liberalization of the freight market

Examining current trucking regulations, potential

for liberalization to bring more competition, better

service and a more professionalized industry

DR. KOFI MBIAH, CEO, GHANA SHIPPERS’ AUTHORITY

Ghana Shippers’ Authority - Providing Shipping Solutions

OUTLINE

Demand and Supply dynamics of the

Freight Market

Overview of Trucking Regulations

Liberalization

Recommendations


• Structure of trucking market

Is there a transport market oversupply?

Market is segmented – ‘strategic’

• Factors accounting for high transport

prices in West Africa

Infrastructure constraints

Low level of competition among

Service Providers

Availability of ‘return cargo’

Seasonal demand

DEMAND & SUPPLY DYNAMICS


• Existence of many regulations -

official & unofficial – market access

•Inter State Road Transportation

(ISRT) Convention, 1982

- provided the nourishment for

development of oligopolies in the

transit trucking market.

OVERVIEW OF TRUCKING REGULATIONS


Key provisions of the ISRT:

pairs of member states (coastal, landlocked)

could enter into bilateral treaties regulating

the sharing of transport rights for import

transit.

Results:

(a) Reservation of ‘strategic’ cargoes to trucks

registered in the country of destination

(b) Allocation of 1/3 of ― ‘non-strategic’ freight to

the coastal country and 2/3 to the landlocked

country



The regional approach to freight transport and

transit activities has resulted in:

Transit Trade trucking inefficiencies

Frustration in the creation of a flexible

region-wide market for trucking

High prices passed on to consumers

Uncompetitive prices of the region’s

Exports on the global market

Negative impact on the economic dev’t of

economies in the region



The road freight industry is characterized

by:

a large number of powerful associations

their interests which are served through

influence wielded at national and regional

levels

To inject efficiency and improvements in the

trucking industry, rational reform of legal and

institutional frameworks is important

Example of successful deregulation –

Rwanda 1994

LIBERALIZATION ?


Impact of deregulation:

o Introduction of competition into market

o Improvement in the quality of service

o Own account operators to drop non-core

operations

o Possible Lowering of trucking prices

LIBERALIZATION ?


Institute a comprehensive study on the

trucking industry for economic analysis

Harmonization of vehicle licensing &

inspection regimes

Countries to renegotiate bilateral

agreements under ISRT

Revision of ECOWAS ISRT Convention

RECOMMENDATIONS


THANK YOU

liberalization of the freight market

Documents