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To cite this Article Banomyong, Ruth , Cook, P. and Kent, P.(2008) 'Formulating regional logistics development policy: the
case of ASEAN', International Journal of Logistics Research and Applications, 11: 5, 359 379 To link to this Article: DOI: 10.1080/13675560802389114 URL: http://dx.doi.org/10.1080/13675560802389114
International Journal of Logistics: Research and Applications Vol. 11, No. 5, October 2008, 359379
of International Business, Logistics & Transport, Thammasat University, Bangkok, Thailand; b Nathan Associates Inc., Virginia, USA
(Received 2 January 2008; nal version received 8 July 2008 )
The Association of South East Asian Nations (ASEAN) is a regional economic grouping that is composed of Brunei, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam. An ASEAN-wide logistics development policy has been developed and endorsed by ASEAN in August 2007. This logistics development policy is based on the work done by the authors as requested by the ASEAN Secretariat. The authors provided the guiding principles, the six major policy areas as well as the draft of the logistics sector integration roadmap that was nalised and endorsed by ASEAN. It is hoped that the formal endorsement of this important sector for ASEAN economic integration will support logistics liberalisation and development within ASEAN. The purpose of this paper is to explain the methodology utilised in the formulation of the ASEAN logistics development policy that was endorsed by ASEAN member countries. Keywords: ASEAN; logistics policy development; policy formulation; service liberalisation
1.
Introduction
Logistics plays a key role in national and regional economies in two signicant ways. First, logistics is one of the major expenditures for businesses, thereby affecting and being affected by other economic activities. Second, logistics supports the movement of many economic transactions; it is an important aspect of facilitating the sale of all goods and services (Grant et al. 2006). Logistics is not only conned within national borders or markets. In each country or region, export and import rms face logistics attributes that may differ from those experienced in the domestic market. International logistics management requires an understanding of the relative transportation efciencies in different countries. It requires that managers understand the transportation capabilities and characteristics of primary trading countries (Rodrigues et al. 2005). There is within international logistics a complex cross-border environment in which government actors play a prominent part. Moreover, wasteful transaction costs arise in cross-border operations between business actors and government executive agencies (Grainger 2007). Any national or regional logistics policy that is formulated must be able to address these difcult issues.
*Corresponding author. Email: ruth@banomyong.com
ISSN 1367-5567 print/ISSN 1469-848X online 2008 Taylor & Francis DOI: 10.1080/13675560802389114 http://www.informaworld.com
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The purpose of this paper is to explain the methodology as well as the process utilised in the formulation of a logistics development policy for a regional economic grouping known as the Association of South East Asian Nations (ASEAN). ASEAN is a regional economic grouping that is composed of Brunei, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam.
2.
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In the global logistics environment, customs plays a very important facilitating role. Importing and exporting rms also rely heavily on specialised service providers to facilitate the ow of goods across borders (Banomyong 2004). ASEAN countries now realise that even with customs improvements, trade can still be impeded by a variety of other factors including the logistics system that is handling the ow of goods between the border and hinterland of origin or destination points (Price 2006). As information ow needs to accompany the cargo along its routes, the accommodation of information exchange and the infrastructure systems through which cargo moves have become additional items of interest in trade and logistics facilitation. While trade facilitation was originally meant to primarily address needed customs reform, the scope of trade facilitation has been broadened to address virtually all of the barriers constraining the seamless ow objective for cargo movements. Trade facilitation has evolved into whatever is needed to improve supply chain performance, encompassing transportation and national/regional logistics systems. The Arvis et al. (2007) World Bank publication is a good illustration of the expansion of scope in trade facilitation as it aimed to shed light on how different countries are doing in the area of trade logistics, and what they can do to improve their performance. It was based on a worldwide survey of the global freight forwarders and express carriers who are the most active in international trade. In the study, the cost and quality of logistics are determined not just by infrastructure and the performance of public agencies but also by the availability of quality, competitive private services. Moreover, in many developing countries, problems of adverse geography are compounded by a weak modern services sector due to poor institutions or over-regulation. The ASEAN logistics system, like other macro level logistics systems, is composed of (1) shippers, traders, and consignees; (2) public and private service providers; (3) regional and national institutions, policies, and rules; and (4) transport and communications infrastructure (Asian Development Bank 2007). Figure 1 shows how these four components combine to determine to affect the performance of the regional logistics system. The performance of the ASEAN logistics system will reect both the international competitiveness of ASEAN logistics services and the level of integration of the ASEAN logistics system. The sum of all these factors will determine ASEANs international competitiveness (Banomyong et al. 2006).
2.1. Shippers and consignees Shippers and consignees are the principal users or the customers of the logistics system. They require that their goods be moved through the logistics system effectively and efciently, both as inputs to and outputs from their businesses. Logistics systems serving shippers and consignees must also interface and integrate effectively with suppliers and customers own logistics systems both within and outside of the domestic environment. Shippers and consignees have different levels of knowledge and understanding of their logistics system but it is important that the national or regional logistics system they are using can meet their requirements and facilitate their economic transactions.
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Figure 1.
2.2. Service providers Public and private logistics service providers represent the logistics industry. This is a relatively new industry that has received much attention in recent years. There is still confusion, however, about the coverage of this logistics industry. To add to the confusion, a number of transport and warehouse operators have re-cast themselves as logistics service providers although they have not changed or increased the range of services they provide. Traditional logistics services such as transport, storage, and warehousing are easily identied and provided, whereas other logistics activities such as sourcing or inventory management cannot be identied as easily. The quality and range of logistics services provided by the logistics industry will depend on the structure of the logistics industry itself, the contractual arrangements for the provision of logistics services, the existing infrastructure and the institutional framework as well as the skills and competence of the service providers themselves. 2.3. The institutional framework There are many aspects of the regulatory and institutional environment that affect shippers, traders, exporters, and logistics service providers in terms of their operations. These include rules and regulations concerning imports and exports, nancial regulations (e.g. letter of credit rules and ability to exchange currency), registration and licensing of service providers, customs procedures, border crossing procedures, and even on the type of logistics services that can be offered. Too many complex rules and regulations will impede the movement and storage of goods, services and information within the logistics system. This institutional framework is the software that authorises, facilitates, impedes or forbids the movement and storage of freight on the existing infrastructure. 2.4. The infrastructure Infrastructure is the backbone or the hardware of the logistics system. Transport infrastructure is critical for the physical movements and storage of shipments. Communications infrastructure is critical for the efciency of these movements, particularly across borders and modal interface areas where customs and other related agencies are involved in addition to many other stakeholders.
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3.
Methodology
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In a declaration issued in 2003 during a summit held in Indonesia, ASEAN leaders agreed to establish the ASEAN Economic Community through enhanced economic integration starting with 11 priority sectors. These priority sectors were subsequently identied as the industries related to rubber, automotive, garments and textiles, wood-based, agricultural, sheries, and the manufacture and processing of electronics. Also identied were four priority service sectors, involving information and communication technology (ICT), dubbed e-ASEAN, air transport, tourism, and healthcare. Logistics was included as a priority sector for integration in 2004 but the actual formulation of the roadmap started in the mid-2006 by the authors at the request of the ASEAN Secretariat. It was therefore important for the authors to develop a methodology that could be utilised to help support ASEAN in the formulation of their logistics policy development roadmap. The rst step of the methodology was based on a rapid assessment of the ASEAN logistics sector. This meant that the status of the sectors related to logistics services needed to be understood in terms of: the general condition of the transport network and eet for each mode; the level of modernisation of customs and trade facilitation initiatives; the level of development and liberalisation of transport and logistics services; the structure and scope of the freight forwarding industry and related logistics services; and the level of modernisation of the information and communications system.
The authors therefore developed seven questionnaires relating to the major advances introduced in the past few decades in these related logistics sectors. These major advances were mostly identied from trade literature. The data collected described which of these advances have been introduced or are planned to be introduced. The purpose of the questionnaires was to assess the capacity of all logistics-related sectors in each of the ASEAN member countries. The questionnaires covered the following sectors. Customs; Ports and maritime transport; Rail transport; Road transport; Inland waterway transport; Air transport; Logistics services.
In consultation with and with support from the ASEAN Secretariat, the authors conducted an e-mail survey to collect data from relevant governmental and private agencies in the 10 member countries. In each country, there would be one identied respondent for each of the questionnaires delivered. These respondents were high-level policy makers in their respective ministries and were identied with the help of the ASEAN Secretariat. The individual national respondents for the logistics services questionnaires were selected from high-ranking executives of each ASEAN countrys national logistics association. The questionnaires were then delivered after the second consultative meeting for the priority integration sectors held at the ASEAN Secretariat in June 2006. That consultative meeting allowed the authors to introduce the research to the various stakeholders and to request support in terms of data collection. Weekly follow-ups were conducted requesting responses to the questionnaires. Some national agencies did not respond, and the data are therefore not complete for all sectors. A description of the response rate is provided in Table 1. There is sufcient data, however, to
International Journal of Logistics: Research and Applications Table 1. ASEAN questionnaire response rate. Country Brunei Cambodia Indonesia Lao PDR Malaysia Myanmar Philippines Singapore Thailand Vietnam
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Customs X X X X X X X X X X
Ports
Rail
Road
IWT N/A
Air X X X X X X X X
LSP X X X X X X X X X X
N/A X X X X
X X X N/A X X
X X X X X N/A X X
analyse most of the underlying issues in logistics sector development in the ASEAN region. The results of this survey are described in the following section of this paper. In the second step of the methodology, the survey ndings were then presented in August 2006 at the rst logistics consultative meeting held in Vietnam in conjunction with the guiding principles that were identied, based on the surveys gap analysis of the ASEAN logistics sector. This gap analysis enabled the identication of common weaknesses in the ASEAN logistics sector that needed to be addressed from a policy perspective. The survey results were then validated and the proposed guiding principles endorsed by the meeting. The third step of the methodology was a nal validation meeting which was held in Indonesia during November 2006. The purpose of this meeting was to agree upon the specic issues that needed to be included in the guiding principles. These issues would then be negotiated between ASEAN member countries for inclusion in the nal logistics development policy roadmap. This was nally endorsed by ASEAN in August 2007 (see Appendix 1).
4.
Survey results
The survey revealed that the logistics capacity of ASEAN member countries varied widely, primarily because these countries are currently at different levels of economic development. The level of economic development correlates strongly with the types of logistics services offered. The following is an analysis of the data gathered from the questionnaires distributed to all ASEAN member countries. 4.1. Customs All ASEAN countries, except Lao PDR, are members of the World Trade Organisation (WTO). This means that that all ASEAN countries have to follow WTO-based rules for customs valuation. Strangely enough from the survey, it seemed that in practice not all WTO-based valuation rules are implemented. Lao PDR is not a member of the WTO but has started to follow some WTO-based rules in order to ease the negotiation of its entry into the WTO. The country is still lagging far behind. Most customs issues related to logistics, such as the ASEAN customs declaration form, have been only partially implemented or are at the planning stage for implementation. Full implementation of this declaration form, the same declaration form for all member countries, will facilitate trade among member countries even further. A signicant step toward this single declaration form
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is the adoption by ASEAN member countries of the United Nations Conference on Trade and Development (UNCTAD) key layout form, which standardises administrative documents. The full implementation of the ASEAN electronic single window is important to the development of logistics services in the ASEAN region, but this implementation is still at the planning stage in a number of ASEAN countries. The ASEAN electronic single window has been partially implemented in the selected ASEAN countries in 2006. The objective is to have implementation by 2008 with an extended grace period for the less developed member countries. The implementation of computerised risk management and the clearance of documents with post-audit need to be accelerated to facilitate the efcient and effective ow of goods across borders. Both activities are currently only partially implemented.
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4.2. Ports and maritime transport Ports are often the chief facilities linking an economic system with the international market and therefore the main trade hubs. Based on the survey results, some ASEAN countries have no direct service with mainline carriers. This is partly because of their low container volume compared with the container volume of other more developed ASEAN member countries. All ASEAN member countries are served by shuttle feeder services to main regional hubs such as Singapore or Hong Kong. The ASEAN region has developed a system of shipping networks in which individual ports are linked into intricate patterns of dependency in hubfeeder relationships as well as into end-to-end shipping linkages that reect the increasing dependency between national, regional, and global economies (Flemming and Hayuth 1994). Singapore is the only country where the major port operates as a landlord port, the port authority is separate from the operating organisation, and private sector management participates heavily. The concept of landlord ports exists in other ASEAN countries as well, although it is not as fully implemented as in Singapore. This concept was not applicable in Myanmar. This means that there are strong differences in terms of how major ports in each ASEAN country operate. Port ICT plays an important role in the integration of ports with their stakeholders, including the shipping lines, exporters, importers, and customs. However, not all national ports have computerised information systems enabling ports and port users to exchange information on the status of cargo moving through the port or on regulatory procedures. 4.3. Rail transport Rail usually offers an efcient interface between maritime and land transportation systems, especially since container shipping has become prevalent. Rail logistics are complex, however, requiring management of capacity, schedule, shipment characteristics, origin, and destinations. From the questionnaire results, rail transport can be considered to be one of the weakest links in the ASEAN logistics infrastructure. Singapore, Malaysia, and Thailand are linked by a metre-gauge network, which was linked in the past to a metre-gauge system in Cambodia. The ASEAN rail freight system is characterised by: access charges that are high compared with road transport; poor international routeing, leading to excessive transit times and poor service quality; and lack of priority given in timetables, resulting in poor reliability. The ASEAN rail transport system is heavily constrained because most of the railway system in ASEAN is not double-tracked and there is no dedicated track for freight operations. Freight operations are also hindered by the lack of a centralised train control system or any other type
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of advanced train control system that can monitor train movements with train identication and automatic route setting. Other limitations of the ASEAN railway system are that it cannot handle wagons that carry 80 tons or more, or trains longer than 50 wagons. Based on the collected data, the implementation of the following rail transport components would support the development of the ASEAN logistics sector.
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Double tracks and dedicated track for freight services. Centralised or advanced train control systems. Wagons that can carry more than 80 tons. Trains that can operate with more than 50 wagons.
4.4. Road transport Road is the main mode of transport in ASEAN, however, but there is still a need for harmonisation and standardisation among ASEAN countries. The problem is greatest for Cambodia, Lao PDR, Myanmar, and Vietnam, where road infrastructure lags behind the infrastructure of the other members of ASEAN. Multilane dual carriageways and limited-access highways are seen mostly in the more developed economies of ASEAN. Urban congestion limits the efcient ow of goods moved by trucks, especially during peak hours, and toll roads and ring roads seen as part of the solution to this, as are total or partial truck bans in large ASEAN cities. Overloading of cargo is another issue that many ASEAN countries face. Axle load limits do exist, but enforcement can be lacking. Articulated trucks can be found in many ASEAN countries but they are not the majority of trucks moving cargo. Roadworthiness certicates are required in most ASEAN countries, but enforcement is again often lacking. 4.5. Inland waterway transport The inland water transport system in the ASEAN region serves largely domestic trafc. Some scheduled inland waterway services exist in ASEAN countries, especially countries that are riparian to the Mekong river. Linkages to the main seaports are not readily available, hindering the development of inland waterway transport as a key component in the ASEAN logistics system. When compared with maritime ports, inland waterway port facilities, equipment, and ICT systems are poorly developed. There is a lack of container vessels and container-handling capability, although some river ports do handle containers on an ad hoc basis. 4.6. Air transport A draft for the ASEAN Multilateral Agreement on the Full Liberalisation of Air Freight Services has been developed, and the 11th ASEAN Transport Ministers meeting endorsed the implementing agreements to nalise this multilateral agreement in 2006. However, according to the survey, most ASEAN member countries have only partially opened up air freight services, whereas Vietnam and Lao PDR have not even started the liberalisation process. Pure freighter services are not common in ASEAN, especially in Cambodia, Lao PDR, Myanmar, and Vietnam, but many ASEAN countries would like to be considered as major air freight hubs. This desire is reected in the national air development policies of some member countries. Being an air freight hub would also require on-site operations at airports and cargo villages. These facilities do not exist in some of the countries that aspire to be air freight hubs,
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such as Thailand and Vietnam. Cold storage, dangerous goods storage, and competitive ground handling services are also important factors in the development of an air freight hub. Quick clearance and electronic data interchange (EDI) for cargo manifests are closely related to such services but again are lacking in many countries. Large pallet scanners that facilitate the examination of freight shipped on aircrafts are also needed but are only available in major air transportation hubs such as those in Thailand and Singapore. 4.7. Logistics services sector Logistics services available in ASEAN reect the economic development achieved by individual member countries, with more sophisticated services available in the more developed countries. Freight forwarders and logistics service providers in the more developedASEAN countries provide extensive logistical and supply chain services, whereas freight forwarders from less developed ASEAN countries provide only basic logistics services such as trucking, warehousing, or customs brokerage. Local customers have become more demanding in the more developed economies of ASEAN because of the multitude of global logistics services providers offering their services in the region. The usage of domestic containers for internal freight movement can play an important role in the development of a countrys logistics system. Brunei, Cambodia, Lao PDR, Myanmar, and Vietnam, however, have no such domestic containers and domestic freight is being carried in break-bulk form. Track and trace, distribution, and cross-docking centres are now considered prerequisites for a modern logistics system, and the logistics service sector must be able to provide these activities to clients. Only service providers in Singapore and Thailand can provide track and trace; however, service providers in Malaysia and the Philippines have partially implemented track and trace, whereas the other ASEAN member countries do not have this capability. This means that the movement of freight in ASEAN is hampered by a lack of visibility in the majority of member countries. Distribution and cross-docking activities are more common, and many service providers in ASEAN countries have started to partially offer these services. Foreign logistics service providers dominate the market in many ASEAN countries. This is understandable, because small service providers are not capable of providing track-and-trace, distribution, and cross-docking services as well as service providers from more developed countries can. This is particularly true in Cambodia, Lao PDR, Myanmar, and Vietnam. The local freight forwarding industry in each ASEAN member country is much less concentrated because most freight forwarding companies are small and medium-sized enterprises. For trucking services, the picture is more balanced, with Brunei, Cambodia, Indonesia, and Myanmar having a concentrated trucking industry. Concentration in itself is not a bad thing, as long as shippers and consignees can receive the best logistics services at the lowest price. A critical point for logistics sector integration relates to standard service contracts. It is important for the logistics service industry to provide logistics services on the basis of standard service contracts, but this is not the case in ASEAN member countries, with the exception of Singapore. The use of standard service contracts is only partial in most ASEAN countries. A harmonised standard service contract would protect both clients and service providers.
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5. ASEAN logistics cost assessment The purpose of this section is to discuss ASEAN logistics related cost and how the existing level of logistics-related cost can be a hindrance or a competitive tool. Until recently, logistics cost
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was a big unknown in the region. ASEAN shippers and consignees have been complaining about the high cost of logistics and how long it took for exports and imports to be processed. ASEAN governments were also unsure about their national logistics costs, but many felt that their national logistics costs were high compared with their gross domestic product (GDP). When data were available, the range of national logistics costs per GDP has been estimated at around 14% for Singapore (Rodrigues et al. 2005), 20% for Vietnam (Meyrick and Associates 2006), and 24% for Thailand (Banomyong 2007) but all these estimates were based on different methodology and different base years. Although these ratios are just an aggregation of national logistics expenditure and cannot really reect the logistics costs for a particular product or commodity, they do indicate that logistics costs are relatively high for ASEAN countries other than Singapore. A number of studies conducted in ASEAN in relation to product and industry logistics costs have found that the range of export logistics cost based on an FOB basis was between 5% and 25% for most products (ALMEC 2002, TNSC 2005, USAID 2006). The reason behind this wide range is related to the nature and value of the exported product. Higher-value products will have a lower ratio of logistics costs than lower-value goods. Export logistics costs are composed of procurement costs, inventory holding costs, warehouse costs, transport costs, and export processing costs. Table 2 describes the ratio of selected ASEAN export logistics costs on an FOB basis (USAID 2006). FOB terms were selected because the majority of ASEAN exporters use this INCOTERM when selling products abroad. During the process of formulating the ASEAN logistics development policy, it was discussed that getting the right documentation for transit/export purposes can sometimes take longer than just the actual physical movement of the goods. This anecdotal information came to light whilst trying to collect the questionnaire data from the Lao logistics service provider respondent. Transit transport issues are important for a land-locked country such as Lao PDR as (on average) more documents are required to handle transit cargo. Even though these delays do not directly add to logistics costs, they affect the total cost of products being exported. Direct export or import is seen as less problematic than transit. According to the data collected, on average, transport and export processing costs represent a large proportion of total export logistics costs. This is unsurprising, because usually the transport cost is the most important logistics cost component. Export processing cost also has a high impact on total export logistics costs. In fact, it has the highest share of total export logistics costs (USAID 2006). Export logistics cost is composed of all the administrative requirements needed to process exports. Some of these export logistics costs are related to documentary procedures, and some are fees for speeding up administrative processes (see Table 3). The relatively high level of export logistics costs in ASEAN is mostly driven by two logistics costs components: transport and export processes. The only logistics cost that rms cannot control is related to the export processing cost. Export processing cost is driven by governmental rules
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Table 2.
Ratio of selected export logistics cost in ASEAN. Total export logistics cost (%) 5 17 24 16 10 14.4
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R. Banomyong et al. Table 3. Total logistics cost components. Category Procurement costs Inventory holding costs Warehousing costs Transport costs Export processing costs Export logistics costs Share of total (%) 17 10 11 28 34 100
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and regulations and is totally outside the control of rms own logistics systems. This is an area that needs to be addressed by ASEAN and by all member countries individually. Reducing export processing costs in all member countries must now become a top priority for ASEAN. Reducing export processing costs does not necessarily mean a loss of revenue for ASEAN governments because facilitation measures can increase the volume of related export transactions. Reducing the export processing cost will not only reduce the total export logistics cost of ASEAN but also improve ASEAN competitiveness in the global market. In terms of time requirement, it takes on average about 22 to 23 days for all documentary processes to be completed for both export and import. This is another factor that affects the competitiveness of ASEAN exporters and importers both in terms of responsiveness capability and costs. As manufacturing systems become more global, delays in documentary procedure will impact on the ability of ASEAN to become a single integrated production base. Each day lost because of administrative delays increases not only rms inventory holding costs but also reduces ASEAN trade (Djankov et al. 2006).
6.
The ASEAN logistics sector is characterised by relative high cost, long lead time for export and import processes and an uneven level of logistics sector development across member countries. Customs facilitation issues seemed to be relatively well co-ordinated within ASEAN even though Lao PDR is not yet required to follow WTO-based customs valuation rules. The ports and maritime sector are probably the most developed logistics sub-sector in the region, whereas rail and inland waterway remain relatively underdeveloped. Road transport needs an expanded regional institutional framework that can help support international road transport between member countries. Air transport should have become liberalised since 2006 but implementation has not been executed. The regional logistics industry is quite competitive but foreign service providers are now starting to offer more advanced logistical services. The proposed regional logistics development policy should address all the strengths and weaknesses identied from the survey ndings. This regional logistics development framework starts with two agreed upon ASEAN basic development objectives that help to determine the priorities in the development policy. 1. Create an ASEAN single market by 2015 by strengthening ASEAN economic integration through the liberalisation and facilitation measures in logistics services; and 2. Support the establishment and enhance the competitiveness of an ASEAN production base through the creation of an integrated ASEAN logistics environment. These objectives refer back to the ASEAN vision statement and dene the role of logistics as playing a supporting role for trade development and integration. To reach these objectives, stakeholders based on the study ndings have recommended that ASEAN member countries take
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action in six major policy areas: Encourage the integration of ASEAN national logistics systems, by improving communication at the regional level to identify actions in the logistics sector to support and facilitate trade ows between ASEAN countries. Encourage the progressive liberalisation of logistics service providers, to enable them to respond better to the opportunities available for ASEAN integration and increasing competitiveness. Increase trade, logistics and investment facilitation, to identify the means needed to improve transport logistics facilities and the priorities for investment. Build ASEAN logistics capacity, by encouraging human resource development in the sector and an environment conducive to use of best practice in the sector, especially for small and medium enterprises. Promote ASEAN logistics service providers, by identifying them and providing channels for their greater participation in the sector. Promote multimodal transport capacity, especially for containerised transport. These six major policy areas cover the four components of the ASEAN regional logistics system and the performance issues identied above, while building on the capacity of existing ASEAN logistics service providers.
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7.
Conclusions
The six major policy areas and the roadmap for the integration of the ASEAN logistics sector were nally endorsed by ASEAN in August 2007. This paper has described the experience of ASEAN in formulating and adopting its regional logistics policy. The proposed policies and integration roadmap were derived from survey results from seven logistics sub-sectors: customs; ports, rail, road, inland waterway, air and logistics service providers. A gap analysis was utilised to identify strong and weak areas in the ASEAN logistics system. Even with support from ASEAN, the main limitation of the methodology was that the authors were not able to gather data from all member countries, even though all member countries agreed to cooperate in this formulation policy. The second limitation was that all member countries agreed very quickly on facilitation measures but were much more reluctant to discuss logistics service liberalisation issues. This is reected in the actual wording of the roadmap where it is requested that ASEAN member countries shall endeavour to achieve substantial liberalisation of logistics services. Logistics service liberalisation is a difcult topic as many ASEAN member countries are quite afraid to open up their logistics markets. However, gradual liberalisation within ASEAN is needed before the sector is forced to open under the WTO General Agreement on Trade and Services. The authors hope that this methodology could be replicated in other regions of the world in need of regional logistics development policy. The methodology provides a comprehensive comparative assessment of the existing regional logistics sector. Based on this rst-level assessment, gaps are identied and policy guiding principles are derived that must be agreed upon for further detailed development. References
ALMEC, 2002. ASEAN maritime development study. Jakarta, Indonesia: ASEAN Secretariat. Arvis, J.F., Mustra, M.A., Panzer, J., Ojala, L., and Naula, T. 2007. Connecting to compete-trade logistics in the global economy. Washington: The World Bank.
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Asian Development Bank, 2007. Logistics development study of the greater Mekong sub-region north south economic corridor. Manilla, Philippines: Asian Development Bank. Banomyong, R., 2004. Assessing import channels for Lao PDR. Asia Pacic Journal of Marketing & Logistics, 16 (2), 6281. Banomyong, R., 2007. Thammasat logistics research papers. Vol. 3. Centre for Logistics Research, Thammasat University, Bangkok, Thailand. Banomyong, R., Wasusri, T. and Kritchanchai, D., 2006. Implementing the 2010 ASEAN-China FTA: a Thai logistics perspective. Proceedings of the 11th annual international symposium on logistics (ISL), Beijing, China, 98104. Djankov, S., Freund, C. and Pham, C.S., 2006. Trading on time. Washington: The World Bank. Flemming, D.K. and Hayuth, Y., 1994. Spatial characteristics of transportation hubs: centrality and intermediacy. Journal of Transport Geography, 2 (1), 318. Grainger, A., 2007. Government actors in international supply chain operations: assessing requirements for skills and capabilities. Logistics research network conference proceedings 2007, 57 September 2007, Hull, England, 293298. Grant, D.B. et al., 2006. Fundamentals of logistics management. European Edition. Berkshire, UK: McGraw-Hill. Meyrick and Associates, 2006. Vietnam multimodal transport regulatory review. Vietnam Ministry of Transport and The World Bank, Final Report, Hanoi, Vietnam: The World Bank. Price, P.M., 2006. A model for logistics management in a post-Soviet central Asian transitional economy. Journal of Business Logistics, 27 (2), 301331. Rodrigues, A.M., Bowersox, D.J. and Calantone, R.J., 2005. Estimation of global and national logistics expenditures: 2002 data update. Journal of Business Logistics, 26 (2), 116. TNSC, 2005. A survey of logistics export cost. Bangkok, Thailand: Thai National Shippers Council. USAID, 2006. Towards a roadmap for integration of the ASEAN logistics sector. Washington, USA: United State Agency for International Development.
I. Objectives
The objectives of this initiative are to: create an ASEAN single market by 2015 by strengthening ASEAN economic integration through liberalisation and facilitation measures in the area of logistics services; and support the establishment and enhance the competitiveness of an ASEAN production base through the creation of an integrated ASEAN logistics environment.
II. Measures
This roadmap provides concrete actions that ASEAN member countries shall pursue to achieve greater and signicant integration of logistics services in ASEAN, through progressive implementation of the measures, which include the liberalisation of logistics services, enhancing competitiveness of ASEAN logistics services providers through trade and logistics services facilitation, expanding capability of ASEAN logistics service providers, human resource development, and enhancing multi-modal transport infrastructure and investment.
III. Coverage
The scope of the measures will cover freight logistics and related activities. The implementation of the specic measures shall be subject to the relevant national laws and regulations.
IV. Coordination
The Senior Economic Ofcials Meeting (SEOM) shall be the overall coordinating and monitoring body in the implementation of this roadmap, with Vietnam as the country coordinator.
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No. I 1 2 3 4 5 6 7
Measures
Implementing body
Timeline
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8 9
Specic issues Member country shall endeavour to achieve substantial liberalisation of logistics services in the following sectors Maritime cargo handling services CPC 741 Coordinating committee 2013 on services (CCS) Storage and warehousing services CPC 742 CCS 2013 Freight transport agency services CPC 748 CCS 2013 CPC 749 CCS 2013 Other auxiliary services CPC 7512 CCS 2013 Courier services Packaging services CPC 876 CCS 2013 CCS and Customs Coor- 2013 Customs clearance services dinating Committee (CCC) Maritime transport services International freight transportation CPC 7212 CCS 2013 excluding Cabotage Air freight services Implement ASEAN Multilateral Senior Transport Ofcials December 2008 Agreement of the Full LibMeeting (STOM) eralisation of Air Freight Services Rail freight transport services International rail freight transport services Road freight transport services International road freight transport services CPC 7112 CPC 7213 CCS and relevant STOM Working Groups CCS and relevant STOM Working Groups Beginning 2008 Beginning 2008
10 11 II
Enhancing competitiveness of ASEAN logistics services providers through trade (including documentation simplication) and logistics (transport) facilitation Customs coordinating committee (CCC)/Customs procedures and trade facilitation working group (CPTF-WG) CCC/CPTF-WG On-going On-going
II(a) Trade and customs facilitation 12 Implement provisions in the WTO agreement on customs valuation 13 Implement the WCO immediate release guidelines and review, as appropriate, the de minimus levels (value thresholds) for express delivery of air shipments and implement/introduce EDI to speed up customs clearance Promote the implementation of the WCO framework of standards to secure and facilitate global trade Identify suitable standards to secure the interoperability and interconnectivity in facilitating trade within customs jurisdiction, including those of ICT Enact domestic legislation to provide legal recognition of electronic documents/transactions Encourage application of standardised trade data and documents for trade facilitation through the adoption of international standards like WCO data model, UNTDED United Nations Trade Data Elements Directory (UNTDED), UN-eDocs and the electronic submission of trade data and documents for customs clearance
14 15
CCC/CPTF-WG CPTF-WG
On-going 20072009
16 17
372
R. Banomyong et al.
No. 18 19
Measures Adopt service commitments (client service charters) by ASEAN customs authorities Encourage implementation of 24 7 customs operations to accelerate the cargo customs clearance as requested by the industry and subject to the relevant national regulations Promote relevant technologies for advanced information systems to be shared among governmental agencies, shippers, and industry, in advancing supply-chain security initiatives Develop the single window approach for customs clearance Promote the use of Radio Frequency Identication (RFID) (radio-frequency identication) applications to facilitate cross-border use of RFID in trade and customs as well as cross border tracking of goods Facilitate cross border electronic transactions, information sharing, electronic payment, and electronic signatures Encourage enterprises to adopt/develop interoperable supply chain management systems in ASEAN to link up planning solutions, automated storage and retrieval systems, and wireless tracking technologies Enhance cooperation and communications between customs and the business sector including through electronic means Implement risk management practices to facilitate trade, while maintaining effective customs control Enhance transport security and safety in the regional supply-chain networks, through capacity building initiatives, technical networking, and regular exchange of relevant technologies, best practices and information Conduct regular formal dialogues between private sectors, relevant associations, and government related bodies Logistics facilitation Enhance the transparency of domestic regulation for logistics related regulation through timely publication of investment regulation, licensing criteria, licensing decisions by the governments and may facilitate consultation to the private sectors in the policy-making process Conclude and sign the ASEAN Framework Agreement on facilitation of inter-state transport Operationalise the ASEAN Framework Agreement on the facilitation of goods in transit and the ASEAN Framework Agreement on multimodal transport, to promote efcient door-to-door cargo transport and cross-border transport facilitation Improve land transport network infrastructures and services to achieve better inter-connectivity, inter-operability, and inter-modality with the national, regional, and international maritime and air transport gateways
20
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21 22
Customs Enforcement Working Group (CEWG)/STOM/ Telecommunication Senior Ofcials Meeting (TELSOM) ASEAN Single Window Steering Committee(ASWSC)/CPTF-WG/SEOM TELSOM/CPTF-WG/ASWSC
On-going
23 24
25
26 27
CCC/CPTF-WG/ASEAN Freight Forwarders Association (AFFA) and ASEAN Shippers Council CPTF-WG STOM/CPTF-WG
On-going
On-going On-going
28
CCC/CPTF-WG/ASW-SC
On-going
II(b) 29
On-going
30 31
32
STOM
On-going
373
No. 33 34
Measures Strengthen intra-ASEAN maritime and shipping transport services Establish enabling and conducive policy environment for increased private sector involvement and/or publicprivate partnerships in the development of transport logistics infrastructure and the provision and operation of transport logistics facilities and services Identify and develop other mechanisms to further facilitate the movement of natural persons involving logistics services
35
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CCS
On-going
III 36
37 38
IV 39 40 41 42
Expanding capability of ASEAN logistics service providers Adopt best practices in the provision of logistics SEOM/STOM services and support the development of small and medium enterprises (SMEs) in the sector, including the formation of SME networks Promote regional cooperation to assist CLMV STOM countries especially least developed countries Develop and update an ASEAN database on ASEAN Secretariat with logistics services providers with a view to inputs from STOM and enhance the development of networking AFFA activities Hyman resource development Develop and upgrade skills and capacity building STOM, CCCAFFA and other through joint trainings and workshops related bodies Encourage the development of national skills AFFA and other related bodies certication system for logistics service providers Encourage the development of an ASEAN AFFA and other related bodies common core curriculum for logistics management Encourage the establishment of national/subSTOM and AFFA regional centre of excellence (training centre) Enhance multimodal transport infrastructure and investment Identify and develop the ASEAN transport STOM logistics corridor network and formulate the necessary infrastructure development requirements, to support the improvement of inland transport network infrastructure, the inter-modal linkages between connecting modes of transport, to match inland with maritime transport infrastructure and to improve connectivity between ASEAN logistics gateways, among others Promote the usage of trade terms and practices STOM/AFFA related to multimodal transport, including the INCOTERMS (International Commercial Terms)
Beginning 2007
V 43
Beginning 2007
44
On-going
The individual schedule of specic commitments shall be negotiated by the CCS and relevant negotiating bodies. Flexibility to be provided for some member countries in implementation using the ASEAN minus X formula. Include the following activities: bill auditing; freight brokerage services; freight inspection, weighing and sampling services; freight receiving and acceptance services; and transportation document preparation services. These services are provided on behalf of cargo owners. Express Delivery Services will be included in the list of services to be liberalised. These services are recognised to be distinct and separate from postal services. Customs clearance services (alternatively customs house brokers services) means activities consisting in carrying out on behalf of another party customs formalities concerning import, export or through transport of cargoes, whether this service is the main activity of the service provider or a usual complement of its main activity.
374
Attribute ASEAN air transport matrix Liberalised air freight services Pure freighter services Hub for air freight On-airport operations Cargo village On-airport cold storage On-airport storage for dangerous goods Competitive ground handling services Large pallet scanners Quick clearance EDI for cargo manifest
Brunei Yes Planned Planned Partial Planned Partial Planned Planned Partial Planned Partial
Malaysia Partial Yes Yes Yes Yes Yes Yes Partial Yes Partial Yes
Philippines Partial Partial No Yes Yes Partial Partial Partial Partial Partial Partial
Singapore Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes
Thailand Partial No Yes Partial No Yes Yes Partial Yes Yes Yes
Vietnam R. Banomyong et al. Planned No Planned Partial Yes Yes Yes Partial Planned No Planned
Attribute ASEAN customs matrix Electronic single window Integrated border management ASEAN customs declaration documents WCO harmonised system code Customs valuation based on WTO rules Reduced number of tariff bands Computerised input of customs declaration data ASYCUDA or similar system Green Channel Clearance on documents with post-audit Computer-based risk management
Brunei Partial N/A Partial Yes Majority Yes Partial Yes Yes Partial Partial
Cambodia Planned N/A Planned Yes Majority Yes Planned No Yes Partial Partial
Indonesia Partial N/A Partial Yes Majority Yes Partial Yes Yes Partial Partial
Lao PDR Planned N/A Planned Yes Partial Yes Planned No Yes Partial Partial
Malaysia Partial N/A Partial Yes Majority Yes Partial Yes Yes Partial Partial
Myanmar Planned N/A Partial Yes Majority Yes Planned No Yes Partial Partial
Philippines Partial N/A Partial Yes Majority Yes Partial Yes Yes Partial Partial
Singapore Partial N/A Partial Yes Majority Yes Partial Yes Yes Partial Partial
Thailand Partial N/A Partial Yes Majority Yes Partial Yes Yes Partial Partial
Vietnam Planned N/A Planned Yes Majority Yes Partial Planned Yes Partial Partial
376
Brunei ASEAN inland waterway transport matrix Scheduled service Links to main seaport Container vessel for IWT Landlord port Container terminal Portnet or equivalent Direct debit payment system Computerised terminal control system Automated gate entry Off-dock yard Bonded distribution facility Shunting lines to IWT terminal N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
Singapore N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
R. Banomyong et al.
Logistics Services
Brunei
Cambodia No No Limited Limited No Limited Limited Limited Limited Yes Yes Yes Limited
Indonesia Yes No Limited Yes Limited Limited Yes Yes Limited Yes Yes Yes Yes
Malaysia Yes Limited Limited Limited No Limited Yes Yes No Limited Limited Limited Yes
Myanmar No No No No Limited Limited Yes Yes Yes Yes Yes Yes Limited
Philippines Yes Limited Yes Limited Limited Yes Yes Yes No No No Yes Yes
Singapore Yes Yes Yes Yes Yes Limited Yes Yes No Yes Limited Yes Yes
Thailand Yes Yes Limited Limited Limited Limited Limited Limited No Limited No No Yes
ASEAN logistics service providers matrix Domestic containers No Track and trace No Distribution centres No Cross docking facilities Yes National booking centres Yes Standard service contract No House bill of lading No Multimodal transport Yes document Forwarding industry Yes concentration Concentration of foreign Yes LSP Trucking industry Yes concentration Truck leasing Yes Advanced information Yes services
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R. Banomyong et al.
Lao PDR ASEAN ports and maritime transport matrix Direct mainline services N/A Feeder services N/A Regional services (>1500 TEU) N/A Landlord port N/A Container terminal concessions N/A Day of the week shipping services N/A Portnet or equivalent N/A Pilot free entry for large vessels N/A Post Panamax gantry cranes N/A Computerised terminal control N/A system Automated gate entry N/A Off-dock container yard N/A Bonded distribution facilities N/A Full truck scanners N/A Shunting lines to port N/A
Singapore Yes Yes Yes Yes No Yes Yes Partial Yes Yes Yes No Yes Yes No
Thailand Yes Yes Yes Partial Yes No Yes No Yes Yes Planned Yes Yes Partial Yes
Vietnam Yes Yes Yes Partial Yes Yes Yes No No Yes No Yes Yes No No
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Lao PDR ASEAN rail transport matrix Unied gauge Standard gauge Double track Dedicated track for freight services Centralised train control Advanced train control Electried lines Bogie wagons Heavy load wagons Long train Modern locomotives Unit container train operations 24 h freight terminal operations Privately owned rail wagons Private freight train operations Planned No No Planned No No No No Planned No Planned Planned No Planned Planned
Malaysia
Philippines Single gauge No No No No No No N/A N/A N/A N/A N/A N/A N/A N/A
Singapore N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
Yes
Yes
No
379
Road transport ASEAN road transport matrix Multilane dual carriageways Limited access highways Toll roads Ring road around the capital Ring roads around other major cities Partial truck bans in the capital Partial truck bans in other major cities Control of axle load limits Articulated trucks Modern commercial trucks Roadworthiness certicates Pollution control International transport of goods under TIR Temporary importation of road vehicles Temporary admission for containers Harmonisation of frontier control of goods
Lao PDR No No No Yes Planned Yes Yes Yes No Partial Yes Planned Planned Planned Partial Planned
Myanmar Partial No Yes Planned Planned Partial Planned Partial Yes Yes Yes Yes Planned Yes Yes Yes
Singapore Yes Yes No Yes No No No Yes No Partial Yes Yes No Yes Yes No
Thailand Yes Partial Yes Yes Yes Yes Partial Partial Partial Yes Yes Yes No Yes Yes Yes
Vietnam Yes Planned Yes Partial Partial Yes Yes Planned Partial Partial Yes Yes Yes Partial No Partial
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