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The Cost of Being Landlocked

Table 4.3

Comparison between the Four Possible Trading Routes for Malawi Beira

Nacala

Main transport mode Infrastructure condition Port reliability Delay in the port Transit time by road or train Main product for export

Road Good/fair Medium 2 weeks 2–3 days

Railway Poor Low 3 weeks or more Unpredictable

Road Good High 1 day 1 week

Durban

Dar-es-Salaam Road Good to fair Medium 4 weeks

Tobacco

Sugar

Limited

Distance

900 km

1,000 km

Nontraditional commodities (for example, garments, tea, tobacco) 2,300 km

2,000 km

Source: World Bank 2009b.

through Durban is more reliable, it is also the most expensive. However, the Nacala (Mozambique) option, with its railway system, is the cheapest route to the sea, but it is also the least reliable. Currently, the rising costs and the unreliability of the Nacala route may have reinforced the reputation of the Beira (Mozambique) route as the most affordable gateway for imports and exports, despite its dredging problems and lack of reliability compared to the port of Durban. Dar-es-Salaam is an expensive route compared to the Mozambican routes because of its distance and reliability.

Backward Links: The Logistics of Inputs In the case of processed or manufactured goods, the logistics of imports is correlated to production costs and export competitiveness. An inefficient logistics system will impose a double penalty on exporters, with additional costs on their inputs on top of the problems they may face on the export side. This, among other constraints in their business environment, seriously reduces what LLDCs can actually produce for international or regional markets. The dependence on inputs imported through unfriendly trade corridors leads not only to additional transportation costs but also to exponentially rising costs of production inventories. Obviously, more sophisticated production systems lead to more complex inventory management; the incurred costs to hedge uncertainty over the import lead time also increase. This increase puts such producers at a radical disadvantage compared with producers close to their suppliers, especially when competing in the same

The Cost of Being Landlocked  

This book proposes a new analytical framework to interpret and model the constraints faced by logistics chains in landlocked countries. The...

The Cost of Being Landlocked  

This book proposes a new analytical framework to interpret and model the constraints faced by logistics chains in landlocked countries. The...