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Connecting Landlocked Developing Countries to Markets
off-dock facilities) over the movement of goods for consumption in the transit country. Depending on the breakdown of imported and exported commodities, port or rail operators may be biased in favor of volume at the expense of small loads going to the LLDC. This is especially true for railways, which tend to favor slow, bulk business at the expense of unitized (container) cargo. Importers have country-specific markets, which fall into two categories: • Traditional trading networks, which tend to dominate the imports of food and consumer goods in developing countries, are small or large local family-owned wholesalers and retailers. Typically they are driven by price more than quality and look for savings in terms of transportation costs; they may also be less inclined to comply with regulations, pay duties, or enforce good business practices. • Importers that are part of a global value chain are regional or international companies involved in production (for the regional market or exports to overseas) or distribution (for example, chains of supermarkets such as Shoprite supermarkets in southern and eastern Africa). This group is bound by corporate compliance standards and is more sensitive to quality of production and services. The latter groups also have incentives to optimize sourcing and production at the subregional level, hence a strong interest in corridor facilitation. In 2009, one group of leading multinational manufacturers of consumer goods entered into a joint project with the World Bank to improve corridors in West Africa. Today, delays mean that goods should be imported instead of being produced in several complementary plants based in the regions and serving several countries. Exporters are the group with the most interest in corridor performance, especially when they deal with value-added and time-sensitive commodities. Most LLDCs export bulk commodities that are not timesensitive—for which price of transportation may capture a significant part of the margin, especially of the free on board price—compared to a would-be competitor in the transit countries. However, the few exporters of manufactured or time-sensitive goods are the ones most constrained by logistics performance and are willing to pay a premium for quality and reliability (see table 3.1). Traders in transit countries in theory might not be adverse to the development of competing trade from their landlocked neighbors. In fact, there is no evidence of significant hostility of the private sector in transit