Jan Hoffmann

U n i t e d N a t i o n s E c o n o m i c C o m m i s s i o n f o r L a t i n A m e r i c a a n d t h e C a r i b b e a n (E C L A C). E m a i l : J H o f f m a n n @ E C L A C. c l The Latin American major ports are no longer inefficient state-run public monopolies. Common user ports tend to be concessioned under a landlord scheme, whereas specialised ports and terminals are more often privately owned or leased. New infrastructure is still being constructed, and regional and international private port companies participate in the port operations. The most renowned successes are Panama, Argentina, Mexico, and Colombia, but not all countries have advanced equally. The demand for private sector participation depends on the desire of the public sector to promote foreign trade and the need to reduce its fiscal burden. The supply of private sector participation by port operating companies appears to depend on the port's hinterland and the perceived country risk. Perceived corruption, illiteracy, and a pending broader structural reform seem to have a negative impact on both demand and on supply. The same socioeconomic situation that, up to now, has acted as an obstacle to port reform in the poorest Latin American countries should be considered as motivation to proceed with the necessary reforms in the future. Privatised port operations may help the urgently needed general structural reform of the economy, including better education and more stable public institutions ± which in turn will reduce the remaining obstacles for port privatisation. The challenge for policy makers is to initiate this virtuous cycle. International Journal of Maritime Economics (2001) 3, 221-241.

foundations for port and shipping policies', the organisers aimed to encourage papers which are of particular interest to the public sector and policy-makers. Topics such as shipping alliances, the regulation of ports, the economic impact of transport corridors, future intermodal and transshipment patterns, and the relationship between transport costs and trade were considered to be of increasing relevance for policy-makers in Latin America and other regions. It was felt that a meeting of maritime economists under this conference theme would be of mutual interest for researchers and for those dealing with ports and shipping matters in the public sector. This present special issue of MEL includes some of the most interesting contributions in this regard. The first two papers look at regulatory aspects in shipping and ports, the third and fourth paper deal with trade and transport corridors, and the last two papers analyse the relationship between trade and transport costs. Furthermore, the issue also includes a policy perspective from the Panama Canal and a book review covering Latin America and the Caribbean, thus further contributing to the integration of this region into the world of

1 A u s t r a l U n i v e r s i t y, A r g e n t i n a ; 2 E c o n o m i c C o m m i s s i o n f o r L a t i n A m e r i c a n a n d t h e C a r i b b e a n , S a n t i a g o , C h i l e ; 3 I n t e r-A m e r i c a n D e v e l o p m e n t B a n k , Wa s h i n g t o n , U S A. E-m a i l : r i c a r d o. s a n c h e z @ l y c o s. c o m This paper examines the determinants of waterborne transport costs, with particular emphasis on the efficiency at port level. Its main contribution is (1) to generate statistically quantifiable measures of port efficiency from a survey of Latin American common user ports, and (2) to estimate a model of waterborne transport costs, including the previously generated port efficiency measures as explanatory variables. In order to incorporate different port efficiency measures from the survey, we use principal component analysis (PCA). Our estimations show that the specified variables in the model explain a great proportion of the change in waterborne transport costs. With regard to port efficiency, the result is especially important for one of the port efficiency measures obtained through PCA with an estimated elasticity equivalent to that of distance. Other explanatory variables which show to be statistically significant are the monthly liner service availability, distance, and the goods' value per ton. The conclusions are relevant for policy makers as they show and quantify that port efficiency is a relevant determinant of a country's competitiveness – and in this respect, there still exist big differences among Latin American countries. Unlike most other relevant variables, port efficiency can be influenced by public policies.

The external trade of a country is closely linked with its geographical location, with the transport services that cover the distance to markets, and the ports through which that trade passes. Recent advances in maritime transport, the growing international economic integration, and the privatization of ports in the countries on the Pacific coast of South America have given rise to expectations that ports could be developed that concentrate both domestic cargo and that of neighbouring countries for its subsequent redistribution: what are known as " hub ports ". The main conclusion of the present study is that the potential for hub ports on the Pacific coast of South America is very limited. In the past, countries tried to prevent the foreign trade of their neighbours from using their ports to gain some kind of commercial benefit. Now, however, the situation has been reversed , and ports compete with each other for the trade of neighbouring countries. In itself, this competition is positive , but the problem is that in many cases it has been raised to a political level which has turned simple competition between ports into international competition between hypothetical future " hub ports ". In view of the low degree of probability that the establishment of such ports on the west coast of South America will be a success, it might be more advisable to seek greater regional coordination of transport policies and of investments in port and land transport infrastructure , in order to promote integration between the countries of the Atlantic and Pacific coasts of South America.

En este trabajo se investiga la relación empírica existente entre conectividad, costes de transporte y comercio. Con el fin de analizar los determinantes de los costes de transporte se estima un modelo de costes donde se incluyen como variables explicativas los valores unitarios, la distancia, la conectividad y las economías de escala. A continuación, para establecer el grado y la intensidad de la relación existente entre costes de transporte y comercio se estima una ecuación de gravedad ampliada. Los resultados de ambas estimaciones permiten calcular la elasticidad de los costes de transporte con respecto al comercio. Palabras clave: comercio internacional, costes de transporte, conectividad.

1 Tr a n s p o r t R e s e a r c h I n s t i t u t e , N a p i e r U n i v e r s i t y, C r a i g l o c k h a r t C a m p u s , E d i n b u r g h E H 1 4 1 D J , U K. E-m a i l : g. w i l m s m e i e r @ n a p i e r. a c. u k ; 2 U N C TA D , Pa l a i s d e s N a t i o n s , O f f i c e 7 0 4 4 , G e n e v a 1 211 , S w i t z e r l a n d. E-m a i l : J a n. H o f f m a n n @ u n c t a d. o r g The Caribbean basin lies at the cross roads of major east-west and north-south liner shipping routes. A number of regional ports have been able to take advantage of their geographical position. In other ports, however, the limited scale of hinterlands and the de facto monopolistic situation of ports in Small Island States have had a detrimental effect on port development. Port infrastructure endowment varies between highly equipped global transhipment hubs and rudimentary ports with wooden quays. By the same token, the supply of regular shipping services ranges between highly interconnected routes on the one side, and Small Island States that are heavily dependent on a few limited feeder services on the other. At the same time, freight rates in the region dispose of a high variability. The paper analyses the impacts of port infrastructure and liner shipping connectivity on intra-Caribbean freight rates. The structure of liner shipping services, port infrastructure endowment and liner shipping freight rates are closely related to each other. The paper will analyse these relationships. The empirical methodology includes principal component analysis and ordinary least-squares regressions.

Access to global liner shipping networks to transport international trade in manufactured goods is increasingly important for a country's participation in global value chains. Measuring and quantifying how well a country is connected to global liner services, and more specifically how well two countries are connected to each-other, should help improve the analysis of trade costs and flows. As a contribution to this endeavour, the present paper aims at developing an index that reflects the liner shipping connectivity between pairs of countries. It is an extension of recent research on liner shipping connectivity, in particular Hoffmann et al (2013), presented at the 2013 IAME conference, as well as Fugazza et al (2013), published by UNCTAD. In both these 2013 papers, the relationship between different aspects of bilateral connectivity (i.e. vessel deployment, necessary transhipments, level of competition, et al) and other variables, such as trade and maritime distance, were discussed. Building on the results from the latter, we now combine different components of bilateral connectivity to develop and propose a single " Liner Shipping Bilateral Connectivity Index " (LSBCI). This LSBCI will be an extension of UNCTAD's already existing country-level Liner Shipping Connectivity Index (LSCI). The paper starts out with some general considerations about the concept of liner shipping connectivity, and then presents a proposal for an LSBCI for discussion during the IAME 2014 conference. The components that are combined to generate the proposed LSBCI cover the required transhipments to connect two countries, common connections, the size of deployed vessels, and the level of competition.

Improvements in international transport services are one of the main features of economic globalization. Together with progress in telematics, standardization and trade liberalization, faster, more reliable and cheaper transport services are contributing to the integration of production processes at the global level. This article seeks to examine the causal links between trade and the cost of international transport services. The impact of the cost of transport on foreign trade and economic development International freight has an impact on trade equivalent to customs tariffs or the exchange rate: a reduction in the cost of transport directly stimulates exports and imports, just as an increase in the exchange rate (the rate at which the national currency may be exchanged against another) makes exports more competitive, and a reduction in national customs tariffs lowers the cost of imports. Spurred by trade liberalization, customs tariffs have dropped to levels where in many cases any additional reduction would now no longer have a significant impact. It is perhaps for that reason that new and interesting studies have been produced in recent years analysing the impact of transport costs on trade patterns and globalized production. The impact on trade: the price of the vast majority of traded goods is exogenous for developing countries. If the shipping of imports becomes more expensive, higher inflation ensues as a result of

The chapter provides empirical evidence that indicators for different port characteristics have a statistically significant and strong impact on international maritime transport costs. It reports on empirical work on trade among 16 Latin-American countries. The database incorporates 75,928 observations, which comprise practically all maritime trade transactions in containerizable goods on most intra-Latin-American trade routes for the year 2002. The regressions incorporate the main classical explanatory variables of maritime transport costs, such as unit cargo value, volume per transaction, geographical distance, bilateral trade volume, and trade balances. It further looks at six indicators for different port characteristics as possible additional determinants of international transport costs. It is found that indicators for port efficiency, port infrastructure, private sector participation, and inter-port connectivity have significant impacts on international maritime transport costs. The estimated elasticity for port

Transport connectivity is a crucial determinant of bilateral exports. This paper presents an empirical assessment of the relationship between bilateral maritime liner shipping connectivity and exports in containerizable goods during the period 2006-2013. Making use of probed " gravity " type trade models, the paper incorporates new data on different measurements of maritime distance, as well as a unique new dataset and new bilateral connectivity indices developed by UNCTAD. The empirical investigations unequivocally show that lacking a direct maritime connection with a trade partner is associated with lower values of exports; any additional transshipment is associated with a 40 percent lower value of bilateral exports. Other indicators of liner shipping connectivity incorporated in the research take into consideration levels of competition and container vessel sizes. Results also indicate that the quality of bilateral connectivity as measured by several composite indices is a crucial determinant of bilateral exports. All empirical results suggest that in the absence of a bilateral connectivity indicator the impact of distance on bilateral exports in classical gravity models is likely to be overestimated.

This chapter describes the fast-evolving environment in which both shipping and ports operate and identifies some key trends that are currently defining the maritime transportation landscape. First, it considers the demand for maritime transport services as measured by economic growth, trade flows and seaborne trade. Second, it examines relevant supply-side variables, including the global fleet carrying capacity, port services and other related maritime businesses. Furthermore, the chapter draws attention to some unintended effects of maritime transportation, in particular, the related external environmental and societal costs. While the role of maritime transportation as an integral part of global logistics is reiterated, the need to address the environmental externalities generated by the sector is equally highlighted as an increasingly important consideration. Climate change mitigation and adaptation requirements, in particular are emerging as a major game-changer. From a policy perspective, these developments entail some important cross-sectoral implications and may give rise to potentially overlapping and competing priorities and objectives. In this context, it is argued that an effective response to the current concerns facing maritime transportation and to the new market realities calls for a multi-stakeholder involvement and greater policy coherence and collaboration among policy makers, industry and trade.

Innovations in the digital economy can reduce the costs of engaging in trade and facilitate the physical delivery of traded goods, making trade potentially more inclusive. This chapter examines the opportunities and challenges brought about by digital connectivity and digital trade along the trading chain. It highlights that digital trade for development requires addressing, in addition to digital connectivity, new and old constraints to market integration and physical connectivity. It underscores the importance of efficient trade logistics services and emphasises the need to coordinate investments within regions and across hard and soft infrastructure. It then examines progress in cross-border connectivity and gives an update on the implementation of the WTO Trade Facilitation Agreement. Finally, while many opportunities to reduce trade costs arise from digitalisation, the paper highlights that the ability to adapt to the requirements and characteristics of digital trade flows, can influence the ability to realise the full potential for development.