Freight Forwarders – a Supply Chain perspective.

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The Enabling Trade Index

Numerous recent studies have addressed the issues of international trade, and logistics, namely: The world is flat, Borderless World, The Death of Distance, and Connecting to Compete – Trade Logistics in Global Economy. The Global Enabling Trade Report , a World Bank publication, takes a close look at a number of international trade indicators, and develops the Enabling Trade Index. ETI addresses a number of factors crucial to international trade enabling, with special emphasis on logistics operations, and import procedures.
The discussion on freight forwarders in the Western coast of Africa, can benefit from analogy to the ‘law of one price’, used by the Global Enabling Trade Report 2008. Based on the ‘one price’ principles, similar goods or services should have similar prices regardless of Identifying the bottlenecks in Freight Forwarding in West Coast Africa by Berrada and Ciro where they are sold, or made available. When referring to the case of Freight Forwarder services in the western coast of Africa, it is primarily the case of inclusion of costs that are ‘not tradable’, such as induced costs, as a result of overregulation, failures within customs procedures, long transit times, overly-priced transport rates, etc. “Clark, Dollar, and Micco (2004) found that for most Latin American countries, transport costs are a greater barrier to US market than import tariffs. […] Improving the efficiency of a port from the 25th to the 75th percentile, in this specific case, reduces shipping costs by 12 percent” (Lawrence et al, 2008: 4). They also found out that, having inefficient and ineffective ports is equivalent to being 60 percent further away from the markets. (Lawrence et al, 2008)
The Global Enabling Trade Report (2008), has developed an index – The Enabling Trade Index (ETI), in an attempt to capture the various elements that contribute to high costs:
• Formal border barriers – used to measure ‘the policy and cultural framework friendliness’ of the country (Lawrence et al, 2008:7).
• Border administration – this metric aims to identify the level of facilitation provided by the administration at the border (Lawrence et al, 2008)
• Transport and communications infrastructure – this metric examines if the country has the transport and communications infrastructure capabilities to facilitate the movement of goods to the point of destination. (Lawrence et al, 2008)
• “Regulatory and security measures that affect the business environment. – assesses the set of regulations in its entirety impacting the transport business in the country” (Lawrence et al, 2008:7).
Similarly to the Logistics Performance Index, the Global Enabling Trade Index divides such costs into: pecuniary – to include trade duties and payments for services such as transportation, communications and security, and non-pecuniary – any cost in the form of additional time required to obtain information, transport products, obtain necessary clearance and documentation and costs associated to losses.
Further, the role of border procedures cannot be overlooked when discussing the challenges Freight Forwarders encounter in the west coast of Africa. Such procedures, can at times constitute barriers; in the form of tariffs, quotas, over-regulation, bureaucratic steps, and as such, can be seen as imposed by the government. “These types of barriers are especially significant in some developing countries, such is the case of west coast African countries” (Lawrence et al  2008).
The role of the border is primarily associated to the customs procedures. In a study by GETR (2008) it has been estimated, that each day taken to clear through customs is the equivalent of a 0.8 percent tariff. (Lawrence et al, 2008) Inefficiencies at the border, whether through administration, procedures, or other types of constraints hinder both exports and imports (Lawrence et al, 2008). Sadikov (2007) focused on the bottleneck effects of each extra signature to be collected prior to an export procedure; he found that each such signature reduces aggregate exports by 4.2 percent. The financial implication of an extra signature can also be expressed as “equivalent to raising importer’s tariff by 5 percentage points” (Lawrence et al, 2008:4).
The activity of freight forwarders however, is not only conditioned by transport, and border procedures alone; “institutional quality encompasses government effectiveness, regulatory quality conIdentifying the bottlenecks in Freight Forwarding in West Coast Africa by Berrada and Ciro trol of corruption, and rule of law” (Lawrence et al, 2008:5), all of which can result in positive or negative cost and time related figures of a freight forwarding procedure.
“The Enabling Trade Index (ETI) was developed within the context of the World Economic Forum’s Industry Partnership Program for the Logistics and Transport sector” (Lawrence et al, 2008:7). The Index was developed in close collaboration international associations in the realms of international
trade such as the Global Express Association (GEA),the International Air Transport Association (IATA), the International Trade Centre (ITC),the United Nations Conference on Trade and Development (UNCTAD),The World Bank, and the World Trade Organization (WTO). Leading organisations within logistics , namely “ABX LOGISTICS Worldwide Agility, Deutsche Post World Net, DP World, FedEx Corporation, Stena, TNT N.V., and UPS, were also engaged in the development of the ETI 2008 “(Lawrence et al, 2008:7).
While the ETI is an index developed primarily with the international trade in mind, metrics utilized to measure factors, policies, and services facilitating the flow of goods, such are import procedures, will prove useful in identifying some of the constituent parts and influencing factors in the Freight Forwarding system.
“Among the many barriers to the efficient cross-border movement of goods are the complexity of procedures, expenses in both money and time, and insufficiencies in infrastructures and operations” (Lawrence et al, 2008: 69). Other obstacles to trade are related to the human and physical infrastructure and to institutional frameworks that have been developed over the years in each country to move products over border and to destinations. Whatever their origins, “these barriers have the consequence of limiting flow of trade, generally lowering welfare at the aggregate” (Lawrence et al, 2008:3).

READ  Task objectives and demarcation of research

1. Introduction
1.1. Background.
1.2. Theoretical perspective of the study
1.3. Purpose and explained Research Questions
1.4. Disposition of the thesis
2. Research design and method .
2.1. Scientific perspective .
2.2. Research approach.
2.3. Method approach
2.4. Applied method
2.5. Realization of the study.
2.5.1. Analysis and interpretation of the case study data
2.5.2. The pre-study: Bourbon Group and Bollorè
2.5.3. Problems with gathering the empirical material and Limitation
2.5.4. Trustworthiness of the study
2.5.5. Criticism of the method chosen .
3. Pre-study: Bourbon Group and Bollorè 
3.1. Introduction to the pre-study
3.2. Bourbon Group profile
3.3. Bollorè Group profil
3.4. Correspondence with Bourbon Group K
4. Theoretical framework 
4.1. Introduction
4.2. The Systems Theory.
4.3. The Theory of Constraints .
4.3.1. The Philosophy of TOC
4.3.2. Thinking Process
4.4. Freight Forwarders
4.4.1. Freight forwardersby definition
4.4.2. Types of Freight Forwarders
4.4.3. Functions of Freight Forwarders
Identifying the bottlenecks in Freight Forwarding in West Coast Africa by Berrada and Ciro
4.4.4. Standards and Connectivity: Important aspects within Freight Forwarders
4.4.5. Freight Forwarders – a Supply Chain perspective.
5. Empirical presentation.
5.1. The Logistics Performance Index
5.1.1. Methodology of LPI .
5.1.1.1. About PCA
5.1.1.2. The Questionnaire
5.1.1.3. The 1-5 scale .
5.1.2. Practical implications
5.1.3. Key factors in logistics performance
5.2. Section 2 – Global Enabling Trade Report 2008
5.2.1. Enabling Trade Index.
5.3. Section 3 – Country Profiles
5.3.1. Nigeria .
5.3.1.1. Nigeria ports
5.3.2. Angola
5.3.3. Cameroon
5.3.4. Gabon .
5.3.5. The Democratic Republic of the Congo .
6. Analysis
7. Conclusion
8. Scope for future research.
9. References

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Bottlenecks in the Freight Forwarding sector in West – coast Africa .

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