Managing Trade Corridors
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Box 8.2
FastPath Shows Corridor Performance Strengths and Weaknesses Originally developed for USAID, FastPath software has now been used in assessments of more than 20 trade corridors, usually as a component of a broader corridor analysis. Two of these assessments were of corridors in the ASEAN (Association of Southeast Asian Nations) region, while another was for the Maputo Corridor in southern Africa. For ASEAN, the two corridors analyzed were Vientiane, the Lao People’s Democratic Republic, to Laem Chabang, Thailand, and Danang, Vietnam, to Mukdahan, Thailand, via Savanakhet, Lao PDR. The FastPath analysis showed where each corridor performed well (generally at the ports), not so well (at the border crossings), and poorly (trucking services). A more detailed analyses behind these broad findings made it possible to specify and evaluate various remedies to overcome the corridor weaknesses. Further, an ASEAN logistics strategy was designed, on the basis of assessments of the performance on the corridor of seven sectors—customs and other inspection agencies, ports and maritime transport, rail transport, road transport, inland waterways transport, air transport, and logistics services. FastPath was also the main analytical tool used in the USAID support for the Maputo Corridor that links Mozambique, South Africa, and Swaziland. The FastPath analysis was not at quite the same detail level as for ASEAN but was still able to identify the components of the corridor that most merited attention. One of the main findings was that the imbalance between imports and exports was a main constraining factor for corridor performance, with the cost of repositioning empty containers largely offsetting the competiveness of the port of Maputo. Time spent at border crossings made up only about 6 percent of the total, while the cost of border crossings was about 8 percent of the total land cost. The percentage variability in border crossing time (58 percent) was only about one-fifth of that of the port and land transport time variabilities (together, about 240 percent). Cost rather than transit time was found to be the main source of competitive disadvantage. FastPath is an ambitious tool (much beyond what is normally included in a toolkit), and a full application for any corridor requires the entry of a relatively large amount of data compared to the UNESCAP method or the total logistics costs concept, and its outputs are similar to what is proposed in this chapter. Source: Authors based on Nathan Associates (http://www.nathaninc.com) and USAID 2007, 2008.