Infrastructure Needs To Catch Up

Container traffic in South Asia has increased fourfold since the past decade, but logistics infrastructure has not geared up to support the rise in flow of cargo. South Asian economies need to put a concerted effort to resolve logistics issues that could have interrelated angles rather than implementing isolated measures.

- Matías Herrera Dappe & Ancor Suárez-Alemán

South Asia’s trade almost doubled in the past decade, with trade as a percentage of GDP increasing by 18 percentage points between 2000 and 2014.Trade accounted for a smaller share of GDP in South Asia (47 per cent) than in East Asia (55 per cent) in 2014. Since 2000 the region has also enjoyed the second-highest economic growth in the world (after East Asia), growing at an average annual rate of 6.8 per cent.

Since 2000, container traffic in the region increased by a factor of more than four. Capacity also increased, but it grew much more slowly than cargo growth. As a consequence of the growth in trade traffic, congestion at container ports across South Asia increased between 2000 and 2012. Ports have offset longer waiting times by improving the efficiency of their operations at the berthing stage. More efficient use of port facilities, together with improvements in the scale of operations,were the main drivers of increase in total factor productivity (TFP) in South Asia. On average, South Asian container ports experienced the largest improvement in TFP among ports in the Indian and Western Pacific Oceans (80 per cent versus 55 per cent for East Asia) between 2000 and 2010.

Drivers for container throughput