one ton) Credit: TRL Limited

32. FREIGHT AGENT

33. FACTORS PROMOTING LOW COST TRANSPORT IN PAKISTAN - OPERATIONAL • On-the-job training for drivers • Drivers given a lot of responsibility • Continuous vehicle maintenance practiced • Two drivers per vehicle achieve high utilization • Oil changed frequently • Slow driving speeds

34. FACTORS PROMOTING LOW COST TRANSPORT IN PAKISTAN - ORGANISATIONAL • Very competitive free market • Little government regulation • Efficient network of forwarding agents • Low initial vehicle prices • Many cheap parts made locally • Many good local workshops • High Density of Demand

35. DENSITY OF DEMAND : GPD pER SQ KM in 2011

36. Ghana . GPRTU 1. About 70% of transport operators belong to the GPRTU (Ghana Private Road Transport Union of the TUC). The Union runs most of the truck and bus parks in the country. It also enforces passenger fares. A queuing system is enforced by the truck and bus parks. Operators are assigned to certain routes. Customers are directed to the first vehicle in the queue, which will move once the vehicle is full. Freight drivers can queue for two weeks to get a load. There are a number of large bus companies that operate in urban and interurban routes, however virtually all rural and freight transport is run by informal small scale operators.

37. Ghana -GPRTU 2. The union tries to assist members in various ways. Michel Delaquis’ study found that they would help long serving drivers become owners operators through advancing loans. It is possible for freight operators to bypass the queuing system and visit factories, etc, for loads on spec. Although ‘fines’ have sometimes been imposed for doing this. Freight Transport Tariffs are very high. A recent study found transporting an import container from Accra to Ougadougou was $4,800 compared with $654 between Newark and Chicago, (i.e. 7 times for a similar distance). An export container cost 2.5 times as much.

38. Malawi Transport Costs • A recent study by the World Bank found a 20 fold difference in transport charges between transport of tobacco between local towns and city compared with the charges for international transport to export ports. • The main reasons identified were a combination of infrastructure issues, and segmented markets preventing competition. • It was suggested that larger trucks would find it difficult to operate on rural roads, and there was likely to be higher empty running on shorter trips.

39. Malawi Transport Costs for Tobacco Explaining High Transport Costs within Malawi - Bad Roads or Lack of Trucking Competition? Policy Research Working Paper 5133, Somik V. Lall, Hyoung Wang, Thomas Munthali– World Bank, 2009

40. A Comparison of Transport Operations in Cameroon The Mayor of Ngoundere District in Northern Cameroon decided to address the issue of poor transport services and high tariffs. Substantial results followed. A comparison was made by surveys between Ngoundere and two other Districts in the South Cameroon

41. Second surveys First surveys around Buea

42. Characteristics of Transport in Southern Cameroon Transport operations are organised by syndicates The syndicate determines fares and routes The drivers wait in line and only leave when they are full The syndicate negotiates with the mayor for access and fees for the terminal The vehicles tend to be small (taxis), overloaded and in poor condition

43. Will this provide a good service?

44. Transport Characteristics in Northern Cameroon There are a number of travel agencies operating in competition with each other The mayor has granted licenses for these travel agencies to operate out of individual terminals in the town The operations are professional and regular The vehicles are clean, well maintained and large 30 seaters

45. Kwatal Travel Agency

46. Impact of these differences on the customer In the North passenger fares dropped by 50% in 2 years as competition increased In the North customers had a safer and more comfortable ride Greater service frequency to rural areas Customer/user becomes the focus The price of transport is dramatically lower in the North than the South

48. Cameroon Study Policy Implications Support of a more competitive environment can have a large pay off. In these cases infrastructure was not an issue - if anything the quality of infrastructure was worse in the North. When transport is provided as it is in the North it is possible to start thinking about introducing subsidy on remote and economically unviable routes.

49. Further research papers are available on the TRL transport-links website: . http://www.transport-links.org/transport_links/index.asp