Transport Costs and Prices in Lao PDR : Unlocking the Potential of an Idle Fleet
The cost of transport in Lao PDR is said to be higher than in neighboring countries, affectingthe competitiveness of producers and shippers alike. However, the picture appears to be morenuanced. Since there has not been much hard evidence to suppor...
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| Format: | Report |
| Language: | English |
| Published: |
World Bank, Washington, DC
2018
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| Online Access: | http://documents.worldbank.org/curated/en/469191543240299696/Transport-Costs-and-Prices-in-Lao-PDR-Unlocking-the-Potential-of-an-Idle-Fleet http://hdl.handle.net/10986/31015 |
| Summary: | The cost of transport in Lao PDR is said
to be higher than in neighboring countries, affectingthe
competitiveness of producers and shippers alike. However,
the picture appears to be morenuanced. Since there has not
been much hard evidence to support this claim, this paper
fills thegap by empirically investigating transport costs
and prices for domestic routes in Lao PDR andidentifies the
key drivers behind transport costs. The transport sector in
Lao PDR can be describedas thin, consisting of a dozen large
players (defined as having a fleet size of more than 50
trucks) and many small firms (companies with less than 5
trucks or owner-operators). Many of the micro firms work in
the informal sector. Productivity levels in the Lao
transport sector are generally very low. Across the study
sample, the average annual distance driven per truck is only
55,000 km which is very low, though comparable to other
landlocked, developing countries. Transport costs are on
average LAK 489 per ton-km (equivalent to USD 0.06 per
ton-km). A large majority of transport companies operate
within a band of LAK 230 (USD 0.028) and LAK 575 (USD 0.07),
of which variable costs make up 62 percent. Smaller firms
tend to be less efficient than larger ones in spite of their
much smaller overhead costs. The 25 percent cost advantage
per ton-km of informal firms is offset by the economies of
scale of larger firms that operate newer and larger trucks. |
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