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Quantifying Logistics Costs of Landlocked Developing Countries

Landlocked Developing Countries (LLDCs) face structural challenges with transport and trade processes that contribute to high logistical costs on trade. This report develops a dataset on unit logistics costs measured in $/ton, disaggregated by origin, destination, commodity, and mode of transport, as the basis of a comparative analysis of LLDC logistics costs relative to other economies.

The findings reveal that LLDCs incur unit logistics costs on their exports that are 63 per cent higher than those of transit developing countries. For imports, the disparity is even greater, with LLDCs facing costs that are 75 per cent higher. When instead compared to coastal countries within the same region (Africa, Euro-Asia, and Latin America), LLDCs similarly suffer export logistics costs that are between 27 per cent to 60 per cent higher than those of their coastal counterparts. For imports, the disparity can be even more pronounced, reaching as high as 79 per cent compared to regional comparators.

A notable driver of higher logistics costs for LLDCs is port-hinterland transportation costs¡ªthe expenses incurred in moving goods between inland locations and the nearest ports. For time?sensitive goods such as agricultural products or electronic devices, port-hinterland costs can add up to 12 per cent to unit logistics costs on both exports and imports. In contrast, logistics costs for primary commodities like coal and crude oil are much more comparable between LLDCs and other economies, underscoring the structural logistical difficulties LLDCs face in diversifying their exports and escaping primary commodity dependencies.

The analysis underscores the urgency of addressing the ¡°logistics cost gap¡± between LLDCs and coastal countries. Policy efforts should focus on upgrading road and rail connections to gateway ports, improving cross-border infrastructure, and implementing streamlined, efficient customs processes and logistics systems, including single windows. Regional integration is important for bridging the logistics cost gap between LLDCs and their coastal neighbours and can be strengthened with specific provisions that address the unique transit challenges faced by LLDCs. Additionally, investments in multimodal transport systems and digital solutions, such as electronic transit systems and trade facilitation platforms, are essential to reducing delays and costs. LLDCs should also prioritize strategies to specifically lower logistics costs for exports of high-value commodities, such as manufactured goods, to encourage economic diversification and competitiveness.

This report highlights the critical need for coordinated national, regional and global interventions to alleviate the high logistics cost burden on LLDCs and support their efforts to achieve sustainable development and greater integration into global trade networks.

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