Cambodia Trade Corridor Performance Assessment
The study found that logistics costs are high due to transshipment costs and various forms of payments. Many of these payments are imposed by the private sector with little or no transparency on how or where the costs are incurred. International tr...
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| Format: | Foreign Trade, FDI, and Capital Flows Study |
| Language: | English en_US |
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Phnom Penh
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2014/04/20271908/corridor-performance-assessment-trade-development-report http://hdl.handle.net/10986/20763 |
| Summary: | The study found that logistics costs are
high due to transshipment costs and various forms of
payments. Many of these payments are imposed by the private
sector with little or no transparency on how or where the
costs are incurred. International trade corridors in
Cambodia therefore perform well in terms of time but not
cost. However, the corridors with transshipment have higher
costs than the national corridor between Phnom Penh and
Sihanoukville or the river corridor to the port of Cai Mep
in Vietnam. Large shippers and international firms prefer to
use several sub-contractors to make logistics arrangements
so they do not have to coordinate what can be fairly complex
and challenging arrangements for shipments. Intermediation
in logistics is largely carried out by local agencies,
leading to high intermediation costs. The main reason for
the high intermediation cost is the prevalence and wide
acceptance of facilitation fees as inducements for fast
clearance and processing. Facilitation fees, largely
informal, contribute to the high costs of logistics.
Intermediaries, mostly forwarders and brokers, play a key
role in collecting these payments. However, payment of such
fees is clouded by lack of transparency. One of the main
challenges is how to deal with informal payments in
logistics in Cambodia. Another contributor to high costs is
private sector capacity in the provision of logistics
services, which is still low. Most of the truck fl eet is
operated by family-run businesses owning a few trucks.
Trucks are generally old which contributes also to the lack
of appetite to operate across borders and at the same time
compromises the feasibility of developing an effective
transit system. |
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