TRUCKING TO WEST AFRICA’S LANDLOCKED …...landlocked countries, in order to draw conclusions and make recommendations to policy makers, the private sector and donors. Methodology

TRUCKING TO WEST AFRICA’S LANDLOCKED COUNTRIES

2

TRUCKING TO WEST AFRICA’S LANDLOCKED COUNTRIES:

MARKET STRUCTURE AND CONDUCT Trade Hub Technical Report No. 32 DISCLAIMER The authors’ views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government.


3

TABLE OF CONTENTS

TABLE OF CONTENTS ........................................................................................................ 3

LIST OF FIGURES ................................................................................................................ 4

LIST OF TABLES ................................................................................................................ 5

ACRONYMS AND ABBREVIATIONS .................................................................................... 6

EXECUTIVE SUMMARY ....................................................................................................... 7

I INTRODUCTION .............................................................................................................. 11

I-1 Context and objective .................................................................................................. 11

I-2 Methodology and structure ........................................................................................... 12

I-3 Landlocked-country corridors ....................................................................................... 13

I-4 West African ports serving landlocked countries ........................................................... 13

II TRUCKING COSTS ......................................................................................................... 16

II-1 Road-transport costs ................................................................................................... 16

II-2 Trucking-cost structure................................................................................................ 17

III TRUCKING PROFITABILITY ........................................................................................... 19

III-1 T&R’s perspective ...................................................................................................... 19

III-2 Case studies .............................................................................................................. 19

III-3 Interview results ......................................................................................................... 21

III-4 Analysis ................................................................................................................ 22

IV THE STRUCTURE AND CONDUCT OF THE MARKET FOR TRUCKING ....................... 26

IV-1 Supply response to the demand for trucking capacity................................................. 26

IV-1-1 T&R’s perspective ............................................................................................. 26

IV-1-2 Interview results ................................................................................................ 26

IV-1-3 Conclusion ........................................................................................................ 29

IV-2 Freight-sharing rules .................................................................................................. 30



IV-2-3 Conclusion on the implementation of the freight-sharing rules............................ 33

IV-3 The queuing system for loading trucks ....................................................................... 34


IV-3-2 Interview results: ............................................................................................... 34

IV-3-3 Conclusion on the implementation of the queuing system .................................. 36

IV-4 Are the transport prices freely determined by the market? .......................................... 37



IV-4-3 Conclusion on the existence of a free trucking market ....................................... 39

V CONCLUSIONS AND RECOMMENDATIONS ................................................................. 41

V–1 Conclusions ............................................................................................................... 41


4

V–1-1 Introduction ....................................................................................................... 41

V-1-2 Market distortions ............................................................................................... 42

V-1-3 Case study: Niger............................................................................................... 45

V-1-4 The importance of the small-scale, informal-sector trucker .................................. 45

V-1-5 Perceptions and change ..................................................................................... 45

V-1-6 Degrees of oligopoly and constraints to the effectiveness of transport and

transit facilitation ................................................................................................... 46

V-2 Recommendations ..................................................................................................... 48

VI FURTHER STUDIES ...................................................................................................... 49

APPENDICES 51

Appendix 1: Terms of reference ................................................................................... 51

Appendix 2: Summary of Supee Teravaninthorn & Gaël Raballand’s 2008 World Bank

report ―Transport prices and costs in Africa: a review of the main

international corridors‖ .............................................................................. 53

Appendix 3: Questionnaire for transport operators’ interviews ...................................... 55

Appendix 4: Data-collection sheets for financial and technical details of operating trucks

................................................................................................................ 62

Appendix 5: Calculation of trucking operating costs...................................................... 64

LIST OF FIGURES

Figure 1: Map showing Dakar-Niamey trans-Sahel highway, trans-coastal Abidjan-Lagos highway and the 11 port-to-Sahel transit routes ................................................................... 13

Figure 2: Maritime transit for Mali......................................................................................... 14

Figure 3: Maritime transit for Burkina Faso .......................................................................... 14

Figure 4: Maritime transit traffic for Niger ............................................................................. 15

Figure 5: Cotonou/Lomé-Niamey: 35T capacity; various nationalities: costs as % of total .... 18

Figure 6: Abidjan-Bamako: trucking prices vs. cost .............................................................. 20

Figure 7: Cotonou-Niamey, Benin trucker: transport price vs. cost ....................................... 20

Figure 8: Cotonou-Niamey, Niger trucker: transport price vs. cost ........................................ 20

Figure 9: Cotonou-Niamey, Togo trucker: transport price vs. cost ........................................ 20

Figure 10: Niamey: 2nd-hand truck, 25T capacity; informal sector: costs as % of total ......... 69

Figure 11: Cotonou-Niamey: 2nd-hand truck, 25T capacity; formal sector: cost as % of total 69

Figure 12: Cotonou/Lomé-Niamey: 35T capacity; various nationalities: costs as % of total ... 69

Figure 13: Abidjan-Bamako; 47T capacity: costs as % of total.............................................. 69


5

LIST OF TABLES

Table 1: No of corridors applying quantitative controls to different degrees ............................ 9

Table 2: Elements of delay on a round trip to Bamako (days) ............................................... 17

Table 3: International transport prices, costs and profit margins ........................................... 19

Table 4: Opinions about whether truckers make a profit ....................................................... 21

Table 5: Opinions about whether an oversupply of trucks exists ........................................... 26

Table 6: Opinions about whether the 1/3-2/3 freight-sharing rule applies .............................. 30

Table 7: Summary of implementation of freight-sharing rules ............................................... 33

Table 8: Opinions about whether the queuing system applies .............................................. 34

Table 9: Responses to whether the free market determines trucking prices ......................... 37

Table 10: Application of non-market allocation mechanisms for transit trucking by corridor... 43

Table III-1: Corridor: Lomé-Niamey ...................................................................................... 64

Table III-2: Corridor: Cotonou-Niamey ................................................................................. 65

Table III-3: Vehicle operation costs in 2007 ......................................................................... 66

Table III-4: Estimation du côut d'exploitation ........................................................................ 67


6

ACRONYMS AND ABBREVIATIONS

CBC Conseil Burkinabé des Chargeurs (Burkina Faso Shippers’ Council)

CCI-CI Chambre de Commerce et d’Industrie de Côte d’Ivoire (Côte d’Ivoire Chamber of Commerce)

CCIB Chambre de Commerce et de l’Industrie du Benin (Benin Chamber of Commerce)

CFA franc/FCFA Communauté financière d’Afrique franc, the common currency in UEMOA member countries, pegged to the euro at € 1.00 = 655.957 FCFA (USD 1.00 = approx. 455 FCFA during the field work for this study.)

CNTR Coordination Nationale des Transporteurs Routiers du Mali (Mali National Road Transporters’ Union)

CNUT Conseil Nigérien des Utilisateurs des Transports (Niger Shippers’ Council)

CTGFR Comité Transitoire de Gestion du Fret Routier (Interim Committee for Management of Road Freight, Benin)

DGTT Direction Générale des Transports Terrestres (Benin) Directorate General for Land Transport

DTRF Direction des Transports Routier et Ferroviaire (Department of Road and Rail Transport)

ECOWAS Economic Community of West African States

FIFO ―first in, first out‖ rule

GHTDA Ghana Haulage Transport Drivers’ Association

IST Inter-State Road Transportation Convention

OIC Office Ivoirien des Chargeurs (Ivorian Shippers’ Council)

OFT Observatoire de la Fluidité des Transports (Transport efficiency information system)

T/tonne metric ton = 1,000 kilogrammes

T&R Supee Teravaninthorn & Gaël Raballand, World Bank report 2008

UEMOA Union Economique et Monétaire Ouest Africaine (also WAEMU – West African Economic and Monetary Union)

UNATROT Union National des Transporteurs Routiers du Togo (National Union of Carriers in Togo)


7

EXECUTIVE SUMMARY

Sahelian landlocked countries—Mali, Burkina Faso and Niger—suffer from high costs of road

haulage due to long distances to ports, poor roads, unroadworthy trucks, poor logistics and

corruption. High costs limit the competitiveness of their transit trade through West Africa’s

ports. The resulting low volumes of trade limit their prospects for economic development and

thus limit growth in employment and incomes.

A 2008 World Bank report by Teravaninthorn & Raballand (T&R), Transport Prices and Costs

in Africa: a Review of the Main International Corridors, makes even more gloomy reading.1

T&R find that the transport of freight between Sahelian countries and their ports, and thus the

world market, features prices that significantly exceed the underlying costs. This finding

suggests large profits, which T&R attribute to rent-seeking road-transport cartels benefitting

from oligopolies. T&R argue that, unless governments take steps to remove the structural

distortions of the trucking market, there is no point in investing to reduce road-transport costs

because the cartels will capture the benefits from lowered costs: prices will remain the same

and cartel members will benefit from higher profits. If true, this represents a fundamental

constraint to the economic development of three of the poorest countries in the world.

Aim

In the light of T&R’s findings, the purpose of this study is to document and analyze trucking

procedures along a sample of the transit corridors linking the ports to destinations in the

landlocked countries, in order to draw conclusions and make recommendations to policy

makers, the private sector and donors.

Methodology

Research took place in the third quarter of 2009. Desk research preceded interviews with key

informants from the private and public sectors in the ports of Abidjan, Tema, Lomé and

Cotonou through which Sahel-bound transit freight from the world market passes en route to

the landlocked countries. The research concerned 11 transit corridors between the four ports

and three Sahelian countries (except Abidjan-Niger).

Summary of findings

The study finds that Malian, Burkinabe and Nigerien transit oligopolies exist, but unevenly

across corridors. Although some corridors, particularly those leading to Niger, suffered from

exactly the problems T&R describe, in other cases, particularly corridors emanating from

Abidjan and Tema, the problems had limited impact. Nonetheless, on all corridors the

oligopolies operate at least partially, limiting the benefits from cost-reducing investment and

serving as an unnecessary brake on the rate of growth of exports from, and imports to, the

Sahelian countries. Regional organizations and governments should prioritize removing

them. They should also simultaneously change other regulations that underpin the

oligopolies.

Detailed findings

The main legal basis for the oligopolies lies in one of two Economic Community of West

African States (ECOWAS) treaties of 1982 laying down the regional approach to transport

and transit activities: the Inter-State Road Transportation (IST) Convention. All ECOWAS

member states are IST signatories. The convention allows pairs of member states (one

coastal, one landlocked) to enter into bilateral treaties regulating the sharing of transport

rights for imported transit goods from the port to the destination in the landlocked country.

1 Supee Teravaninthorn and Gaël Raballand, ―Transport Prices and Costs in Africa: a Review of the Main

International Corridors‖ (Washington D.C.: World Bank, 2008). Hereafter cited as T&R.


8

These ―freight-sharing ‖ treaties seem all to have (a) reserved the haulage of all freight

defined by the destination country as ―strategic‖ to trucks registered in the country of

destination and (b) allocated 1/3 of ―non-strategic‖ freight to the coastal country and 2/3 to the

landlocked country. The underlying goal is a fair allocation of lucrative transit freight from port

to Sahelian country. However, this fixed division of the spoils limits the competition that would

otherwise take place. In practice, Sahelian countries’ fleets are generally less roadworthy than

coastal countries’ fleets, so these northbound allocations are skewed against technical

efficiency. Sahelian countries’ shippers’ councils oversee the application of these rules.

Moreover, each country’s truckers’ association allocates its fraction of the ―non-strategic‖

haulage rights using a ―first come, first served‖ queuing system: each trucker registers when

he arrives at the port and waits for his turn to carry a load north, creating the conditions for

cartels. In each case the result is a second oligopoly that also limits competition: roadworthy

trucks must endure the same waits—sometimes of weeks—as the unroadworthy to get a

load, whereas allocation by the market would favor the roadworthy over the unroadworthy.

Better trucks—capable of delivering goods more quickly and with less uncertainty—get no

more freight, which provides no incentive for investment in a technically superior fleet. In

contrast, incentives clearly exist for the organizations running these allocation systems to

become oligopolistic bureaucracies that derive revenue from a share of the trucking receipts

and to take bribes to allow trucks to jump the queue.

This double oligopoly is the feature that most observers mention when discussing transit-

trade trucking inefficiencies, but there are others.

First, national security ostensibly justifies limiting the haulage of ―strategic‖ goods from port to

Sahel to trucks registered in the country of destination. However, some such goods appear

not to fall into this category (e.g. building materials), suggesting that interest groups have

broadened this category principally to provide economic protection to the trucking sector

within their country.

Second, if there are not enough trucks from the landlocked country in the port, the landlocked

country’s transporters’ association sells the right to carry the northbound freight to a trucker

with a truck registered in another country. This sale adds no value to the importer but boosts

his transport bill, which is ultimately borne by end users of the imported goods.

Third, for southbound exports from Sahelian countries to the port (destined for the world

market), transporters’ associations in each landlocked country enforce a ban on trucks

registered in other countries picking up loads in that country. The Sahelian exporter can only

choose from among trucks registered in that country. This protectionist, non-market allocation

of freight lowers the average efficiency of southbound road haulage along that corridor. It also

dissuades trucks registered elsewhere from carrying loads to landlocked countries because—

without a backhaul load—their profits are lower. Alternatively, in some landlocked countries,

the transporters’ association may allow trucks registered in another country to pick up a

southbound load for a fee, which increases the haulage cost to the end user, without

providing any extra added value to such user. This fee contributes to high average haulage

rates that render uncompetitive (a) exporting from the Sahelian countries and (b) production

using imported inputs.

This set of misguided arrangements frustrates the creation of a flexible region-wide market for

trucking and increases the prices along already high-cost trucking corridors, which are paid

for by the Sahelian countries, among the poorest in the world. Their consumers pay higher

prices for imported goods. Their industries, producing import substitutes using imported

intermediate goods, find their final products uncompetitive against imports. Aspiring exporters

to the global economy immediately face a huge competitive disadvantage due to the


9

additional transport costs that the double oligopoly generates for them. Thus raised costs and

lowered efficiency severely limit economic development in the Sahelian countries.

Table 1: No of corridors applying

quantitative controls to different degrees

However, there is some cause for hope.

First, this study finds trucking profits on transit corridors to be reasonable: around 20%, rather than the 80% that T&R suggest.

Second, it finds that enterprising truckers and freight forwarders already resist the oligopolistic and bureaucratic strictures. In different degrees, varying by port and destination, they seek directly negotiated alternatives. The adjacent table shows the number of corridors on which the two oligopolies are implemented. Although some corridors, particularly those leading to Niger, faced exactly the problems T&R describe, in other cases, particularly corridors emanating from Abidjan and Tema, the problems had more limited impact.

Third, a freight forwarder can refuse an unroadworthy vehicle that the ―first come, first served‖ rule allocates to him, redressing the advantage that this system offers to unroadworthy trucks. However, with so many low-quality trucks, in practice the forwarder’s scope for choosing a better-quality vehicle is severely limited.

Fourth, although the formal sector accounts for only an estimated 10% of all truckers, by contracting directly with importers it is largely able to bypass quotas and queues. Similarly, Sahelian importers with their own trucks can load their cargoes without queuing, avoiding much of the inefficiency described.

No. of corridors applying quanti-

tative controls to different degrees

Degree of

application

Quotas

(1/3-2/3)

Queuing:

“first

come, first

served”

Fully 2 3

Partially 1 4

Scarcely 4

Uncertain 2

Not applied 6

Total 11 11

Case study: Niger

Niger provides an archetypal example. Its institutions are keenest on non-market

allocation of transit goods. In the ports of Cotonou and Lomé, the Conseil

Nigérien des Utilisateurs des Transports Publics (CNUT), Niger’s shippers’

council, rigorously enforces the 1/3-2/3 quota system and the queuing rule

thereby protecting Niger’s old trucking fleet, which is too small to take full

advantage of its rights under the quota system and less efficient than the fleets of

Benin or Togo. It collects fees from trucks registered outside Niger for each load

in its 2/3 share that Nigerien trucks cannot carry. In Cotonou, Benin truckers can

undercut Nigerien truckers but they cannot win extra market share by doing so

because they are limited to their maximum 1/3 share of the market. Nigerien

truckers have no incentive to increase the size or efficiency of their fleet or to

reduce their rates, as they would under competition. Further, within Niger, the

transporters’ associations charge fees to non-Nigeriens who want to haul freight

within or from Niger. The net effect is that Nigerien consumers of imported goods

and manufacturers using imported inputs face higher prices and Nigerien

exporters have greater difficulty exporting to the world market than they otherwise

would.


10

Recommendations

The study finds that blatant inefficiencies, stemming from the transit oligopolies that T&R

identified, remain in place, undermining the benefits from investments made to reduce the

cost of trucking along these corridors. The oligopolies constitute an unnecessary brake on

the rate of growth of exports from, and imports to, the Sahelian countries and they hinder

regional integration. The study recommends that they should be dismantled. To achieve this,

pairs of countries could renegotiate their agreements under IST piecemeal. However, revision

of ECOWAS’ Inter-State Transportation Convention would more efficiently liberate West

African trucking.

The corridors linking Cotonou and Lomé to Niamey, where the oligopoly is strong, urgently

require the disbandment or reorientation of the institutions underpinning the oligopoly. The

other nine corridors studied have weaker oligopolies and, in at least some of these cases, it

would seem possible to pursue dismantling the oligopolies at the same time as pursuing other

transport and transit facilitation activities—the risk of the oligopolies swallowing the benefits

from the other activities is smaller. These other policies could include harmonization and

simplification of customs procedures and documents, the construction of joint border facilities

and the implementation of ECOWAS’ transport and transit facilitation strategy.


11

I INTRODUCTION

I-1 Context and objective

Two World Bank researchers, Supee Teravaninthorn & Gaël Raballand (T&R) published a

2008 report, Transport Prices and Costs in Africa: a Review of the Main International

Corridors, which raised concerns that donors and governments in West Africa have missed

the most important problem in increasing trucking efficiency. Based on data gathered in

2007, T&R assert that West African trucking costs do not greatly exceed global norms but that

end users of trucking services pay prices exceeding those costs by a margin that suggests

rent-seeking. They explain how cartels perpetrate restrictive practices. They identify the

cause of the observed inefficiency as a set of freight-sharing rules between coastal and

Sahelian countries in West Africa, coupled with freight bureaus that allocate freight to trucks

using a queuing system that circumvents direct contracting between shippers and trucking

firms. The consequences are a lack of trucking competitiveness, higher prices, reduced

trucking efficiency which lower the quality of trucking services offered.

The monopoly on the allocation of freight has several negative effects. First, it provides an

incentive for older, poorly maintained trucks to remain in service because they only have to

wait at the port like their competitors to get a cargo. In a more competitive environment,

newer, better maintained trucks would outcompete them, but the queuing system puts them

on an equal footing with their rivals. In this context, modern, well maintained trucks cannot

realize their potential. Second, the incentive for older, poorly maintained trucks to remain

economically active results in an oversupply of trucks on the market. Without this support,

owners would scrap them. Third, the oversupply and increased waiting times at the port

extend the rotation times between the port and the Sahelian destination. The additional

downtime reduces the distance covered annually and thus trucking efficiency. Fourth, to

counter the low distance covered annually, firms tend to overload their trucks. Old, poorly

maintained, overloaded trucks have a greater propensity to break down, have accidents,

pollute and—most importantly—degrade the roads. The slow, irregular progress of these

trucks yields a poor service to shippers. Accidents, pollution and road degradation are

negative externalities, sometimes with very high social cost. Fifth, the queuing process

encourages bribery in order to skip the queue; and overloading and contravention of road-

safety regulations leave drivers open to extortion by the police.

The system is self-perpetuating through a set of informal-sector incentives. Drivers pay

bribes to agents of the organizations overseeing the monopoly to allow their trucks to jump

the queue. The shipper benefits from the extra tonnes of freight loaded beyond legal limits

but not declared to customs at the border between the coastal and landlocked country. He

rewards the shipping agent accordingly. The shipping agent gives additional cash incentives

to the truck driver who, in turn, pays bribes to police and customs officers to ensure that the

overloaded truck and the under-declared cargo reach their destination without detention or

official fines. Trucking-company staff ignores overloading if it does not significantly damage

the truck.

The West African system generates prices to end users of transport services that significantly

exceed costs. T&R argue that, without increased competition, any improvements to transport

infrastructure will not result in lowered prices but rather in increased profits to the parties

involved. This is tantamount to suggesting that investment for improved transport

infrastructure and transit facilitation, worth millions of dollars annually from the budgets of

African governments and donors, is achieving nothing.


12

T&R’s report on trucking in sub-Saharan Africa is the point of departure for the current study.

Its purpose is to revisit their findings for West Africa alone, two years later. During those two

years the world has undergone an economic recession and parts of the West African trucking

market have undergone a minor revolution in the form of relatively strict application of axle-

weight limits. The current study looks at some of the institutional factors in detail and

examines a greater number of trucking corridors, searching for diversity between them. It

uses a less quantitative methodology than T&R based on interviews with key informants—see

below.

I-2 Methodology and structure

Research took place in the third quarter of 2009. Initial desk research consisted of collection

and analysis of official documents, recent studies, workshop proceedings and reports dealing

with road prices and costs in West Africa. The consultant conducted standardized interviews

with the representatives of the main public- and private-sector operators in selected West

African ports (Tema, Ghana; Lomé, Togo; Cotonou, Benin; and Abidjan, Côte d’Ivoire) about

corridors from these four ports to Burkina Faso, Mali and Niger (with the exception of the

Abidjan-Niger corridor). In most cases, the reference point in the Sahelian country was the

capital city, respectively: Ouagadougou, Bamako and Niamey. The consultant interviewed a

total of 42 persons (forwarders, representatives of shippers’ councils and transporters’

associations, informal- and formal-sector transporters, and officials in charge of road-transport

policy in ministries of transport). Most of the private-sector respondents came from the

informal sector, which represents the majority of West Africa’s trucking capacity. Appendix 3

shows the questionnaire used. Lastly, the consultant analysed case studies of the operating

costs and financial profitability of specific trips on some corridors. (See Appendix 5—

Calculation of trucking operating costs.)

This section continues with context on the corridors under study (I-3). Section II explains the

costs of trucking in West Africa and Section III considers its profitability. Section IV provides a

detailed assessment of the trucking market: the supply of trucks relative to demand, freight-

sharing rules, the queuing system and the extent to which the market allocates resources.

Section V summarizes the conclusions and makes recommendations.

During the research period, the exchange rate for the CFA franc was approximately USD 1.00

= 455 CFA francs.


13

I-3 Landlocked-country corridors

The regional road infrastructure in West Africa comprises:

the trans-Sahel highway, from Dakar to Niamey via Bamako and Ouagadougou

the trans-coastal highway, from Lagos to Abidjan

the interlinking corridors between the two highways originating from each port.

Figure 1: Map showing Dakar-Niamey trans-Sahel highway, trans-coastal Abidjan-

Lagos highway and the 11 port-to-Sahel transit routes

This study focuses on the corridors linking Abidjan, Tema, Lomé and Cotonou to Bamako,

Ouagadougou and Niamey (with the exception of Abidjan-Niamey).

I-4 West African ports serving landlocked countries

Figures 2-4 show the trends in the throughput of goods imported via West African ports to

Mali, Burkina Faso and Niger respectively. They show the proportion of imports supplied

through Abidjan, Tema, Lomé and Cotonou (the ports discussed in this report), as well as

three others: Dakar, Senegal; Conakry, Guinea; and Takoradi, Ghana. Over the years

shown, the four ports studied in this report handled the majority of Mali-bound freight and the

quasi-totality of the freight destined for Burkina Faso and Mali. Thus, in covering corridors

emanating from Abidjan, Tema, Lomé and Cotonou, this report effectively covers most of the

central part of West Africa.


14

Figure 2: Maritime transit for Mali

Figure 3: Maritime transit for Burkina Faso

Maritime Transit for Burkina Faso

0

200 000

400 000

600 000

800 000

1 000 000

1 200 000

1 400 000

1 600 000

1 800 000

1998 1999 2000 2001 2002 2003 2004 2005 2006

Abidjan Takoradi Tema Lomé Cotonou

Maritime Transit for Mali

0

200 000

400 000

600 000

800 000

1 000 000

1 200 000

1 400 000

1 600 000

1998 1999 2000 2001 2002 2003 2004 2005 2006

Dakar Conakry Abidjan Takoradi Tema Lomé Cotonou


15

Figure 4: Maritime transit traffic for Niger

Maritime Transit Traffic for Niger

0

200 000

400 000

600 000

800 000

1 000 000

1 200 000

1 400 000

1 600 000

1 800 000

1998 1999 2000 2001 2002 2003 2004 2005 2006

Abidjan Takoradi Tema Lomé Cotonou


16

II TRUCKING COSTS

II-1 Road-transport costs

Transport prices for delivery from the port to the capital city of most African landlocked countries range from 15 to 20% of import costs, a figure three to four times greater than in most developed countries. In addition to the issues of market distortions that chiefly concern this study, key factors explaining these high transport prices are:

distances of the order of 1,000 km from port to landlocked capital city

low productivity of the trucking industry in much of Africa. Infrastructure that is at best adequate, combined with numerous physical and non-physical barriers and a low capacity use (with a high proportion of trucks running empty back to the port because of a structural trade deficit of the landlocked countries).

The mileage covered per month gives a good indication of capacity usage. The average monthly distance covered by trucks in Africa, based on various sources, is:

11,000–12,000 km for domestic transport within South Africa

8,000–9,000 km per month in regional Southern Africa (for instance South Africa to

Zambia through Zimbabwe)

5,500 km per month in Eastern Africa

2,500 km at best for trucks destined for Mali and Niger (according to clearing and

forwarding agents).

These figures show clearly the low productivity of West African trucking, which is due to

delays at various stages: terminal time in ports and at the inland destination border crossings,

numerous road-checkpoint controls en route by police, customs and the gendarmerie, and

idle time before reloading or getting return cargo, when a return load exists.

As an example of the delays that contribute to the long turnaround time, Table 2 shows a

breakdown of how a typical truck spends its time on a round trip to Bamako from five ports,

according to clearing and forwarding agents. In all five cases the time spent driving is less

than a quarter of the total journey time.

Various regional and national projects address the quality of the roads and facilitate transport

and transit to reduce delays and thereby cut costs. Their efforts should not be compromised

by structural distortions to the trucking services market.


17

Table 2: Elements of delay on a round trip to Bamako (days)

Source: Mali trade and transport facilitation strategy—World Bank

II-2 Trucking-cost structure

T&R suggest that trucking costs in sub-Saharan Africa are not much higher than elsewhere in

the world.2 Variable costs dominate whereas, in the developed world, fixed costs dominate:

in West Africa, T&R find that about 70% of costs are variable and 30% fixed.

The current study assembled and borrowed information from budgets of different types of

West African transporter to compare their structure with T&R’s findings.

1. A Nigerien informal-sector trucker with a 25T truck had fuel costs of 44% and, together with other variable costs, total variable costs of 95% of his operating budget, leaving only 5% for fixed costs, including 2% for wages for a driver and his apprentice. (See Table III-1 in Appendix 5.)

2. At the other extreme, the cost structure of the same 25T vehicle given by the general

manager of a big Cotonou-based transport company (SITT-Benin) is very different: fixed costs represent 53% of the total costs—with wages accounting for 28%—and variable costs represent 47%. (See Table III-2 and Figure 11 in Appendix 5.)

3. Between these two extremes, a recent study on the corridors from Niamey to Lomé and

Cotonou, variable costs represent 74% of total trucking costs for a transporter from Benin, 69% for a transporter from Niger and 80% for a transporter from Togo. (See Figure 5 and the underlying data in Table III-3 in Appendix 5.)

4. Data on the operating-cost structure for a 47T truck collected by Mali’s Ministère de

l’Equipement et Transports from various Malian transporters confirm this cost structure on the Abidjan-Bamako corridor. (See Table III-4 and Figure 13 in Appendix 5.)

Those percentages for variable costs are not far from the average of 70% suggested by T&R

for West Africa, despite the significant difference in the cost structure between an informal-

sector owner-driver operating one truck and a formal-sector transporter managing a transport

company and operating a large fleet. The consumption of fuel and tires represents the main

operating costs, and the fixed costs account for less than 30% (due to low wages) and there

is an extensive use of secondhand trucks, as stated by T&R.

2 T&R pages 4, 63.

Distance

(km)

Port

delays

Driving

time

Border

crossings

Terminal

delays

Other

delays

(e.g.

repairs)

Round

trip

Dakar 1365 5 7 3 6 10 31

Lomé 1967 5 9 6 6 15 41

Tema 1973 5 9 6 6 15 41

Conakry 980 5 6 2 6 8 27

Abidjan 1225 4 6 3 6 9 28


18

Figure 5: Cotonou/Lomé-Niamey: 35T capacity;

various nationalities: costs as % of total

Cotonou/Lomé-Niamey: 35T

capacity; various nationalities:

costs as % of total

0%

20%

40%

60%

80%

100%

Benin Niger Togo

Total variable costs

Total f ixed costs


19

III TRUCKING PROFITABILITY

III-1 T&R’s perspective

Trucking is a profitable industry for most companies in Africa, especially along the main

international corridors. Managers of trucking companies acknowledge, for example, that

paying back the costs of a new or less than three-year-old truck takes less than three years.

In the many African countries where transport demand is booming as a result of economic

growth, truckers can rapidly recover costs. Road transport has turned into a strong sellers’

market almost everywhere in Africa. Profits are a function of market size and the number of

market participants. In Africa, because of the thinness of some markets, the cartels are easier

to form than in Asia or Europe.3

Table 3 reproduces findings that T&R present to show profit margins of 80% on the corridors

from Tema to Ouagadougou and Bamako.4

Table 3: International transport prices, costs and profit margins

Route Price (US$ per km)

Variable cost (US$ per km)

Fixed cost (US$ per km)

Profit margin (%)

Tema/Ouagadougou 3.53 1.54 0.66 80

Tema/Bamako 3.93 1.67 0.62 80

Source: T&R (Table 4.2, page 40): trucking survey data and own calculations.

III-2 Case studies

Using the same sources of truck operating costs from Appendix 5 as in Section III, Figures 6-9 show that:

1. On the Abidjan-Bamako corridor, haulage with a 25T truck is profitable only if the

loading ratio exceeds 90%.5 The profit margin increases with the loading ratio and

reaches a maximum of 7 FCFA/T-km6 (less than USD 0.02/T-km), or 26% of the

transport price with a 125% loading ratio. (See Figure 6.)7

2. On the Cotonou-Niamey corridor, a transporter from Benin will not make any profit if

he respects the official loading capacity of 35T for his truck. His profit margin is 4

FCFA/T-km, (USD 0.009/T-km), or 14% of the transport price, if he loads 5T more

and 6 FCFA/T-km (USD 0.013/T-km), or 21% of the transport price) if he loads 10T

more. (See Figure 7.)

3. A transporter from Niger using a truck with the same legal loading limits on the same

corridor will start making a profit only once he overloads by more than 10T. (See

Figure 8.)

4. A transporter from Togo facing the same legal limits on the same corridor will lose 2

FCFA/T-km (USD 0.004/T-km) if he respects the official loading capacity. His profit

margin is 5 FCFA/T-km (about USD 0.01/T-km) or 18% of the transport price) if he

overloads by 10T. (See Figure 9.)

3 T&R page 39.

4 The 80% profit margin is arithmetically inconsistent with the transport prices and costs given in that table which

yield profit margins of 60% for Tema-Ouagadougou corridor and 72% for Tema-Bamako corridor. However, in a

personal communication, Gaël Raballand explains that the different estimates in the table are all generated by an

econometric model, and need not be internally coherent. However, the percentages are all of the same order of

magnitude and any of them would be evidence of high profit margins.

5 The ―loading ratio‖ is the ratio of the load to the legal maximum load.

6 USD 1.00 ≈ 455 CFA francs during the research period for this study.

7 CFA francs per tonne-kilometer.


20

5. On the Lomé-Niamey corridor, an informal transporter (Mr. Alkassoum from Niger)

operating a single secondhand vehicle with the same 25T loading capacity realizes a

profit margin of 18%. (See Table III-1.)

Despite a significant difference in their transport cost structure, the informal and formal

transporters realize approximately the same profit margin per trip on the same corridor and

using the same type of vehicle, but the annual profit is twice as high for the formal transporter

who is much better organized and can operate 24 round trips per year as for the informal

transporter who operates only 10 round trips per year.

Figure 6: Abidjan-Bamako: trucking

prices vs. cost

Figure 7: Cotonou-Niamey, Benin

trucker: transport price vs. cost

Figure 8: Cotonou-Niamey, Niger


Figure 9: Cotonou-Niamey, Togo


Abidjan-Bamako: trucking prices vs. costs

15

20

25

30

70% 90% 110% 130%

Loading relative to legal maximum

CF

A f

ran

cs p

er

ton

ne-k

ilo

metr

e

price

cost

Cotonou-Niamey, Benin trucker:

transport price vs. cost

20

24

28

32

30 35 40 45 50

cargo weight (tonnes)

CF

A f

ran

cs

pe

r to

nn

e-

kilo

me

tre

price

cost

Cotonou-Niamey, Niger trucker:


20

24

28

32

36

40

30 35 40 45 50


CF

A f

ran

cs

pe

r to

nn

e-

kil

om

etr

e

price

cost

Cotonou-Niamey, Togo trucker:


20

24

28

32

30 35 40 45 50


CF

A f

ran

cs

pe

r to

nn

e-

kil

om

etr

e

price

cost


21

III-3 Interview results

Case studies and interviews undertaken for the current study fail to confirm T&R’s estimate of

an 80% profit margin for West African trucking. The average profit margin lies between 15

and 20% per trip, which is reasonable for such relatively risky activity in West Africa.

The consultant asked interviewees whether they saw transit trucking as a profitable business.

Twenty-one of them answered unambiguously and Table 4 summarizes their responses.

Table 4: Opinions about whether truckers make a profit

For all products and seasons

For some products

For some seasons

Not at all Total

Abidjan 2 2 4

Tema 3 3

Lomé 3 2 1 6

Cotonou 6 1 1 8

Total 12 5 0 4 21

Four respondents, two of whom were Ivorians based in Abidjan (one each from the public and

private sectors) felt that there was no profit in trucking. The best that two other Ivorian public-

sector respondents could say was that trucking generated profits for some products: no

Abidjan-based respondents saw trucking as universally profitable, whereas half of the

respondents did in Lomé and Cotonou, and all of the Tema-based respondents. The

particular inability of Ivorian truckers to win backhaul freight in the Sahel after having

delivered cargo hauled from Abidjan seems likely to lie behind this distinct response from

Abidjan-based respondents.

The private sector has a self-interest in downplaying the profitability of the trucking business.

Indeed, the private sector (3 of 10) was more likely than the public/ parastatal sector (1 of 11)

to respond in this way and also to de-emphasize all-round profitability (5 of 10), as opposed to

the public/parastatal sector (7 of 11). However, the difference is not great. Optimists might

suggest that this gives hope that the private sector was being frank during the interviews;

cynics might suggest that the public sector was also being coy because it found the regulatory

structure embarrassingly inefficient or even because it somehow benefits from the

inefficiency.

Many qualifications accompanied answers to this question about profitability, particularly the

impact of overloading and axle-weight controls. Other issues relating to profitability include:

the continuing poor overall quality of the regional trucking fleet; restrictive practices;

commissions, informal payments and bribes; and seasonality. The relative importance of

these issues varies by port/corridor and by the extent to which each port/corridor substitutes

for adjacent ports/corridors.


22

III-4 Analysis

Overloading and axle-weight controls

For years before the study took place, reference prices were too low to meet costs for

informal-sector truckers, i.e. the owners of most trucks. Overloading was the only solution for

most transporters to survive, especially the informal ones. This has disastrously accelerated

the degradation of West Africa’s major trucking corridors. In addition, overloaded

unroadworthy trucks promote road accidents. Despite overloading, some informal-sector

truckers may not have been covering costs, partly because of poorly performing trucks, partly

because they did not have the accounting skills to know that they were making a loss.8

The study took place at a time of introduction of region-wide controls on axle-weights in order

to limit the damage to roads inflicted by heavy lorries through the Union Economique et

Monétaire Ouest Africaine (UEMOA)’s axle-load control directive.9 Although in Benin,

Burkina Faso, Côte d’Ivoire and Togo, governments had not yet introduced these controls, in

Ghana, Mali and Niger they had done so. 10

The implementation of these controls, albeit

sometimes haphazardly, led to downward pressure on the loads carried, which meant that

almost all truckers became loss-making.

Promoters of this policy probably expected not only that it would reduce road-maintenance

costs and accidents but also that it would oblige informal-sector truckers (who mostly

depended on overloading to make a profit) to withdraw from the transport market. After the

shakeout, the resulting regional fleet would be more modern in its capital and management

and thus more efficient. However, they reckoned without the solution that truckers’

associations and shippers’ councils then negotiated: They agreed to raise transport prices by

more than 70% to restore approximately the pre-existing level of profitability for most informal-

sector inter-state truckers.11

This arguably perverse solution means that end users (and not

the inefficient transporters) ultimately pay the cost of the axle-load control policy. Unprofitable

transporters using old vehicles remain in business while formal-sector truckers presumably

make higher profits than they did before. In addition, any trucker hauling containers must now

surely generate very high profits because containers, which were rarely heavy enough to

generate axle-weights that exceeded the new limits, also benefit from extra profit due to the

higher trucking prices.

From the perspective of the shipper, the lower legal loads that trucks can carry mean that

there is effectively and suddenly a much smaller regional trucking capacity than previously.

On routes covering at least one country that has imposed axle-weight controls, not only has

this resulted in their conceding to higher rates to provide incentives for continued trucking; it

has also sucked up all available capacity and made truck shortages more frequent at times of

high demand.

The situation was in flux at the time of the survey on which this study is based. Moreover, the

uncertainty due to some countries not yet having imposed axle-weight controls rendered the

situation more complex. The situation should evolve further from July 2010, after which all

UEMOA members that had not so far imposed axle-weight controls were bound to do so. It

will be important to monitor closely the changes taking place over the course of 2010.

8 Many informal-sector truckers also trade on their own account. Some observers believe that these truckers cross-subsidize losses from their trucking operations with trading profits, without being able to clearly separate the profit

and loss in their two distinct business activities and thus without being explicitly aware of the cross-subsidization. 9 n° 014/2005 (May/June 2009).

10 Ghana is not a member state of UEMOA but, surrounded by UEMOA countries, and accepts the rationale for using the same standards.

11 For example, Niger’s transporters’ association requested an increase from 38,000 to 71,000 CFA francs per tonne

for the trip from Tema to Niamey. The importers accepted 67,000 CFA francs.


23

Poor overall truck quality and informal management

Although truckers on some corridors now benefit from higher trucking rates, the regional fleet

remains unchanged and still averages the lowest annual mileage in Africa, as Section II-1

showed. One Malian representative noted that the profit margin was reasonable for a

minimum of 1.5 roundtrips per month, which the formal sector, with its more productive fleets,

can attain. By contrast, most transporters work in the informal sector, make only one

roundtrip per month with their poorly performing rigs, and merely stay in business, lowering

the average efficiency of the regional fleet.

Several operators interviewed highlighted the fact that, given the high risks associated with regional transport, a flat tire or mechanical breakdown can transform this low profit margin into a deficit which, they claimed, informal-sector truckers experience quite often. T&R concur, noting:

Success can rapidly turn into failure in the African transport industry and vice versa. If all

the right conditions are attained (a “good” manager who gets access to the load, “good”

drivers who find loads by themselves while limiting negative impacts to the truck, and a

“good” truck that is reliable and cheap to maintain), then profitability can be high as the

return on investment may average three years. Truckers who are unable to attain such

conditions will not be profitable.12

Restrictive practices

Section IV covers the inefficiencies of the trucking sector due to restrictions on the allocation

of freight to trucks in certain ports. These inefficiencies stem from the absence of a free

market in freight allocation that reallocates business from high-quality trucks to low-quality

trucks, thus redistributing profit across the regional fleet.

Separately, Sahelian authorities do not allow a free market for trucks registered elsewhere to

carry freight within their countries. Thus, for instance, Ivorian truckers have little incentive to

take freight from Abidjan to destinations in Mali because they know that, if they can organize

a backhaul load, the authorities will not allow them to carry it. This—and the hassle involved

for Ivorians trucking in the Sahel—gives them little incentive to compete for Sahel-bound

freight in Abidjan, thus reducing the competition in that market.

Trade imbalance

The Sahelian countries import significantly more than they export, so many trucks return

empty from the Sahel to the port and the revenue from their northbound load must support the

costs of the round trip. This inevitably leads to higher prices for the northbound load.13

12 page 41.

13 Gaël Raballand (private communication) points out that, though this structural imbalance does indeed constrain

the efficiency of trucking from the West African coast to the Sahelian landlocked countries, it is not a key factor that

explains the inefficiency of West African trucking because, he states, landlocked Uganda suffers from an even

greater trade imbalance but has lower priced trucking from Mombasa.


24

Commissions, bribes and informal payments

Profit margins also suffer because of:

commissions to freight brokers in the port in order to find freight quickly and informal payments to truckers’ associations to jump the queuing mechanism set up at the ports

bribes en route to the Sahelian destination to buy-off various officials along the route who do not respect permissions granted at the port

informal payments in the Sahel countries to get permission to carry a southbound load into a coastal country from a landlocked country.

There exists a trade-off between, on the one hand, paying additional fees scarcely related to

services rendered and, on the other, waiting—sometimes for weeks—to get cargo and

increase the use of trucking capital. In general, informal-sector transporters find themselves

making these payments more often than do formal-sector transporters, because they have

less negotiating power.

Seasonality

Trucking profitability is often seasonal, dictated by agricultural calendars. Post-harvest

demand for trucking of cotton, cocoa and coffee means more demand for southbound

trucking within coastal countries, resulting in faster roundtrips and higher profits. This

demand also means fewer trucks for trade between ports and Sahelian countries.

Conversely, there is often an oversupply of trucks at other times: a representative of a

Togolese truckers’ association noted the tendency for an oversupply of trucks in Lomé from

December to May. Seasonality also occurs for other reasons: a Malian in Tema noted an

undersupply of trucks during the run-up to the Muslim fasting month of Ramadan, to the start

of the school year and to end-of-year holidays, with a consequent seasonality in trucking

profitability.

Global slowdown

Those interviewed did not mention the global recession that was underway during the

collection of data for this study in 2009 (and the impact of which would not have been felt

when T&R were collecting their data in 2007). It seems likely that the import flows to the

Sahel via the ports would have slowed down since 2007 and that approximately the same

number of trucks was chasing a significantly lower volume of cargo, thus reducing the prices

and profitability of trucking services.14

Other issues

The private sector emphasized other issues affecting profitability that remain poorly documented:

There are specific logistical inefficiencies on certain routes that truckers cannot avoid and that reduce profitability. A Togolese private-sector representative gave the example of the slow unloading for which Ouagadougou is known.

The Togolese private sector asserted that traders who have their own trucks make big profits and, in contrast, independent transporters who haul goods for traders make less profit. However, proving this would require access not only to independent transporters’ budgets but also to separate budgets for traders with trucks for each of their trading and trucking operations. If substantiated, this finding would require an explanation in terms of the formal or informal rules applying to this different category of trucker that generate these higher profits.

A Nigerien truckers’ representative said that independent transporters valued longer-term haulage contracts with importing companies but it was not clear how much this was due

14 Gaël Raballand (private communication) believes that this would have been a factor.


25

to more profitable individual trips, faster turnaround times, easier planning, or the reassurance of guaranteed business.

In some circumstances, truckers find hauling certain commodities less profitable than others. Togolese truckers’ representatives mentioned rice, vegetable oil and cement and attributed the low profitability to an oversupply of trucks for such cargoes (without commenting on the likely persistence of this oversupply—and thus of the low profitability).

In some cases, transporters’ profits suffer because they must apparently pay compensation to shippers if food cargoes are damaged en route. This would seem to apply mostly to shipments that take place entirely within West Africa than to those destined for import or export via ports.


26

IV THE STRUCTURE AND CONDUCT OF THE MARKET FOR

TRUCKING

This section analyses the West African trucking-market structure and conduct through

consideration of the following questions:

a) Is there a transport market oversupply—are there too many trucks?

b) Is the 2/3-1/3 transport quota rule effectively implemented in the ports?

c) Is the queuing (―first come, first served‖) system for trucks loading in the ports effectively

implemented?

d) Are the transport prices freely set by the market?

For each issue, a review of T&R’s main statements and conclusions for West Africa precedes

a breakdown of answers given during interviews by port, a summary of additional information

emerging from discussion of the issue, and conclusions.

IV-1 Supply response to the demand for trucking capacity

IV-1-1 T&R’s perspective

In West and Central Africa, large markups by providers in transport cartels are the main

determinant of high transport prices. Cartels create a large gap between costs and prices and

provide low quality. Operators in such markets achieve high profits despite low yearly

utilization of their vehicle fleets and many non-tariff barriers. Under such conditions, it would

be expected that new operators would enter the market aggressively, but this does not

happen. In fact, there is an oversupply of trucking capacity because outsiders find it hard to

break into a market dominated by cartels and market access rules. In East Africa the trucking

environment is more competitive and the market more mature. Major corridors in Southern

Africa are the most advanced in terms of prices and efficiency of services, mainly because of

a deregulated transport market.15

IV-1-2 Interview results

The consultant asked interviewees whether they believed that there was an over-supply of

trucks on the market: for all products and seasons, for some products, for some seasons, or

not at all. Thirty-one of them answered unambiguously and Table 5 summarizes their

responses.

Table 5: Opinions about whether an oversupply of trucks exists


For some products

For some seasons

Not at all

Total

Abidjan 2 5 7

Tema 4 2 6

Lomé 4 1 3 1 9

Cotonou 3 6 9

Total 4 5 8 14 31

Of these 31 responses, 16 came from private-sector representatives and 15 from

representatives of the public sector (including parastatal organizations). Most thought there

15 T&R page 6.


27

was no oversupply or, at worst, a seasonal one. The exception was Lomé, where about half

the respondents thought there was an oversupply. The trends were broadly similar

independent of whether the respondent represented the private sector, on the one hand, or

the public sector or a parastatal company, on the other. They were also broadly similar

across corridors emanating from a given port and across Sahelian destinations.

The question also provoked additional remarks that provide greater insights into this issue.

Corridors emanating from Tema

a) Representatives of the Ghana Haulage Transport Drivers’ Association, the Conseil Nigérien des Utilisateurs de Transports Publics (Niger Shippers’ Council) and the Coordination Nationale des Transporteurs Routiers du Mali (Mali National Road Tranporters’ Union) noted several seasonal shortages of trucks for regional road transport:

During the cocoa season in Ghana, a lot of cocoa cargo chases the available trucks, pushing up trucking rates and resulting in a shortage of trucks for regional haulage. Ghanaian transporters who otherwise transport most goods to Niger (because of a frequent lack of available Nigerien trucks) prefer local loads of cocoa.

Similarly, prior to the farming season, importers of farming fertilizers use more of the available Ghanaian trucks, resulting in shortages and/or higher prices for regional trucking.

Before the Muslim holiday of Ramadan, the end-of-year holidays, and the start of the new school term, the demand for transport is high but there is simultaneously a lack of transporters: the demand for transport is higher than the supply capacity at prevailing prices.

b) During the third quarter of 2009, Ghana’s effective implementation of UEMOA’s axle-load control policy (Circular N° 014/2005/CM/UEMOA) limiting to 11.5 T/axle produced an important reduction of transporters’ effective capacity on the main corridors (e.g. to transport 1,000 T now requires 40 trucks where 25 trucks were sufficient before the implementation of the axle-load control).

16 Several Ghanaian and Nigerien

representatives emphasized that even if there had been an overcapacity in the past, this is no longer the case. With the same fleet of trucks, the effective transport capacity has been reduced by a minimum of 20% to 30% due to the strict axle-load control. Because of the trade disequilibrium of landlocked countries (with the volume of their imports largely exceeding the volume of their exports), there is a structural excess of north-south trucking capacity, though perhaps no longer from south to north.

c) A representative of the Conseil Burkinabé des Chargeurs (CBC) thought that turnaround times had decreased on the Tema–Ouagadougou corridor and noted that this reduction might offset any shortage of trucks for the northbound journey.

Corridors emanating from Lomé

a) Importers from major landlocked countries may use their own vehicles to transport their goods from Lomé port, leaving less freight for independent truckers. Furthermore, there is an oversupply of trucks in Lomé because many transporters from Ghana, Togo and Benin prefer this port for reasons of security and limited delays in loading, according to a representative of the freight office of the Port Autonome de Lomé. Other respondents appeared to confirm this, citing waits for freight at Lomé of one to three weeks (Union National des Transporteurs Routiers du Togo, (UNATROT, Togo National Carriers’ Union)), up to a month (CBC), and of up to two months (independent trucker).

b) A second UNATROT representative claimed that some Togolese truckers do not want to

go to Ouagadougou because of (a) slow unloading in Ouagadougou and (b) fierce

16 Although Ghana is not a member of UEMOA, it is surrounded by UEMOA members and has agreed to adopt the

UEMOA rules in this matter. 11.5 T/axle equates to a 25T load for most Ghanaian trucks that used to load cargoes of

up to 70T and 27T for Burkinabe trucks that used to load 40T cargoes.


28

competition from Burkinabe truckers who lower their prices to ensure that they get a load back home.

c) By contrast, the same CBC representative noted that from April to September there were

also times when there was a deficit of available trucks. d) In some seasons, southbound freight from Mali determines the availability of Mali-bound

trucks in Lomé, according to a representative of the Conseil Malien des Transporteurs Routiers (Malian Council of Road Carriers). This reverses the normal situation where the northbound leg of the roundtrip from the port drives the volume of trucks on the corridor.

e) For most strategic products (particularly fuel with its dedicated tanker trucks), there is an

equilibrium between transport supply and demand.

Corridors emanating from Cotonou

a) Only landlocked countries’ trucks may transport northbound shipments of certain ―strategic‖ products: e.g. uranium (in Niger), phosphates (in Burkina Faso), fuel (in most countries). In the case of Niger, its remaining fleet is not sufficient, quantitatively and qualitatively, to take advantage of the landlocked country’s quota for transporting other goods (under the 1/3–2/3 quota system)

17. For a fee, trucks registered in other countries,

mostly Benin, may then take some of Niger’s 2/3 share. b) Before the start of the cotton season there is an oversupply of trucks, according to a

representative of Benin’s Direction Générale des Transports Terrestres (DGTT). Conversely, during the cotton collection season, there is an undersupply for other cargo at prevailing prices, as many trucks choose to take more remunerative cotton, according to representatives of the Conseil Burkinabé des Chargeurs and the Chambre du Commerce et de l’Industrie du Bénin (CCIB).

c) Another CCIB representative noted that there was always an excess truck supply at

Cotonou unless trucking rates were low (when presumably they go elsewhere—see ―Corridors emanating from Lomé‖). However, a freight forwarder pointed out that this oversupply does not include Nigerien trucks. And another DGTT representative appeared to contradict the thesis of an oversupply altogether, underlining the shortage of trucks at Cotonou port, as well as their lack of roadworthiness and the lack of organization among their owners.

Abidjan-Ouagadougou corridor

a) A representative of the Office Ivoirien des Chargeurs (OIC) noted that Ivorian transporters lack the incentive to take cargo to the landlocked countries because Sahelian governments do not allow them to pick up freight there for their return journeys. Presumably as a result of this phenomenon, representatives of the Ivorian Government’s Observatoire de la Fluidité des Transports (OFT), the Chambre du Commerce et de l’Industrie de Côte d’Ivoire and Comité Nationale de Facilitation described an insufficient independent Ivorian trucking capacity at Abidjan port, as a result of which Ivorian freight forwarders have their own fleets to meet their clients’ needs.

18 Further, the OFT

representative stated that the freight forwarders lose money on their trucking operations, which their transit operations subsidize.

b) Most traffic between Abidjan and Ouagadougou takes place by rail so few of Burkina

Faso’s road-transporters ever reach Abidjan.

17 ECOWAS’ IST Convention does not specify what constitutes ―strategic‖ freight. Nor, apparently, do the bilateral freight-sharing treaties concluded within the IST framework. It seems that governments originally put military supplies and food aid in this category. However, it now appears to include petrochemicals, important minerals and products

imported directly by the government, at least in some cases. In practice, ―strategic‖ freight is whatever the landlocked government defines it to be. 18 These organizations are: Transport efficiency information system; Côte d’Ivoire Chamber of Commerce and

Industry; and the National Facilitation Committee.


29

c) For the 4–6 months of the cotton season, Malian and Burkinabe transporters prefer loading cotton to Abidjan and fertilizers to Mali and Burkina Faso, so there are not enough vehicles to transport non-fertilizer products to Mali or Burkina Faso at that time, according to representatives of OIC and the Société Nationale des Transporteurs de Marchandises et Voyageurs de Côte d’Ivoire (National Society of Transporters of Goods and Passengers). However, the Burkinabe use of rail transport doubtless reduces this effect for Burkina Faso.

IV-1-3 Conclusion

No oversupply of trucking capacity exists in all seasons and for all products. The situation is more complicated than that. In all ports, those interviewed stated, or assumed implicitly in their remarks, that the quality of the informal-sector fleet—by far the largest segment of supply of trucking services—was poor due to unroadworthy vehicles (either being repaired or operational but unreliable and unsafe) that were poorly managed. Thus the effective supply that the informal sector represents is less than its nominal capacity. The market for trucking services is segmented. Firstly, only trucks registered in a Sahelian country can carry ―strategic‖ freight to that country. The study did not quantify this category but noted the impact it has on the supply of trucking for the residual (but apparently bigger) category of ―non-strategic‖ freight. Secondly, certain types of truck cannot carry certain types of freight. So, in reality, there are sub-markets for hauling hydrocarbons, customs-sealed containerized freight, and loose goods that a general-purpose lorry can carry. Supply and demand may vary significantly within each sub-market. The study did not collect data at this level of detail. Demand for trucking capacity undergoes significant swings. Cash-crop harvests have the biggest impact but respondents noted other seasonal sources of reduced truck supply. The formal ban in Sahelian countries on trucks registered in other countries picking up cargo dissuades particularly coastal-country truckers from participating in transit haulage. Axle-weight controls in a given country cut at a stroke around 25% of the capacity of trucks on corridors that cover that country. This was a big issue in 2009 and promises to be so again in 2010 as more countries adopt axle-weight controls. Global economic recession since 2007 has reduced trade, thus the demand for transit traffic and the demand for trucks. From 2007 until mid-2009, this effect would have put downward pressure on trucking prices. Since mid-2009, it seems likely that the increased demand for trucks due to the axle-weight controls has more than countered this effect. Various factors conspire to create a more noticeable excess supply of trucks in Lomé, though seasonal deficits occur there too. Part of any oversupply of Burkinabe trucks there may be due to the fact that most freight bound for Burkina Faso via Abidjan goes by train, rather than truck, so Burkinabe truckers must ply their trade elsewhere. There is a shortage of Nigerien trucks to haul freight to Niger in most ports, most notably in Cotonou.


30

IV-2 Freight-sharing rules

The ECOWAS Inter-State Road Transportation Convention (No. A/P2/82) allows pairs of

member states to conclude bilateral treaties that give specific percentages of the freight

passing through a coastal country’s port en route to a landlocked country to the truckers of

each of the two countries.19

Several such bilateral treaties exist. Avoiding the possibility of

perceived threats to national sovereignty by explicitly fixing shares for this type of trucking,

these agreements undermine free markets and the efficiency that accompanies them, to the

detriment of trade between the two countries and thus the rate of economic development of

each.


Of the market entry barriers, freight-sharing schemes probably are most costly. The current

system favors the use of large fleets, which consist mostly of old trucks in poor condition.

Furthermore, it fosters corruption because the only way for a transport provider to increase its

volume of cargo is to bribe the freight bureaus, the government entities charged with

allocating freight among the various transport providers. Freight-sharing schemes also are the

reason why direct contracting—a negotiated arrangement between shipper and transporter

that is one of the best signs of better logistics—is almost nonexistent in Central Africa and is

marginal in West Africa.20


The consultant asked interviewees how well they believed the 1/3-2/3 freight-sharing rule was

working. 21

Twenty-seven of them answered unambiguously and Table 6 summarizes their

responses.

Table 6: Opinions about whether the 1/3-2/3 freight-sharing rule applies


For some products

For some seasons

Not at all

Total

Abidjan 2 5 7

Tema 4 4

Lomé 3 2 2 7

Cotonou 7 2 9

Total 10 2 2 13 27

Seven out of nine respondents in Cotonou thought that freight-sharing was working as

intended and three out of seven in Lomé felt the same. In stark contrast, no respondent in

Abidjan or Tema was of this opinion: Five out of seven in Abidjan said the system was not

working at all and all four in Tema said the same. There was no great difference in the

perspective of respondents from the private sector, on the one hand, and from the public

sector or parastatal organizations, on the other. Three-quarters of those discussing corridors

19 N’Guessan N’Guessan, La Problématique de la Gestion Intégrée des Corridors en Afrique Subsaharienne,

Transport Policy in Sub-Saharan Africa Program (World Bank and Economic Commission for Africa, 2003): page 11;

and ―Transport Infrastructure for Transit Trade of the Landlocked Countries in West and Central Africa: an

Overview‖,. Contribution by the UNCTAD secretariat to the Mid-term Review of the Almaty Programme of Action,

(UNCTAD, 2007): UNCTAD/LDC/2007/1, pages 10-11.

20 T&R pages 5-6.

21 The standard bilateral treaty gives a 1/3 quota of the transit freight to the coastal country and a 2/3 quota to the

landlocked country.


31

leading to Niamey felt that the rule was being applied, compared to two-thirds for corridors to

Ouagadougou, and five-sixths for corridors to Bamako, who felt that the rule did not apply at

all.

As for the issue of possible over-supply, the question about freight-sharing raised a series of

underlying issues:


a) As for other ports, all interstate transport of ―strategic‖ goods is reserved for landlocked countries’ transporters. The 1/3-2/3 rule does not apply to these goods.

b) The quota system does not work in Tema port. This means that transporters and freight

forwarders can conclude deals directly, thus bypassing transporters’ associations’ attempts to channel them to wait to be assigned to one another. A representative of the Coordination Nationale des Transporteurs Routiers du Mali (Mali National Road Transporters’ Union) suggested that these institutions exist but lack the organizational ability to run the quota system.

c) For freight bound for Burkina Faso, there is a roughly 50:50 allocation to Ghanaian and

Burkinabe trucks, with slight variations from year to year, according to a representative of the Conseil Burkinabé des Chargeurs.

d) Sahelian trucks heading southbound to Tema do not have the right to load freight freely

within Ghana for their return journeys outside their options on freight at the port. This ties them to the port, which is a good source of freight but can imply delays.

e) Representatives of each important landlocked importer (Mali, Niger and Burkina Faso)

use their own brokers, which are the creation of these countries’ shippers’ councils, to find and load trucks without the consent of Ghana’s transporters’ associations, in order to avoid paying fees to the Ghanaian transport associations, according to a representative of the Ghana Haulage Transport Drivers’ Association (GHTDA).

A representative of the Conseil Nigérien des Utilisateurs des Transports Publics (Niger

Shippers’ Council) suggested that the quota system did not work for Niger-bound freight

because not enough Nigerien trucks came to Tema to take advantage of it. When landlocked

countries have no available trucks in the port, they ―sell‖ their traffic rights to Ghanaian

transporters for fees of 50,000–80,000 FCFA (USD 110–176) in Burkina Faso, 80,000–

100,000 FCFA (USD 176–220) in Niger, and 100,000 FCFA (USD 220) or more in Mali,

according to the GHTDA representative.22


a) Nigerien truckers haul all ―strategic‖ shipments to Niger, particularly inputs to uranium mining and the oil industry.

b) The quota system is effectively implemented in Lomé port for goods destined for Niger,

with the Conseil Nigerien des Utilisateurs des Transports Publics controlling the supervision and control of the quota system.

c) However, the quota system does not govern the allocation of freight for goods destined

for Burkina Faso and Mali, according to representatives of the Union Nationale des Transporteurs Routiers du Togo (UNATROT), the Conseil Burkinabé des Chargeurs, and the Conseil Malien des Transporteurs. According to another UNATROT representative, the exceptions are Ouagadougou-bound shipments of rice and containerized goods for



32

the same destination, which are allocated between Togolese (1/3) and Burkinabe (2/3) truckers.

23


a) The quota system is implemented in Cotonou port, with certain anomalies. A central office of truckers’ associations allocates Benin’s 1/3 quota between seven associations.

b) For goods to Niger via Cotonou, there are often not enough Nigerien trucks to take the

full Nigerien 2/3 share of ―non-strategic‖ freight because so many of them are carrying ―strategic‖ cargo (which they seem to prioritise, presumably because it is more lucrative). At this point, according to a freight forwarder, a non-Nigerien trucker can pay 4,000 FCFA/T (USD 8.79/T) for the right to carry that freight to Niger. In a slightly different version of the story, a representative of the Chambre de Commerce et de l’Industrie du Benin (CCIB) suggested that Niger’s transporters’ associations sell their right to this cargo to individual Benin transporters for 100,000–250,000 FCFA (USD 220–549) per truckload. Similar situations arise for Burkina Faso and Mali as for Niger, but the structural deficit of Nigerien trucks, which are kept very busy with Niger’s ―strategic‖ freight, seems to be larger. Moreover, according to a second CCIB representative, once in Niger, non-Nigerien trucks suffer ―penalties‖ for ―not respecting the 1/3-2/3 [agreement]‖, unless they make payments to Niger’s transporters’ associations.

c) A representative of the Conseil Nigérien des Utilisateurs des Transports (CNUT) said

that the 1/3-2/3 allocation is not generally applied due to the limited number of Nigerien trucks vying for the 2/3 Nigerien quota and Nigerien truckers’ preference not to haul certain cargoes destined for Niamey, such as vegetable oil, bitumen, construction materials, cement, alcoholic drinks or perishable products in favour of soft drinks, rice and products of low density. However, for loads to Nigerien destinations other than Niamey, which are more remunerative, Nigeriens make sure that their trucks take their 2/3 share. The CNUT representative noted that, in trying to respect this set of informal preferences, the freight management committee manages the allocation of freight haphazardly. These comments suggest that Nigerien drivers can afford to be picky about their loads because they are not going to be able to use their full 2/3 quota anyway.

d) A representative of the Conseil Burkinabé des Chargeurs (CBC) emphasized that the

quota system is not respected for allocation of cargo destined for Burkina Faso. This response seems more authoritative than that of the Direction Générale des Transports Terrestres’s (DGTT’s) representative who said that the quota system is respected for goods destined for Burkina Faso (and also for Mali, for which no directly concerned economic actor responded).

Corridors emanating from Abidjan

a) The high number of checkpoints and elevated security risks inherent in trucking through Côte d’Ivoire are a deterrent for many transporters. In addition, Ivorian transporters find haulage to Sahelian countries, such as Burkina Faso, of limited interest because of the absence of a backhaul load. Finally, there is a viable, high-capacity rail option from Abidjan to destinations in Burkina Faso. Therefore Burkinabe importers prefer to use the train for about three-quarters of their imports through Abidjan.

b) A representative of the Ivorian Government’s Comité Nationale de Facilitation noted that

the 1/3-2/3 rule was still officially in place but that it did not apply to formal-sector freight forwarders or the many Malian importers who are also truckers. Both categories of professional allocate their freight to trucks in advance, outside the constraints of this rule. Thus, to the extent that it is still operational, the rule applies to the informal-sector truckers serving small-scale Sahelian importers.

23 The ―shipments of rice‖ cited may be an example of a large consignment, to which the load-sharing agreement

applies. A similar criterion applies to large shipments (e.g. greater than 1,000T) from Abidjan port.


33

c) For imports through Abidjan to Mali and the remaining quarter of imports to Burkina Faso, the quota system does not apply because Burkina Faso and Mali do not allow Ivorian transporters to load backhaul loads, so Ivorians have little financial incentive to undertake roundtrip journeys to Sahelian destinations. Thus Burkinabe trucks carry most of the remaining quarter of imports not shipped by train and Malian trucks transport about 90% of freight from Abidjan to Mali, according to a representative of the Chambre de Commerce et d’Industrie de Côte d’Ivoire.

d) A representative of the Office Ivoirien des Chargeurs stated that, when shipments of

more than 1,000T destined for Mali arrive in Abidjan, they make an effort to find Ivorian trucks to carry it (usually without success according to a representative of the Direction des Transports Routier et Ferroviaire/Department for Road and Rail Transport). Malian truckers therefore take all smaller shipments, he said.

IV-2-3 Conclusion on the implementation of the freight-sharing rules

The main conclusions drawn on the implementation of the freight-sharing rules are:

The 1/3-2/3 quota system does not apply to ―strategic‖ goods on any of the corridors. Trucks registered in countries other than the landlocked country for which the goods are destined may pay a fee/bribe for the right to carry this category of goods.

For non-strategic goods, the 1/3-2/3 system is partially implemented in two ports out of the four visited. Allocation of shipments from Cotonou to Niger and perhaps to Burkina Faso and Mali follow this system, as do shipments from Lomé to Niger and (for large shipments of rice and containerized goods) to Burkina Faso. However, when too few Burkinabe, Malian and Nigerien trucks are in Cotonou to take up the option on their 2/3 share of freight, their truckers’ associations sell the options to trucks registered in other countries, raising the cost of trucking along corridors out of Cotonou. In particular, the Nigerien fleet is chronically unable to take its full quota. The cost of trucking rises further along the Cotonou-Niamey corridor because, once in Niger, the non-Nigerien driver pays penalties for not having respected the 1/3-2/3 rule. See Table 7.

Table 7: Summary of implementation of freight-sharing rules

Port Destination 1/3-2/3 quotas "first come, first served" queuing

Abidjan Mali No Scarcely

Abidjan Burkina Faso No Scarcely

Tema Mali No Scarcely

Tema Burkina Faso No Scarcely

Tema Niger No Yes

Lomé Mali No Partially

Lomé Burkina Faso

No, except for shipments of rice and containerized goods

Partially; yes for shipments of rice and containerized goods

Lomé Niger Yes Yes

Cotonou Mali DGTT: Yes1

Partially

Cotonou Burkina Faso CBC: No; DGTT: Yes1 Partially

Cotonou Niger Yes Yes2

Notes

1. In Cotonou, DGTT and CBC disagree on whether quotas determine allocation of freight. CBC would

seem the more authoritative source. This raises questions of whether DGTT is correct about quotas for freight from Cotonou to Mali.

2. ―First come, first served‖ applies to the Cotonou-Niger corridor but the queuing does not result in long

waits because there are so few Nigerien trucks and they are pre-allocated to freight and enter the port directly on arrival.


34

Thus the quota system applies wholly and unambiguously to two of the eleven corridors considered in this study (18%), with Niger the destination country in both cases.

24 Indeed, Niger appears to be most regimented in constructing bureaucracies to defend the rights of its truckers and perhaps to enrich its trucking associations. In addition, the quota system applies to two other corridors (Cotonou-Burkina Faso and Cotonou-Mali) and partially to one other (Lomé-Burkina Faso).

T&R are right that, in these cases, restrictive practices exist that render transit trucking more complex, more expensive and more time-consuming than necessary. These practices probably explain a large part of the differences between trucking prices and trucking costs. They should be removed.

The study did not quantify the volumes of freight allocated to trucks in different ways. Such quantification and details of delays and bribes would allow calculation of inefficiencies on each corridor by trucking type.

IV-3 The queuing system for loading trucks

Just as the 1/3-2/3 quota system may operate in a port to allocate freight by country of truck registration, another system may allocate freight attributed to trucks registered to a given country under the 1/3-2/3 rule to the individual truck. The 1/3-2/3 freight-sharing rule and the ―first come, first served‖ queuing system are both non-market mechanisms for sharing out freight. Where shippers’ councils at the ports implement the first, transporters’ associations implement the second. The associations register each truck upon arrival and supervize its loading according to a ―first in, first out‖ (FIFO) rule. In other words, each participating driver registers with his transport association on arrival, joins the back of the queue, and waits his turn.


“In road transport, bilateral transit treaties with quotas and freight allocation and the queuing

system play the same role that the “40/40/20” Rule played in maritime transport. This system

and rule lead to poor service and low productivity, with no incentives to improve efficiency”.25

IV-3-2 Interview results:

The consultant asked interviewees how well they believed the queuing system was working.

Twenty-eight of them answered unambiguously and Table 8 summarizes their responses.

Table 8: Opinions about whether the queuing system applies

24 The study considers all corridors between the ports (Cotonou, Lomé, Tema and Abidjan) and the Sahelian

countries (Niger, Burkina Faso and Mali) with the exception of Abidjan-Niger. 25 T&R page 52.

For all products & seasons

For some products

For some seasons

Not at all Total

Abidjan 2 1 4 7

Tema 2 1 2 5

Lomé 5 1 1 7

Cotonou 1 8 9

Total 10 3 0 15 28


35

Although respondents in Cotonou had mostly felt that the freight-sharing rule was working, the

vast majority of them clearly felt that the queuing system was not. In contrast, in Lomé, most

respondents felt that the queuing system was working, just as they had for the freight-sharing

rule.

In Tema, where all respondents to the freight-sharing question had felt that it was not working,

two out of five said they felt that the queuing system did apply (though that was only for freight

to Niger). In Abidjan, where most respondents to the freight-sharing question had felt that it

was not working, the same was true for the queuing system.

Respondents discussing corridors terminating in Niamey were more likely to say that the

queuing system was working (six out of ten) than those discussing corridors terminating in

Bamako (none out of five) or Ouagadougou (one out of six) though, for Ouagadougou, two

others felt that it worked for certain products.


a) Because the quota system does not work in Tema, the Ghanaian transport unions have no control over how cargo is distributed among trucks, according to a representative of the Ghana Haulage Transport Drivers’ Association. So not all trucks arriving at the port register to join the queue. Further, many large-scale landlocked importers have their own trucks collect their own freight without following the ―first come, first served‖ rule. Separately, some independent truckers already have contracts to load certain freight before they arrive at the port so they bypass the queue. Similarly, other independent truckers use brokers (―middlemen‖) to get freight quickly once they arrive at Tema port and skip the queue in that way or, looking at it the other way, freight forwarders choose the trucks they want, without reference to the truckers’ associations.

b) The informal-sector brokers are the creation of the Tema representatives of the shippers’

councils of Burkina Faso, Mali and Niger. They play an important market-making role at Tema by match-making for pairs of truckers and freight forwarders for a fee of 50,000–60,000 FCFA (USD 110–132) collected from the driver.

26 They are not professionals in

the sense that they do not take responsibility for the quality of service furnished by the transporter or for the quality of the paperwork accompanying the freight. Nor do they offer ancillary services such as insurance. Once the trucker and forwarder agree to work together, the broker takes his fee and leaves them to get on with it. Drivers of trucks registered in all countries can use this system, which bypasses the ―first come, first served‖ system. Nigerien trucks constitute the only exception: their transporters’ association obliges truckers to queue. However, there are so few Nigerien trucks at Tema port that they surely do not have to wait long.

c) Shippers can refuse a truck allocated using the ―first come, first served‖ rule if they think

that it is not roadworthy or secure for the specific needs of a cargo.


a) In Lomé port there is a Bureau de Fret in charge of the freight distribution via the ―first come, first served‖ system. Most, if not all, truckers who are not also importers, register with the Bureau for freight allocation when they arrive at Lomé port. There is one list for flatbed trucks and another for general-purpose goods trucks.

b) For Niger-bound trucks, freight is almost entirely allocated according to the ―first come, first served‖ system. A representative of the Union Nationale des Transporteurs Routiers du Togo stated that this system governed the allocation of rice (which may enter by the boatload) and merchandise in containers to trucks, but that the allocation of other ―trader’s goods‖ (presumably on a relatively small scale) could take place in other ways (presumably by brokered negotiation between freight forwarder and trucker). A representative for the Conseil Malien des Transporteurs stated that the trucker and the



36

importer often negotiate directly but sometimes truckers fall back on the ―first come, first served‖ system to get freight.

c) The shipper can refuse a truck if he thinks that it is not roadworthy and secure for the specific transport operation.


a) In Cotonou port, a Comité Transitoire de Gestion du Fret Routier (CTGFR) is in charge of freight distribution. However, it seems that many truckers and freight forwarders bypass it. A representative of the Conseil Burkinabé des Chargeurs said that the freight clearing house (run by CTGFR) does not work and that, for instance, forwarders have to pay a broker a fee of 50,000–100,000 FCFA (USD 110–220) to secure a truck for a journey to Ouagadougou. This approach to bypassing the ―first come, first served‖ system is illegal: a representative of Benin’s Direction Générale des Transport Terrestres deplored the fact that lorries frequently sneak fraudulently into the port to load and notes that there is no longer great respect for the queuing system. Further, a representative of the Chambre de Commerce et de l’Industrie du Benin mentions the mistrust between the truckers’ associations and the officials responsible for granting entry to the port: presumably some of the broker’s fee goes towards facilitating clandestine access to the port. He concludes that there is no organized structure for the allocation of freight.

b) Benin bylaw no. 009/MTT/DTT/MF (13th February 2007) gives the Nigerien importer the

freedom to choose his Nigerien trucker and freely discuss the trucking price with him. The bylaw operates within the framework of the 1/3-2/3 rule. It is not clear what rights importers of other nationalities have.

c) A freight forwarder asserted that freight is reserved for each Nigerien truck in the port and that each drives straight into the port, bypassing the ―first come, first served‖ system to collect its prepositioned freight. Thus, each truck is loaded in order of arrival, but without queuing.


d) The ―first come, first served‖ rule no longer operates in Abidjan port except, according to a representative of the Office Ivoirien des Chargeurs, for containers and large shipments of fertilizer.

a) Via a system that seems similar to that which obtains at Tema, transporters pay fees (50,000–100,000 FCFA, or USD 110–220) to brokers to get a cargo, according to a representative of the CCI-CI. A representative of the Direction des Transports Routier et Ferroviaire deplored the brokers’ lack of official accreditation.

IV-3-3 Conclusion on the implementation of the queuing system

a) For non-strategic goods, the ―first come, first served‖ loading rule scarcely applies on four corridors out of eleven (36%), partially applies in another four, always applies in three (27%). The three corridors where the loading rule always applies terminate in Niger, the country that seems keenest on non-market allocation of resources. Partial application takes place in Lomé and Cotonou. In contrast, ―first come, first served‖ scarcely happens in Abidjan and does not apply on the two more common (of three) corridors from Tema. (See Table 7.)

b) In Lomé, the rule applies to most large shipments, to containers and to some smaller shipments but other freight allocation is market mediated. In Cotonou, it seems that brokers allocate much freight to destinations other than Niger. In neither case does one know either absolute or relative quantities or volumes of brokered allocations.

c) In eight out of eleven corridors considered, freight allocation takes place at least partially through a brokered process. However, respondents often questioned the quality of the brokerage. It should be possible to replace the informal-sector brokerage system with a more efficient, market-based process of allocation of freight to trucks in all West African ports.

d) The queuing systems clearly impede the efficient allocation of trucks to freight and should be removed as T&R strongly recommended.


37

IV-4 Are the transport prices freely determined by the market?

Distinct from the means by which trucks are allocated to freight, the question of the extent to

which trucking rates are set remains. Are they set unilaterally by a bureaucracy or cartel,

bilaterally through collective bargaining involving the representatives of the importers and the

truckers, or directly through haggling between individual importers and truckers (or between

freight forwarders and drivers, as their representatives)?


In West and Central Africa, large markups by providers in transport cartels are the main

determinant of high transport prices. Cartels create a large gap between costs and prices and

provide low quality [service].27


The consultant asked respondents whether they thought the free market

determined trucking prices. Table 9 summarizes 31 replies.

Table 9: Responses to whether the free market determines trucking prices

For all products & seasons

For some products

For some seasons

Not at all Total

Abidjan 4 0 0 0 4

Tema 4 1 0 1 6

Lomé 9 0 0 1 10

Cotonou 5 0 3 3 11

Total 22 1 3 5 31

Twenty-three (74%) claimed that the laws of supply and demand determined trucking prices.

This included 11 (two in Abidjan, three in Tema and six in Lomé) who described a two-stage

process characterized by haggling within a framework set by collective bargaining or

indicative prices. Cotonou was the only port where those who felt that the market was less

than free outnumbered those who felt that it was free. Private-sector respondents (72%) were

only marginally more likely to suggest that the market was free than those from the public

sector or parastatal organizations (69%).

Again, interesting detail qualified the replies:


a) For imports with direct bills of lading, the importer chooses the shipper offering the best rate after comparisons of various quotes.

b) All respondents agreed that, for other imports, price norms are fixed by the collective bargaining of importers and transporters represented by their associations. After having been set, these reference prices are used as a guide during the negotiation of rates in an individual case.

c) Prices in an individual case vary based on supply and demand, depending on the nature of goods and the availability of transporters. The range of fluctuation around the reference prices is about ±10-15%. It seems that the range of negotiation for trucking rates to Niger is significantly less, due to pressure from the Conseil Nigérien des Utilisateurs des Transports (CNUT) to keep rates high.

d) The multiplicity and competition of transporters’ associations in Ghana induces some degree of liberty for transporters to negotiate their prices with shippers.

27 T&R page 6.


38

e) In the concrete case of the collective reaction to the imposition of axle-weight limits, the Ghanaian truckers’ association, the Chamber of Commerce and CNUT negotiated the revised indicative rates that took into account truckers’ reduced carrying capacity, restoring the profitability of trucking.


a) Landlocked importers and Togo’s transporters’ associations negotiate reference prices. Then the importer and the transporter negotiate a rate relative to these references prices for each individual haulage deal but, in practice, rates generally remain within a ±10-15% range around the reference rate, the same range as in Tema. Representatives of transporters’ associations from Togo and Mali lamented that the (informal-sector) truckers have very limited market clout and that the free market has resulted in prices lower than official rates.

b) Larger, formal-sector transporters make agreements with big importing companies to set rates with which they can plan for the medium term.

c) Despite increases in prices of fuel and spare parts during the last five to six years, transport prices have remained relatively stable on this route until the introduction of axle-weight controls (presumably with increasing overloading over the same period to retain profitability).

d) After the introduction of the axle-load controls in Niger, reference prices for trucking have risen to 55,000 FCFA/tonne (USD 121) for a Lomé-Niamey trip.


a) In theory, there has been a free market for trucking services in Niger (since 2007) and in Benin (since 2000). Nevertheless, Benin’s Direction Générale des Transports Terrestres (DGTT) still declares reference prices according to its own trucking cost studies.

b) However, Benin’s transporters can still negotiate rates freely and accept much lower prices than Nigerien transporters, who are urged by their association not to accept prices lower than the reference prices. A DGTT representative noted that the transporters have a reference price that they do not use. Instead they lower their price in order to get business.

c) The multiplicity and competition of transporters’ associations in Benin induces some degree of liberty for transporters to negotiate their rates with shippers. As a result, their prices are lower than those of Nigerien transporters whose associations seem to have a stronger discipline over their members. (Nonetheless, the 1/3-2/3 rule provides the Nigeriens with a guaranteed minimum share of the market.)


a) Though Côte d’Ivoire formally liberalized transport prices through decree №. 67 of 9th

February 2000, the official reference prices still in use date from 1994 (just after the devaluation of the CFA franc). A representative of the Office Ivoirien des Chargeurs confirmed that indicative prices on the Abidjan-Ouagadougou corridor have not changed much over the last 20 years. This seems likely to change in 2010 when Côte d’Ivoire implements the axle-weight limits.

b) All respondents acknowledged that the market was free, with brokers intermediating deals between freight forwarders and truckers. Several thought that informal-sector truckers are at a disadvantage when negotiating with freight forwarders who have more market clout through brokers with more market savvy.

c) The Conseil Burkinabé des Chargeurs publishes reference prices for the Abidjan-Ouagadougou corridor and the effective negotiated prices vary from 32,000-35,000 FCFA (USD 77) per tonne.

d) The Ivorian Groupement des Producteurs de Pétroles (Association of Petroleum Producers) and the Malian transporters’ associations directly negotiate the transport prices for hydrocarbons. For other freight, Ivorian and Malian transporters use the old reference


39

prices as the basis of negotiation. The Abidjan-Bamako price was 37,000–40,000 CFA francs/T (USD 81–88).

IV-4-3 Conclusion on the existence of a free trucking market

The principles for setting rates for trucking services were similar in all four ports studied.

They involved (a) generating reference trucking rates that became price norms and (b)

subsequent discussion or haggling to determine the price for hauling individual loads.

However, the process for generating the price norms differed. In Ghana and Togo, collective

bargaining takes place between trucker’s associations and importers’ associations from

countries on a given corridor, whereas in Benin and Côte d’Ivoire, government studies

generate reference prices. A priori, either way may generate a good outcome; credibility of

the result will be the main criterion for acceptance of the reference price as a starting point for

individual discussions.

Prices for individual loads fluctuate around the reference prices according to what the market

can bear, based on the relative availability of trucks and freight at any point in time. Technical

market segmentation doubtless exists so that, for instance, rates for flatbed trucks may not

follow the same norms as those for general-purpose goods trucks.

Brokers play an important role in bringing together buyers and sellers of trucking services. In

each port, small-scale, informal-sector truckers feel that they lack bargaining power with

respect to the freight forwarder representing the relatively large-scale importer, particularly as

the forwarder and broker may do a lot of business together, and the trucker cannot know if

they are collaborating to his disadvantage. An electronic matching service, bringing together

trucker and forwarder, making price transparent, might be a fairer, faster, more efficient and

lower-cost means of clearing the market for trucking services. In any case, both broker-

mediated and electronic clearing are superior solutions to quota-driven or queuing systems.

Little evidence emerged of smaller-scale truckers with a truck registered in one country

enjoying negotiating advantages over those with a truck registered in another country,

particularly the country in which the port lies. The exception appears to be Niger-registered

trucks in Cotonou. With economic protection deriving from official Nigerien insistence on the

implementation of the 1/3-2/3 rule, the shortfall of Nigerien trucks for non-strategic freight, and

Nigerien truckers’ associations’ strong discipline over individual Nigerien truckers, these

truckers receive prices higher than the competition from Benin. It is not clear if maintaining

the shortfall of trucks is part of a long-term Nigerien plan to keep trucking rates high for a

small group of favored truckers or, alternatively, if Nigeriens will reinvest the surplus they

derive from higher trucking rates into a greater number of more efficient trucks with which

they will feel comfortable competing in a free, less quota-focused, market.

The process described applies to rate setting for the allocation of individual loads to individual

trucks, which is relevant to small-scale, owner-driver, informal-sector truckers and all small-

scale, informal-sector importers. Larger-scale, more formal-sector actors on both sides may

refer to the reference prices developed through collective bargaining but will have the means

to verify these on their own and incorporate their own specific priorities and logistical

constraints into negotiations leading to longer-term contracts.

However, probably no more than about 10% of West Africa’s trucks belong to large-scale,

formal-sector transporters, who are relatively well equipped to look after themselves. The key

to increasing the efficiency of regional transit trucking lies in institutions, procedures and

techniques that will allow the atomistic haggling involving small-scale truckers to take place

more quickly, openly and fairly, generating market information that allows others to orient


40

themselves in the market and change their strategies according to opportunities revealed

from price messages.

Institutions, procedures and techniques must simultaneously evolve so as to provide

incentives for efficient trucks to make greater profits than inefficient ones.

Overall, the interviews suggest that pressure for fairness and efficiency has eroded some of

the rigidity of the bureaucratically determined allocation of freight to trucks. The market

seems to play a larger role than it did in the heyday of the 1/3-2/3 quota rule and the queuing

system. Nonetheless, elements of these systems remain and undoubtedly constrain the

efficiency of West African transport and transit systems. In addition, as noted above, even

within the purview of market allocation of freight to trucks, a faster and more transparent

system would further increase efficiency.


41

V CONCLUSIONS AND RECOMMENDATIONS

V–1 Conclusions

V–1-1 Introduction

West African trucking prices in the third quarter of 2009 exceed trucking costs by significantly

less than T&R suggest, with the corollary that profitability of trucking is much lower than they

estimated in 2007. There may well have been an overhang of supply when T&R studied

West African corridors in 2007. However, axle-weight controls put in place in some countries

in 2009 require truckers to limit the loads they carry, which means that the total capacity of

the regional fleet has shrunk. An overcapacity of trucks still exists in some places at some

times but there are shortages at other times. The study identifies several reasons for the

underlying fluctuations of supply and demand. As other countries impose these controls in

2010, the effective regional trucking capacity will shrink further and the concern is likely to be

rather one of undercapacity. However, the separate, parallel problem of the

unroadworthiness of many West Africa’s trucks remains.

This study finds that the current West African trucking system for transit freight is misguided

and inefficient. In trying to be fair in the allocation of freight between national fleets and

between trucks within national fleets, it penalizes the more efficient trucking enterprises and

stifles competition. In doing so, it puts in place shippers’ councils and truckers’ associations

that constitute additional layers of cost to the trucking sector, thus compounding the

inefficiency. It also removes incentives for technical improvement of the regional trucking

fleet and for the development of larger, more professionally managed haulage businesses

with regional scope.

The misguided system generates higher prices along trucking corridors for which the costs

are already high. This leads to high extra costs for the economies of the landlocked countries

of the Sahel, which are among the poorest in the world. Their consumers pay more than they

should for imported goods. Their industries pay more than they should for imported

intermediate goods and thus find their final products uncompetitive against imports. Any

industry with ambition to export to the global economy immediately faces a huge competitive

disadvantage due to the additional transport costs that the double oligopoly generates for

them. In short, the raised costs and lowered efficiency that the current system generates

severely limits economic development in the Sahelian countries.

However, there is cause for hope. The picture is richer and more nuanced than the one that

T&R paint. In the ports, one finds that enterprising truckers and freight forwarders often

circumvent the oligopolistic and bureaucratic strictures. Several corridors appear to be

dominated by more market-mediated allocation of transit freight to trucks. Most corridors

studied offer alternatives to the formal rules, albeit relatively unprofessional, inefficient ones.

Significant further reform will require the dismantling of the oligopolistic rules and the

reorientation of the bureaucracies that enforce them. The rules lie embedded in bilateral

treaties that countries could renegotiate piecemeal. However, the one fundamental change

that could liberate West African trucking would be to rewrite ECOWAS’ Inter-State Road

Transportation Convention, which provides the framework for the bilateral treaties, to instead

create a single pan-ECOWAS regional trucking market.

The rest of this section provides a more detailed synopsis of the findings of the report. The

next section submits recommendations for change.


42

V-1-2 Market distortions

1. Quota allocation of “strategic” goods

The allocation of all goods that a landlocked country chooses to define as ―strategic‖ to trucks registered in that country automatically limits competition in the provision of trucking services, possibly justified if national security is at stake. However, at least some countries define goods that appear to bear little relation to national security as ―strategic‖ (e.g. building materials), suggesting that interest groups have broadened this category principally to provide economic protection to the trucking sector within their country. If so, this limited competition is economically inefficient for West Africa. One could nevertheless imagine that companies supplying trucking services within a country would compete freely for this inflated category of freight, keeping prices low. However, as we will see, the national trucking associations that manage the allocation of this freight have a mindset that favors equitable treatment of its members, rather than promotion of the efficiency of its sector. This study has not estimated for each landlocked country the proportion of transit trade that falls into the ―strategic‖ category, the composition of the goods in that category, or the unit price paid for transporting them (relative to the unit price payable under open competition). 2. Quota allocation of “non-strategic” goods

Greater business efficiency results not only from direct competition but also from the mere threat of competition, particularly through the perception of ease of entry to markets and, more generally, a full sense of their contestability. The legally sanctioned oligopolies that exist in the market for transit trucking markedly reduce competition and contestability of the market, and thus its efficiency—to the detriment of economic development, particularly in the landlocked Sahelian countries, but also in West Africa as a whole. The quota rule for allocating ―non-strategic‖ freight to truckers with vehicles registered in a particular country is meant to generate a ―fair‖ distribution of freight between countries. However, doing so limits the competition that provokes cost reduction through innovation and greater technical efficiency. The study found that this rule was fully implemented on two (possibly as many as four) of the eleven corridors studied, which means that the problem is not as widespread as T&R had imagined (based on their 2007 sample). See Table 10. Nonetheless, this is a second mechanism for channeling business to unroadworthy vehicles, thus keeping them on the road and lowering the technical efficiency of national fleets.


43

Table 10: Application of non-market allocation mechanisms for transit trucking by

corridor

Quotas (1/3-2/3) Queuing:

“first come, first served”

Applied Lomé-Niamey

Cotonou-Niamey

Tema-Niamey

Lomé-Niamey

Cotonou-Niamey

Partially Lomé-Ouagadougou

Lomé-Bamako

Lomé-Ouagadougou

Cotonou-Bamako

Cotonou-Ouagadougou

Scarcely

Abidjan-Bamako

Abidjan-Ouagadougou

Tema-Bamako

Tema-Ouagadougou

Uncertain Cotonou-Bamako

Cotonou-Ouagadougou

Not applied

Abidjan-Bamako

Abidjan-Ouagadougou

Tema-Bamako

Tema-Ouagadougou

Tema-Niamey

Lomé-Bamako

3. Queuing allocation of “non-strategic” goods

The queuing system whereby national truckers’ associations allocate goods to trucks on a

―first come, first served‖ basis, rather than by allowing the freight forwarder and trucker to

conclude a deal, is a third process that puts the unroadworthy vehicle on the same footing as

the roadworthy one in the name of fairness to all truckers. The trucker with a poorly

maintained truck who would not win business easily on an open market for trucking services

only has to join the queue to eventually win a modicum of business that he would not

otherwise get. The corollary effect of this is to discourage efficient, roadworthy trucks by

making them wait as long as inefficient, unroadworthy ones in the queue, increasing the down

time of the technically efficient lorry (while decreasing the down time of the technically

inefficient lorry). In a free market, one would expect freight forwarders to prefer to give more

business to the more efficient lorry and thus raise the average efficiency of trucking. For

these reasons, a successful queuing system reduces the efficiency of national fleet—and, by

extension, of the regional fleet. Ultimately, freight forwarders in all ports studied have the

right to refuse an unroadworthy vehicle that the queuing system may throw up but, given the

high proportion of substandard vehicles in the pool, their room for maneuver is clearly limited.

In all four ports, this study found that negotiations between truckers and freight forwarders

were possible or, indeed, in some cases dominated the allocation of freight to trucks. In

Tema, for example, truckers could choose not to join the queue and, in other ports, where

queuing systems formally still dominate, there were ways round them. With one exception,

any enterprising trucker there could find a way to reduce his vehicle’s down time by striking a

deal with a freight forwarder for immediate loading. (The exception was the Cotonou-Niamey

corridor, but this was at least partly because there is a shortfall of Nigerien trucks for non-

strategic freight via Cotonou, leading to Nigerien trucks’ immediate entry into the port in the

order of arrival, i.e. without any wait associated with the queue.) See Table 10. Thus, though

the queues have not disappeared, those who wish to avoid them can often do so.

4. Possible broker bias


44

Despite findings that suggest either that T&R’s interpretation may have been too pessimistic

or that the situation improved between 2007 and 2009, it would still be better to dismantle the

queuing system, like the quota system, and let the market take over. This would channel

more regional trade to more roadworthy trucks. So far, the small-scale, informal trucker

harbors doubts that the alternative, non-queuing, market-based system he faces is stacked

against him. This is not only because he may feel that he has less market information than

the freight forwarders with whom he must conclude a deal, but also because he does not

negotiate directly with the forwarder. Instead, his negotiations take place with a broker who,

he may suspect, is colluding with the forwarder. This suspicion is reasonable because the

broker and forwarder will likely share a more sophisticated understanding of the local

marketing services, will both be based in the port, and may thus build up a cohesive

relationship over time. So the broker may favor the forwarder over the trucker in negotiations,

even though the trucker pays the forwarder’s fee. In contrast, the small-scale trucker, who

may have met neither the broker nor the forwarder before and with less knowledge of market

conditions, may feel he faces an uneven playing field and become a price taker.

5. Sale of rights to haul “non-strategic” northbound freight

If there are not enough trucks from the landlocked country at the port, the landlocked

country’s transporters’ association has to sell the right to carry this freight to a trucker with a

truck registered in another country. Why should the transporters’ association gain financially

from its transfer? This rule appears to add transport costs that are ultimately borne by the end

users of the goods transported with no justification. (The study did not record any references

to sales of rights to haul ―strategic‖ freight.)

6. Quota allocation of north-south freight

One may decry the efficiency losses due to quantitative constraints placed on the allocation of

freight destined for landlocked countries at the ports. Conversely, however, domestic

transporters’ associations in each landlocked country place a ban (i.e. zero-percent quotas)

on trucks registered in other countries picking up loads in that country. This is part of a bigger

ban on cabotage haulage for (1) export to another West African destination and (2) transit

haulage to a port for an extra-West African destination. Assuming that the exporter (or freight

forwarder) wants the best lorry for the job, limiting his choice in this way will reduce his

chances of finding it. The chances of a breakdown, a crash or a slow journey increase. Thus

this protectionist non-market allocation of freight lowers the average efficiency of north-south

road haulage along that corridor. It dissuades trucks carrying loads to landlocked countries

because they cannot get a backhaul load, thus compromising the creation of a flexible region-

wide market for trucking.

7. Sale of rights to haul non-strategic north-south freight

Alternatively, the domestic transporters’ association may allow trucks registered in another

country to pick up a southbound load but at a cost. The trucker must pay a fee to the

association for the right to haul that freight. This fee increases the haulage cost to the end

user (to whom the transporter ultimately passes on this fee), with no extra added value to the

service provided to the end user. This fee contributes to high average West African haulage

rates that make exporting from the Sahelian countries uncompetitive.

Quantification

This study did not attempt to quantify the inefficiencies of each of these distortions to

establish the advantages of a free-market allocation of haulage services. A further study

should include this measure for each corridor.


45

V-1-3 Case study: Niger

Trucking of freight to Niger seems to feature the worst examples of non-market allocation of

goods. Where they can, its transporters’ associations enforce the 1/3-2/3 quota system and

the ―first come, first served‖ queuing rule. They succeed in both Cotonou and Lomé, through

which most of Niger’s transit freight passes. Niger promotes this policy of protecting its old

trucking fleet that is too small to take advantage of its rights under the 1/3-2/3 system but

much less efficient than the fleets from Benin or Togo.28

Niger’s transporters’ associations

collect fees for each load in its 2/3 share in Cotonou and Lomé that its trucks cannot carry,

and sell rights for the carriage of such loads to truckers with trucks registered outside Niger.

In Cotonou, Benin truckers find they can undercut Nigerien truckers but they cannot win any

market share by doing so because they are limited to their maximum 1/3 share of the market.

This means that the Nigerien truckers have no incentive to improve the efficiency of their fleet

or otherwise reduce their rates, which they would have to in a competitive market. They do

not have to innovate or improve the quality of their service to retain this market share at

higher prices than the competition. Further, within Niger, the transporters’ associations

charge fees to non-Nigeriens who want to haul freight within or from Niger. Niger is the best

example of a country whose ordinary citizens, consumers of imported goods and

manufacturers using imported intermediate goods, face higher prices and whose exporters

have greater difficulty exporting to the world market than they otherwise would. Given the

extremely high costs of transport, it seems unfair to subject them to prices that are, in

addition, unnecessarily greater than they have to be.

V-1-4 The importance of the small-scale, informal-sector trucker

Probably no more than about 10% of West Africa’s trucks belong to large-scale, formal-sector

road-haulage companies that are relatively well equipped to look after themselves. The key

to increasing the efficiency of regional transit trucking lies in institutions, procedures and

techniques that will allow the atomistic haggling involving small-scale truckers to take place

more quickly, openly and fairly, generating market information that also allows others to orient

themselves in the market and change their strategies according to opportunities revealed

from price information. Institutions, procedures and techniques must simultaneously evolve

so as to provide incentives for efficient trucks to make greater profits than inefficient ones.

V-1-5 Perceptions and change

T&R show that most truckers in Burkina Faso and Ghana do not have a great sweep of vision

that allows them to see structural distortions in the trucking market as their biggest enemy.29

Instead, when interviewed, their concerns focused on short-term problems within the frame of

reference defined by the current allocation mechanisms: fuel costs, missing road links, the

road condition, high maintenance costs and vehicle costs. (Indeed, for the truckers working

with low-quality trucks, the structural distortions are positive saviors.) However, from the

policy-making point of view and from the perspective of importers and exporters, it is clear

that there is a better way of doing business. The current system is inefficient and will retard

West Africa’s economic development; governments will want to put in place a new, more

efficient system.

Any change that involves removal of the oligopolies currently in place will be revolutionary,

requiring new institutions and/or old institutions to transform themselves fundamentally. T&R

correctly identify that the important part of such a change will be socio-political. Governments

28 T&R page 53 refer to Niger’s fleet of articulated trucks that have an average age of 29 years, with operating costs

per vehicle-kilometer that are some 30% higher than the fleets from Benin or Togo, citing A. Adoléhoumé, Analyse

des Facteurs des Coûts et Prix de Transport en Afrique de l’Ouest: cas du Niger , unpublished paper, (Washington

D.C.: World Bank, 2007). 29 T&R page 87.


46

will have to renegotiate or scrap treaties; truckers and brokers would have to learn new ways

of doing business. Many truckers and staff of some institutions would lose their jobs. To

realize this would require a consultative process and a well oiled public-relations arm working

closely within a coherent, purposive, phased plan for change.

T&R propose that, governments should increase the tax on fixed costs relative to the tax on

variable costs, making trucks that can cover higher annual distances more competitive,

perhaps by transferring the fiscal burden on trucking firms from fuel to truck ownership and

registration. 30

Section II-2 demonstrates that purchases of fuel and tires represent the main

operating costs in West African trucking and that the fixed-cost ratio is low (less than 30%)

due to the low wages and the extensive use of secondhand trucks, as stated by T&R. Thus

there is ample scope for raising fixed-cost taxation. In addition, governments could also

institute a lump-sum import tax on trucks or even a proportional tax with a rate that increases

with truck age.

T&R are right to confront the unhappy truth that success in making the regional trucking

market more efficient would make some informal-sector truckers redundant.31

Those with

unroadworthy trucks would lose market share and make losses. Though Adoléhoumé has

contended that the informal sector harbors many who are incapable of doing the basic

accounting calculations that would allow them to realize that they are running at a loss, it

seems clear that, in practice, it would not take most of them very long to appreciate this if

trucking became a truly free-market activity.32

Job losses for significant numbers of truckers

risk making it politically unacceptable. Donors, regional organizations and national

governments would want to be seen to be providing compensation to some and, for others,

loans to buy improved rigs.33

At the same time, it would be desirable to take other steps to

professionalize the sector, with training for truckers (e.g. use of accounting templates so that

they could measure the profitability of their trucking operations, reading and writing for

illiterate drivers) and enforcement of technical norms (through more rigorous periodic vehicle

inspections) which would complement the migration towards purchasing higher-quality

trucks).

V-1-6 Degrees of oligopoly and constraints to the effectiveness of transport

and transit facilitation

Oligopolies use their collective market power to distort the free-market allocation of resources

in their favor. On each trucking corridor the oligopoly under study has as its core the

combination of truckers’ unions and shippers’ councils that implement allocations of freight by

quotas and queuing schemes. The oligopoly may find it useful to associate other peripheral

economic actors. This study has not sought to formally define the institutional edges of the

oligopoly.

In their section on ―Policies for West and Central Africa‖, T&R (page 90) state that ―various

transport policies and facilitation measures‖… ―have no impact on reducing transport prices‖.

In other words, they assume that West African trucking corridors suffer from perfect

oligopolies that capture all cost reductions as additional revenue. This is a ―worst case

scenario‖ position.

30 T&R pages 100–101. 31 T&R page 8. 32 A. Adoléhoumé, Politiques de Réduction des Coûts du Camionnage en Afrique Subsaharienne: Le Cas du Togo

(Université Lumière, Lyon II, 1992). 33 See Sadok Zerelli et al., West African Road Transport and Transit Facilitation Strategy, funded under an EU

transport-facilitation project (9 ACP ROC 08) for a detailed action plan for the rehabilitation of national vehicle

technical centers.


47

Although a rigid oligopoly with perfect control over the supply of transit trucking could

theoretically maximize revenue in the short and long runs, in practice a state-sanctioned

oligopoly is more likely to take into account the probability that being seen to be too greedy in

the short run would provoke a backlash and increase the chance of the disbandment of the

oligopoly. Instead, its optimal strategy would be to maximize its long-term revenue stream

and, to achieve this, it would avoid fully exploiting its power to maximize its short-term

revenue stream. The strategy would be dynamic: the oligopoly would constantly re-evaluate

the extent to which it could push the envelope of its power in the short run without

compromising its long-term goal.

The potential short-term revenue that the oligopoly surrenders results partially in a lower price

of transport, partially in greater profits accruing to actors operating outside the oligopoly, such

as (formal-sector) freight forwarders and (informal-sector) bribe-collecting uniformed services,

in accordance with elasticities of supply and demand for their services. The important point is

that not all benefits from transport and transit facilitation (TTF) activities would accrue to the

oligopoly.

Table 10 shows that of eleven trucking corridors studied, only two display evidence of full

oligopoly due to quota allocation and queuing: Lomé-Niamey and Cotonou-Niamey. The

oligopolies on these two corridors appear to have the means to implement the revenue

optimization strategy just described. On each of these corridors, it makes sense to prioritize

removal of the oligopoly before allocating resources to other TTF activities. Otherwise, the

oligopolies will be in a position to capture a large part of the benefits deriving from these

activities (though not all the benefits, contrary to T&R’s contention).

In contrast, in Table 10, the other nine corridors studied display a range of mitigated oligopoly,

with six that do not apply quotas and four that scarcely apply the ―first come, first served‖ rule.

T&R’s ―worst case scenario‖ surely does not apply to these corridors: Though the oligopolies,

such as they exist, will capture some of the benefits from TTF activities, implementation of

these activities should deliver increased efficiency. Therefore policymakers could pursue TTF

activities in parallel with disbanding, or redefining the role of, the institutions underpinning the

oligopoly: The oligopoly would not in the meantime suck up all the benefits from TTF. On

these corridors, activities could include the removal of all non-tariff barriers, such as the

numerous legal and illegal checkpoints, as well as implementation of more projects aimed at

harmonizing transit documents and procedures, connecting the customs computerized

systems, construction of joint border posts, installing ―single windows‖ in the ports, etc., in

accordance with ECOWAS’ transport and transit facilitation strategy.34

On some of the nine ―mitigated oligopoly‖ corridors, oligopoly may still be the main (though

not the overwhelming) problem. However, the current report did not quantify the different

constraints to corridor performance and is not in a position to rank order them. Establishing

the hierarchy of constraints to target is the next step in helping policymakers prioritize action

on these corridors. (See Chapter VI.)

34 See ECOWAS Transport and Transit Facilitation Strategy document developed under EU project Ref. 9

ACP.ROC.008 and validated during Abuja workshop in December 2008.


48

V-2 Recommendations

The study finds that blatant inefficiencies, stemming from the transit oligopolies that T&R

identified, remain in place, undermining the benefits from investments made to reduce the

cost of trucking along these corridors. The oligopolies—and the inefficiencies they

engender—constitute an unnecessary brake on the rate of growth of exports from, and

imports to, the Sahelian countries and they hinder regional integration. They should be

dismantled.

To achieve this, pairs of countries could renegotiate their agreements under IST piecemeal.

However, wholesale revision of ECOWAS’ Inter-State Road Transportation Convention would

more efficiently liberate West African trucking. The goal is a free market in trucking services

across the ECOWAS states, without quotas on transit trucking, without ―first come, first

served‖ rules in ports, and without limits on cabotage trucking in any West African country.

Necessary accompanying measures are efficient brokerage to allocate freight (and not just

transit freight) to trucks, increased professionalism among truckers and drivers, and (though

tax changes were proposed by T&R) more technically efficient trucks. In addition, as T&R

recommend, mitigating measures will likely be necessary to compensate those inefficient

truckers unable to compete successfully in a more efficient trucking sector.

Policymakers should act urgently to dismantle oligopolies on corridors that the current study

shows to harbour effective oligopolies. In these cases, disbandment or reorientation of the

institutions underpinning the oligopoly should be policymakers’ priority to the exclusion of

other transport & transit reforms. Otherwise, the oligopolies may swallow the benefits

generated by the other transport and transit facilitation activities, just as T&R contend. Other

corridors would also benefit from reform to remove their partial oligopolies but, on these

corridors, the threat of the oligopolies capturing the benefits of other measures is smaller, so

the need to eliminate them may not be the priority. A further study should quantify priorities

by corridor.

Where an oligopoly does not dominate a corridor’s inefficiencies, other policy changes will

lead to greater efficiency. Besides the removal of the quotas and queuing systems in all West

African ports, the consultant recommends the removal of all non-tariff barriers like the

numerous legal and illegal checkpoints as well as the implementation of more transport and

transit facilitation projects aimed at harmonizing transit documents and procedures,

connecting the customs computerized systems, construction of joint border posts, installing

―single windows‖ in the ports etc.


49

VI FURTHER STUDIES

The study did not collect data necessary to construct measures of market performance.

Therefore it makes recommendations for clarification of certain points, for systematic

quantitative analysis, and for developing in detail the policy measures that it confirms are

essential to improve trucking efficiency. In particular, it recommends further study of each

corridor studied in order to establish:

Quantitative and institutional analysis

1. How different landlocked countries define ―strategic freight‖ and whether coastal/transit countries have to agree to the landlocked countries’ definitions?

2. The proportion and the tonnage of ―strategic freight‖ a. travelling along each corridor b. allocated to non-national carriers

3. The proportion of the residual ―non-strategic‖ freight: a. carried by an importer’s own trucks b. going to each landlocked and coastal country c. allocated by quota, via brokers, or by other (specified) means

4. Whether the haulage rates for these different allocation mechanisms differ 5. The precise parameters of the regulation of freight haulage in the landlocked countries by

trucks registered in coastal/transit countries 6. More clearly the motivations and capacities of the different economic actors 7. The likely winners and losers by corridor and country (importers, exporters, consumers,

landlocked-country better-quality trucks, poorer-quality trucks) 8. The necessary changes to bilateral and regional treaties to enable market-based change 9. The impact of the changing context due to the imposition of axle-weight controls in additional

countries in 2010 (described below). On the basis of this information (and possibly as a second phase):

Policy development

10. Estimate the economic losses due to each oligopoly, map out the incentive structures that sustain each, and indicate alternative ways of reducing/eliminating each

11. Draw up phased plans for: a. a new electronic market-based freight-allocation system and its implementation (outlined

below) b. new bilateral and regional treaties to provide the legal basis for such a system c. solutions proposed by T&R to upgrade the regional fleet:

o a scheme to compensate truckers who would no longer be competitive o a new fiscal incentive system that would increase the tax on fixed costs relative to the

tax on variable costs, making trucks that can cover higher annual distances more competitive, perhaps by transferring the fiscal burden on trucking firms from fuel to truck ownership and registration.

12. Define, and estimate the cost of, any other necessary accompanying measures, such as: o a compensation plan for truckers losing their livelihoods o a consultative public-relations and advocacy plan to complement the more technical

aspects of implementation. Two of these recommendations deserve more detailed explanation:

1. CONTROL FOR BIG CHANGES DUE TO AXLE-WEIGHT CONTROLS—Tackling the important issue of structural distortion of the trucking market takes place against the backdrop of the biggest change in trucking rates and trucking capacity in living memory. In 2009, Ghana, Mali and Niger implemented axle-weight limits on trucking to counter the overloading that ruins roads and causes accidents. This has had the effect of reducing the carrying capacity of individual trucks and of the regional fleet as a whole. At least in the short term, the increased scarcity of trucking capacity has made even the least roadworthy trucks more valuable. This is awkward when the official policy position emphasizes removing less roadworthy trucks from the road. T&R had found evidence for an overhang of trucking


50

capacity during their 2007 field work but recent axle-weight controls have removed a lot of this. In 2010, Benin, Burkina Faso, Côte d’Ivoire and Togo will implement these controls and the effective trucking capacity will shrink further, perhaps leading to an absolute shortage in some seasons on some corridors. Further, trucking rates rose by over 25% in 2009 and are set to rise again in 2010 when the other countries fall into line. In the quantitative analysis recommended above it will be important to control for this effect.

2. DEVELOP A PILOT ELECTRONIC CLEARING HOUSE—Informal-sector truckers along certain corridors already circumvent the queuing mechanism through broker-mediated negotiation with freight forwarders. However, they often suspect collusion between broker and forwarder. Various forward-thinking actors have suggested that ports develop electronic clearing houses for allocating transit freight to trucks. This transparent system would make available information about freight and trucks along each corridor and, further, would provide a service matching freight forwarders and truckers and, eventually, a clearing function. It would be faster than the queuing system and cheaper and less open to accusations of bias than one-to-one negotiations through brokers. Truckers’ associations would play a role in advising their members on prevailing rates and in entering their details into the system. Simultaneously, resources would go to providing professional training for existing brokers, who would have to find a role within this system or compete against it: bespoke brokers might provide better service in niche areas.


51

APPENDICES

Appendix 1: Terms of reference

Appraisal of the structure of the trucking market in West Africa

Background

Under the USAID-funded West Africa Trade Hub phase 2, CARANA Corporation is supporting

the Africa Growth and Competitive Initiative and the Global Food Security Response under

Result 3A: Transport Infrastructure, in order to increase the ability of exporters to reach

markets, including seaports, as effectively and efficiently as possible. The Infrastructure

Program under the Trade Hub phase 2 aims to improve transport services by identifying

impediments to truck transport throughout the region, but especially along the main trucking

routes, and then to work with private-sector coalitions and civil-society groups—as well as

with the Economic Community of West African States (ECOWAS) and the Union Economique

et Monétaire Ouest Africaine (UEMOA)—to reduce such impediments. The goal is to increase

administrative and logistical efficiency and along priority corridors and to promote investment

that will further promote corridor efficiency to reduce export costs and make West Africa more

competitive in world markets.

Through its Transport Infrastructure component, the Trade Hub aims to reduce the costs of

transport, port operations and transit for exporters from landlocked West African countries.

Through its Reduced Road Transport Costs (RRTC) initiative, the Trade Hub will support a

private-sector advocacy campaign through which formal-sector private-sector stakeholders

will present a package of reforms to government. To support this process, the Trade Hub will

conduct studies along priority corridors to identify bottlenecks and propose solutions, facilitate

the creation of private-sector stakeholder coalitions around the proposed solutions, sensitize

government to the proposed solutions, and facilitate discussions between the private and

public sectors to achieve appropriate changes in policy and implementation of policy. Where

bottlenecks result from private-sector inefficiencies, the Trade Hub will facilitate business

linkages between stakeholders concerned and logistics companies that should be able to

reduce costs.

A recent World Bank report purports to undermine the rationale for the work of the Transport

Infrastructure and, indeed, for most ongoing attempts in West Arica to improve trucking

efficiency. The authors, Teravaninthorn & Raballand, argue that West Africa has relatively low

trucking costs but that the price of trucking to shippers exceeds that cost by a margin that

suggests rent-seeking. They explain that a set of freight-sharing rules for the port-Sahel

routes largely explain the observed inefficiency. Unless governments rectify this oligopolistic

distortion of market structure all attempts to reduce West African trucking costs will merely

add to the oligopolistic rents that truckers are reaping. See Appendix 2 for a summary of the

article, with conclusions for the Trade Hub’s Transport Infrastructure component.

The purpose of this consultancy is to test these findings and, if they hold, evaluate the

authors’ recommendations.

Tasks

The consultant will:

1. Establish the extent to which the freight-sharing rules implemented by freight bureaus

that allocate cargo between coastal and Sahelian countries (or other formal or

informal institutions) distort the market to the extent to which Teravaninthorn &

Raballand describe.


52

2. Test alternative hypotheses of inefficiency for long-distance trucking in West Africa.

3. Draw conclusions by corridor and across corridors and, to the extent necessary,

make recommendations for improvements.

The consultant will undertake this analysis on the following corridors:

-Tema

-Lomé

-Cotonou

-Abidjan

-Dakar

Experience and qualifications

1. Graduate degree in the socio-economics

2. At least 15 years’ experience in economic analysis

3. Good written and spoken French and English

4. Knowledge of West Africa’s formal and informal private-sector institutions

5. Familiarity with the road-transport sector

6. Clear writing ability

7. Ability and willingness to travel in West Africa.

Operational details and working relationships

The consultant will spend a day’s orientation at the offices of the West Africa Trade Hub in

Accra, Ghana; three weeks in the field (principally in the five ports listed above), liaising with

Trade Hub staff by phone and e-mail as s/he conducts interviews and collects data, eight

days in the Trade Hub office to write a draft report and make a presentation to USAID/West

Africa on the findings, and three days at his/her base to complete the report. S/he will report

to the Trade Hub’s Transport Adviser.

The consultant will provide a written report that meets the description of this consultancy in

Microsoft Word software and prepare a presentation for USAID in Microsoft PowerPoint™

software. S/he will take digital photographs to illustrate the report and will provide full-

resolution copies of all photographs taken to the Transport Adviser.


53

Appendix 2: Summary of Supee Teravaninthorn & Gaël

Raballand’s 2008 World Bank report “Transport prices

and costs in Africa: a review of the main international

corridors”

Trucking costs along the Tema-Ouagadougou corridor are not much higher than global

norms. However, end users of trucking services pay prices exceeding those costs by a

margin that suggests rent-seeking. Teravaninthorn & Raballand explain the disconnect

between prices and costs in terms of restrictive practices and cartels that limit trucking

competitiveness and raise prices. Further, they explain how restrictive practices and cartels

limit the efficiency and quality of trucking services offered. They suggest that this

phenomenon characterizes most West African trucking services.

They identify the cause of the observed inefficiency as a set of freight-sharing rules between

coastal and Sahelian countries in West Africa, coupled with freight bureaus that allocate

freight to trucks using a queuing system that circumvents direct contracting between shippers

and trucking firms. The monopoly on the allocation of freight has several negative effects.

First, it provides an incentive for older, poorly maintained trucks to remain in service because

they only have to wait at the port like their competitors to get a cargo. In a more competitive

environment, newer, better maintained trucks would outcompete them, but the queuing

system puts them on an equal footing with their rivals. In this context, modern, well

maintained trucks cannot realize their potential. Second, the incentive for older, poorly

maintained trucks to remain economically active results in an oversupply of trucks on the

market. Without this support, owners would scrap them. Third, the oversupply and increased

waiting times at the port mean that rotation times between the port and the Sahelian

destination are increased. The additional downtime reduces the distance covered annually

and thus trucking efficiency. Fourth, to counter the low distance covered annually, firms tend

to overload their trucks. The old, poorly maintained, overloaded trucks have a greater

propensity to break down, have accidents, pollute and—most importantly—degrade the

roads. The slow, irregular progress of these trucks yields a poor service to shippers. The

accidents, pollution and road degradation are negative externalities, sometimes with very high

social cost. Fifth, the queuing process encourages bribery in order to skip the queue; and

overloading and contravention of road-safety regulations leave drivers open to extortion by

the police. Limited competition, poor service, high transport prices and compromised

governance result.

The system is self-perpetuating through a set of informal-sector incentives. Drivers pay

bribes to agents of the organizations overseeing the monopoly to allow their trucks to jump

the queue. The shipper benefits from the extra tons of freight loaded beyond legal limits but

not declared to customs at the border between the coastal and landlocked country. He

rewards the shipping agent accordingly. The shipping agent gives additional cash incentives

to the truck driver who, in turn, pays bribes to police and customs officers to ensure that the

overloaded truck and the under-declared cargo reach their destination without detention or

official fines. Trucking company staff ignore overloading if it does not significantly damage the

truck.35

The West African system generates prices to end users of transport services that significantly

exceed costs. Teravaninthorn & Raballand argue that, without increased competition, any

improvements to transport infrastructure will not result in lowered prices but rather in

increased profits to the parties involved. As part of their analysis, they note that a reduction of

road-transport bribery of 20% would decrease transport costs by only 1%. Similarly, a 20% 35 T&R pages 56-57.


54

reduction in border-crossing time would decrease transport costs by only 1%. These findings

undermine the justification for the Trade Hub’s Improved Road Transport Governance work

requested by UEMOA (and, in the case of the border-crossing time, for the €35 million that

the European Development Fund intends to spend on joint border posts). At a much greater

cost to the public purse, rehabilitation of infrastructure from ―fair‖ to ―good‖ would result in a

5% reduction in transport costs and a 20% reduction in fuel prices would yield a 9% reduction.

However, Teravaninthorn & Raballand’s basic point is that—under the present inefficient

system—even these gains would accrue as increased profits to transport-sector operators:

―beneficiaries‖ of transport services would not benefit significantly from any of these efforts.

Therefore, before governments significantly reduce restrictive practices, there is no economic

justification for any other improvements. This argument negates the Trade Hub’s direct

approach of seeking to attain its Transport Infrastructure results of promoting streamlined

government procedures and increased investment to improve corridor performance, without

first ensuring that the sectoral structure changes to make trucking behavior competitive and

thus improve its efficiency.

Teravaninthorn & Raballand make two recommendations. First, governments should

dismantle the institutional mechanisms that promote queuing, rather than free-market

contracting. They note that deregulating the trucking sector is more a socio-political issue

than a technical issue and that there is a case for mitigating the losses to inefficient truckers

that would result from their going out of business as a result. Second, governments should

increase the tax on fixed costs relative to the tax on variable costs, making trucks that can

cover higher annual distances more competitive, perhaps by transferring the fiscal burden on

trucking firms from fuel to truck ownership and registration. In addition, governments could

also institute a lump-sum import tax on trucks or even a proportional tax with a rate that

increases with truck age.


55

Appendix 3: Questionnaire for transport operators’ interviews

Appraisal of the structure

of the trucking market in West Africa

Questionnaire N°:………

Corridor: From: ……………To: ……………………..

Day:

Time:

City:

Administration/Firm/Union:

Name of the person interviewed:

Function at the Administration/Firm/Union:

Tel:

E-mail:


56

I-Adaptation of the market transport supply and demand: Is there a market

supply overcapacity?

Yes for all products and seasons

Yes for some products (Which?)

Yes during some periods of the year (When?)

No for all products and periods

Have no idea

Arguments justifying the answer:


57

II-Are the transport prices freely fixed by the market?





Have no idea



58

III-Is the 1/3-2/3 transport quota rule effectively implemented?





Have no idea



59

IV-Is the trucks’ loading system based on a queuing system (tour de rôle)?





Have no idea



60

V-Do transport prices cover the transport costs for most transporters?





Have no idea



61

VI-Is the transporters profit margin?

Important for all products and all periods

Important for some products (Which?)

Important during some periods of the year (When?)

Low for all products and all periods

Low for some products (Which?)

Low during some periods of the year (When?)

Negative for all products and all periods

Negative for some products (Which?)

Negative during some periods of the year (When?)

Random

Have no answer



62

Appendix 4: Data-collection sheets for financial and technical

details of operating trucks

Corridor: From ………………………..to ……………………..

General data Observations

Corridor length in km

Transporter name

Nationality

Type of transporter (firm/individual)

Number of hours waiting outside the port

Number of hours waiting inside the port

Vehicle characteristics

Capacity in tonnes or M3

Type of vehicle when purchased

(new/second hand)

Age of the vehicle

Number of tires

Transport flows

Merchandise transported on the way to

the port

Tonnage transported on the way to the

port

Merchandise transported from the port

Tonnage transported from the port

Average number of trips per year

Average annual number of kms

Average tonnage per W/R trip

Average tonnage per year

Observations:


63

ESTIMATION OF TRANSPORT COSTS AND PRICES IN FCFA

Fixed annual costs (in FCFA) Observations

Depreciation

Financial interests

Vehicle insurance

Merchandise Insurance

Wages

Taxes and formal payments

General management costs

Total of fixed costs

Fixed costs per W/R trip

Fixed costs per km

Fixed costs per tonne transported

Variable Costs by W/R trip (in FCFA)

Fuel

Lubricant

Tires

Maintenance and repairs

Road expenses

Formal payment for loading

Informal payment for loading Informal payments at the legal and illegal

checkpoints Total variable costs per W/R trip

Total variable costs per year

Total variable costs per km

Total variable costs per tonne

Total transport costs (in FCFA)

Per km

Per tonne

Per container of 22 tonnes

Per W/R trip

Transport price

Per km

Per tonne

Per container of 22 tonnes Per W/R trip

Profit or loss margins (in FCFA)

Per W/R trip

Per km

Per tonne

Per container of 22 tonnes


64

Appendix 5: Calculation of trucking operating costs

Table III-1: Corridor: Lomé-Niamey Transporter: Mr. Alkassoum (informal, Nigerien)

Loading capacity: 25T

Type of vehicle: 4 axles, second hand

Transport cost in FCFA per roundtrip (10 per year - return empty)

Per year

(FCFA)

Per roundtrip

(24 per year) in

FCFA

% of total

cost

Depreciation 0 0 0%

Financial interests 0 0 0%

Vehicle insurance 350,000 14,583 1%

Wages 720,000 30,000 2%

Taxes 390,000 16,250 1%

Management expenses 0 0 0%

Total fixed costs 1,460,000 60,833 5%

Fuel 600,000 44%

Lubricants 25,000 2%

Tires 231,000 17%

Repair and maintenance 150,000 11%

Road expenses 0 0%

Formal payments for loading 85,000 6%

Informal payments for loading 0 0%

Informal payments at checkpoints 200,000 15%

Total variable costs 1,291,000 95%

Total costs per roundtrip 1,351,833 100%

Transport cost per km 917 Profit margin

Price per km 1,019 11%

Profit margin per km 102

Transport cost per roundtrip 912,020

Price per one-way trip 1,080,140 18%

Profit margin 168,120 Source: Interview


65

Table III-2: Corridor: Cotonou-Niamey

Transporter: SITT-Benin

Loading capacity: 25T

Type of vehicle: second hand

Transport cost in FCFA per roundtrip (24 per year - return empty)

Per Year in

FCFA

Per Roundtrip

(24 per year)in

FCFA

% of total

cost

Depreciation 3,572,794 148,866 11%

Financial interests 1,799,730 74,989 6%

Vehicle insurance 256,021 10,668 1%

Wages 8,882,080 370,087 28%

Taxes 355,283 14,803 1%

Management expenses 1,800,000 75,000 6%

Total fixed costs 16,665,908 694,413 53%

Fuel 430,000 33%

Lubricants 35,000 3%

Tires 25,000 2%

Repair and Maintenance 36,350 3%

Road expenses 43,000 3%

Formal payments for loading 35,500 3%

Informal payments for loading 5,000 0%

Informal payments at checkpoints 15,000 1%

Total variable costs 624,850 47%

Total costs per roundtrip 1,319,262 100%36 Source: Interview

36

Note that rounding of individual percentages to nearest whole takes aggregate total to 101%.


66

Table III-3: Vehicle operation costs in 2007

(Five-axle vehicle with 35T official loading capacity)

(FCFA per Vehicle kilometer)

Transporter 1

(Benin)

Transporter 2

(Niger)

Transporter 3

(Togo)

Fixed Costs

Depreciation 17,14 75,57 30

Financial interests 0 0 0

Vehicle insurance 3,79 12,12 7,14

Goods insurance 0 0 0

Wages 61,86 41,67 14,29

Management costs 47,13 62,05 47,78

Tax 3,47 20,45 7,4

Total fixed costs 133,39 211,86 106,61

Variable costs

Fuel 220,91 157,7 240

Lubricants 9,24 12,6 5,63

Tires 60,61 137,37 103,62

Maintenance and repair 53,74 151,52 29,76

Road expenses 40,59 11,48 40

Total variable costs 385,09 470,67 419,01

Operation cost per Veh-km 518,48 682,53 525,62

Operation cost per T-km

Average loading: 35T 29,63 39 30,04

Average loading: 40T 25,99 34,21 26,35

Average loading: 45T 23,03 30,33 23,36

Average price (FCFA/T-km) 29,09 30,91 28

Source: SITRASS : Analyse des facteurs de coûts et prix de transport en Afrique de l’Ouest : cas du Niger -

Rapport final - Sept. 2007 (page 45)


67

Table III-4: Estimation du côut d'exploitation

d'un ensemble articulé (55 M3 de capacité ou 47 tonnes de charge utile)

Transport international sur le corridor Abidjan-Bamako

DONNEES DE

BASE

DETAILS DE

CALCUL

% du

coût

total

Prix TTC

Pays Mali

(FCFA/Km)

Type de route Route revêtue

en moyen état Coûts fixes

Catégorie de

véhicule

Ensemble

articulé Amortissement 144,00 13%

Conditions

économiques mars-09 Frais financiers 80,00 7%

Assurances

véhicule 8,00 1%

Caractéristiques

du véhicule

Assurances

marchandises 18,00 2%

Salaires et

charges salariales 31,61 3%

Etat du véhicule à

l'achat

Véhicule

d'occasion

Taxes et droits

divers 16,70 1%

Marque et type 0%

Carburant utilisé Gas-oil Total coûts fixes 298,31 27%

Capacité (charge

utile) 47 Tonnes 0%

Nombre total de

pneus 24 22+2 0%

0%

Eléments

financiers Unité Prix TTC Coûts variables 0%

Carburant 327,00 29%

Prix du véhicule

avec pneus (FCFA) 80 000 000 Lubrifiants 7,00 1%

Prix d'un pneu

neuf (FCFA) 425 000 Pneumatiques 279,29 25%

Entretien et

réparation 50,00 4%

Prix du carburant (FCFA/litre) 545 Frais de route 52,50 5%

Prix des lubrifiants (FCFA/litre) 1 000 0%

Assurances

véhicule (FCFA/an) 800 000

Total Coûts

variables 715,79 64%

Assurances

marchandises (FCFA/an) 1800 000 0%

Salaires équipage (FCFA/mois) 250 000 Frais Généraux 101,41 9%

Charges salariales (FCFA/an) 161 000 0%


68

Frais de route (*) (FCFA/an) 5 250 000

Coût

d'exploitation

du véhicule

1115,51 100%

Taxes et droits

divers (**) (FCFA/an) 1 670 000

COUT DE

REVIENT A LA

TONNE-

KILOMETRE

Conditions

d'exploitation Unité

(FCFA/T-

Km)

Ratio

chauffeur/véhicule 1,00

Taux de

chargement

moyen

80% 29,67

Durée de vie du

véhicule (***) (années) 5 Aller-Retour 90% 26,37

Kilométrage

annuel (km/an) 100 000 100% 23,73

Durée de vie train

de pneus neufs (km) 35 000 120% 19,78

125% 18,98

Kms parcourus

entre deux

vidanges

(km) 4 000 Tarifs pratiqués

Consommation de

carburant

(litres/100

km) 60

(FCFA/T-

Km)

Consommation de

lubrifiants

(litres/vidange) 28 Divers 30,15

Entretien et

réparation (FCFA/an) 5000 000 liaison routière:

Frais généraux (% autres

coûts) 10,0% Abidjan-Bamako 1 225 km

Frais financiers

sur le capital

investi

(%/an) 10,0%

- en

conventionnel, la

tonne

32

000 FCFA 26,12

Valeur résiduelle

du véhicule

(% prix du

véhicule) 10,0%

- par conteneur

de 22 tonnes

900

000

FCFA 33,40

Source: Sur la

base

d'informations

fournies par les

transporteurs

routiers

(*) Frais de route (350 000 FCFA/voyage), y compris séjour équipage, frais d'escorte et perceptions

informelles.

(**) taxes et droits pris en compte: TTR (280 000 FCFA/an), droits de visite technique (40 000FCFA/an),

PEAGE (10 000 FCFA/voyage)et taxe de stationnement à Abidjan (5 000 FCFA/jour).

(***) période séparant deux grosses opérations de remise en état complète du véhicule.


69

Lomé-Niamey: 2nd-hand truck, 25T capacity;

informal sector: costs as % of total

5%

95%

0%

20%

40%

60%

80%

100%

Dep

reci

atio

n

Finan

cial

inte

rest

Man

agem

ent e

xpen

ses

Veh

icle

insu

rance

Taxes

Wag

es

TOTA

L FI

XED

COSTS

Info

rmel

pay

men

ts fo

r loa

ding

Roa

d exp

ense

s

Lubric

ants

Formal

pay

men

ts fo

r lo

adin

g

Rep

air a

nd mai

nten

ance

Info

rmel

pay

men

ts a

t chec

kpoin

ts

Tires

Fuel

TOTA

L VA

RIA

BLE

COSTS

Cotonou-Niamey: 2nd-hand truck, 25T

capacity; formal sector: costs as % of total

0%

20%

40%

60%

Veh

icle

insu

rance

Taxes

Finan

acia

l inte

rest

Man

agem

ent e

xpen

ses

Dep

reci

atio

n

Wag

es

TOTA

L FI

XED

COSTS

Info

rmal

pay

men

ts fo

r loa

ding

Info

rmal

pay

men

ts a

t chec

kpoin

ts

Tires

Lubric

ants

Formal

pay

men

ts fo

r lo

adin

g

Rep

air &

mai

ntena

nce

Roa

d exp

ense

sFuel

TOTA

L VA

RIA

BLE

COSTS

Cotonou/Lomé-Niamey: 35T

capacity; various nationalities:

costs as % of total

0%

20%

40%

60%

80%

100%

Benin Niger Togo

Total variable costs

Total f ixed costs

Abidjan-Bamako; 47T capacity:

costs as % of total

0%

20%

40%

60%

80%

Veh

icle

insu

rance Tax

Goods

insu

rance

Wag

es

Finan

cial

inte

rest

Man

agem

ent c

osts

Dep

reci

atio

n

TOTA

L FI

XED

COSTS

Lubric

ants

Rep

air &

mai

ntena

nce

Roa

d exp

ense

s

Tires

Fuel

TOTA

L VA

RIA

BLE

COSTS

Figure 11: Cotonou-Niamey: 2nd-hand truck,

25T capacity; formal sector: cost as % of

total

Figure 12: Cotonou/Lomé-Niamey: 35T

capacity; various nationalities: costs as % of

total

Figure 13: Abidjan-Bamako; 47T capacity:

costs as % of total

Figure 10: Niamey: 2nd-hand truck, 25T

capacity; informal sector: costs as % of total

Documents

TRUCKING TO WEST AFRICA’S LANDLOCKED …...landlocked countries, in order to draw conclusions and make recommendations to policy makers, the private sector and donors. Methodology