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Logistics Development Study of the GMS NorthSouth Economic Corridor 15
HaiphongKunming subcorridor
The transport infrastructure in the HaiphongKunming
subcorridor of the NSEC is currently undergoing
rehabilitation and the physical links are expected to be
completed soon. The PRC and Viet Nam have signed
an agreement to establish a one city, two country
arrangement at their border towns at Hekou and
Lao Cai. This is expected to provide the impetus for
enhanced border cooperation between the countries.
The panels in Figure 3 illustrate how cost and time
fall along the HaiphongKunming corridor over the three
years, 2000, 2006, and 2015. The data used in this
section are based on the movement of a laden container
based on freight all-kind rate.
Here too, border crossings are again the biggest
bottleneck initially in the effcient movement of goods,
as shown by the steep steps for 2000 (and 2006 to
a degree), though they are not as pronounced as for
BangkokKunming.
Figure 3 also indicates that the shares of cost
and time of transport in the total gradually increase
a little, as the shares of ports, borders, and transit
generally decrease, once more revealing the importance
of effcient border crossings. This, of course, is in a
context of sharply falling total corridor cost and
time.
NanningHa Noi subcorridor
Most traffc at the border gates involves trading
between Viet Nam and the PRC. Transit trade,
such as reexport activities at Lang Son and
Mong Cai to Thailand and Cambodia, is still very
limited. The four-lane expressway linking Nanning
to Youyiguan has been completed, making it
possible to reach the border within 1.5 hours
from Nanning. New facilities at the border crossing have
been constructed and a new PRC logistics park is being
expanded to serve the potential increase in border
traffc. The panels in Figure 4 illustrates the cost and
time components.
16 Logistics Development Study of the GMS NorthSouth Economic Corridor
Figure 3 Cost and time vs distance, HaiphongKunming,
2000, 2006, 2015
400
100 200 300 400 800 900
Cost
Distance
Haiphong port
$772
$1,579
$1,904
Kunming
2,000
0
2000
600
800
200
1,000
1,200
1,400
1,600
1,800
500 600 700
2006
2015
Ha Noi
Hekou
Lao Cai
Hekou
Lao Cai
Hekou
Lao Cai
20
100 200 300 400 800 900
Time
Distance
Haiphong port
26.5 hours
58 hours
85 hours
Kunming
0
2000
30
40
10
50
60
70
80
90
500 600 700
2006
2015
Ha Noi
Hekou
Lao Cai
Hekou
Lao Cai
Hekou
Lao Cai
Note: Costs, in US dollars, are those related to transporting a laden container, based on freight all-kind
rate, 885 kilometers.
Source: Banomyong (2007).
The data used for this corridor are based on the
movement of a 30-ton full truckload (FTL) of steel
products from Nanning to Ha Noi.
The fgure points to a larger relative drop in cost
and time associated with crossing the border than for
transporting goods.
Corridor assessment
In the logistics analysis of the NSEC, the infrastructure
along the corridor is improving, and should be in place
by 2015. The institutional framework, such as the CBTA,
is also in place but actual implementation is still weak
with regard to trade and transport facilitation measures.
This is refected in delays for export and import as well
as the number of documents required.
Logistics Development Study of the GMS NorthSouth Economic Corridor 17
Figure 4 Cost and time vs distance, NanningHa Noi, 2000, 2006, 2015
400
50 100 150 200 400 450
Cost
Distance
Nanning
$270
$790
$1,080
Ha Noi
0
2000
600
800
200
1,000
1,200
250 300 350
2006
2015
Lang Son
Pingxiang
Lang Son
Pingxiang
Lang Son
Pingxiang
10
50 100 150 200 400 450
Time
Distance
Nanning
c. 8 hours
c. 19 hours
37 hours
Ha Noi
0
2000
15
25
5
35
40
250 300 350
2006
2015
Lang Son
Pingxiang
Lang Son
Pingxiang
Lang Son
Pingxiang
30
20
Note: Costs, in US dollars, are those related to transporting a 30-ton full truckload of steel products,
440 kilometers.
Source: Banomyong (2007).
Border crossings are the weakest link in the
NSEC corridors and special attention must be made
to deal with border issues. Time is essential as the
infrastructure is progressing faster than the institutional
arrangements between countries. This is also a reason
that transit trade is currently minimal relative to border
trade.
The level assessment conducted on the various
subcorridors of the NSEC, based on the proposed
classifcation in Table 1 earlier, shows no level 4
(economic) corridors in place along the NSEC (Tables 4,
5, and 6).
The overall level assessment is based on the
weakest link in the corridor. At present, therefore,
the NSEC is still primarily a transport corridor. Some
logistics corridors exist, but only within a country, not
at GMS level. Thus the corridor continues to forgo vast
potential for attracting investments in employment-
generating economic activities. However, if border
18 Logistics Development Study of the GMS NorthSouth Economic Corridor
crossings are improved, transport corridors along the
NSEC will possibly evolve into logistics corridorsand,
with further progress, eventually transform themselves
into fully fedged economic corridors.
Table 4 Level assessment of the BangkokKunming
subcorridor
From To Level
Bangkok Chiang Rai 3
R3W
Chiang Rai Mae Sai/Tachilek 3
Mae Sai/Tachilek Mengla/Daluo 1
Daluo Kunming 3
Via Mekong River
Chiang Rai Chiang Saen 3
Chiang Saen Jinghong 2
Jinghong Kunming 3
R3E
Chiang Rai Chiang Khong/Houayxay 3
Chiang Khong/Houayxay Boten/Mohan 1
Boten/Mohan Kunming 3
Overall level 1
Source: Banomyong (2007).
Table 5 Level assessment of the HaiphongKunming
subcorridor
From To Level
Haiphong Ha Noi 3
Ha Noi Lao Cai/Hekou 1
Lao Cai/Hekou Kunming 3
Overall level 1
Source: Banomyong (2007).
Logistics Development Study of the GMS NorthSouth Economic Corridor 19
Table 6 Level assessment of the NanningHa Noi
subcorridor
From To Level
Nanning Pingxiang 3
Pingxiang Lang Son 1
Lang Son Ha Noi 3
Overall level 1
Source: Banomyong (2007).
References
Banomyong, R. 2000. Multimodal Transport Corridors in
South East Asia: A Case Study Approach. Ph.D Thesis,
Cardiff Business School, Cardiff University, United
Kingdom.
. 2007. Logistics Development Study of the North
South Economic Corridor. Asian Development Bank,
Manila.
Beresford, A.K.C. and R.C. Dubey. 1990. Handbook on the
Management and Operations of Dry Ports. Document
RDP/LDC/7. UNCTAD, Geneva.
Asian Development Bank
6 ADB Avenue, Mandaluyong City
1550 Metro Manila
Philippines
www.adb.org
Publication Stock No. 101307
ISBN 978-971-561-714-7
About the Asian Development Bank
ADBs vision is an Asia and Pacifc region free of poverty. Its mission is to help
its developing member countries substantially reduce poverty and improve the
quality of life of their people. Despite the regions many successes, it remains
home to two thirds of the worlds poor. Nearly 1.7 billion people in the region
live on $2 or less a day. ADB is committed to reducing poverty through
inclusive economic growth, environmentally sustainable growth, and regional
integration.
Based in Manila, ADB is owned by 67 members, including 48 from the
region. Its main instruments for helping its developing member countries are
policy dialogue, loans, equity investments, guarantees, grants, and technical
assistance. In 2007, it approved $10.1 billion of loans, $673 million of grant
projects, and technical assistance amounting to $243 million.
Printed in the Philippines
As one plank in their strategy for realizing a prosperous, integrated,
and harmonious subregion, the six countries of the Greater Mekong
Subregion are developing a modern transport infrastructure.
The NorthSouth Economic Corridor (NSEC)with its three
subcorridors between Bangkok and Kunming, Haiphong and
Kunming, and Nanning and Ha Noiforms a major element in this
infrastructure.
Using cost and time charts, this document analyzes the likely
benefts generated by the NSEC, with a focus on the split between
the cost and time involved in transportation and in border crossing
and transshipment. It also assesses the degree to which the
NSEC, as it moves away from being purely a transport corridor, is
becoming a fully integrated economic corridor.
ISBN 978-971-561-714-7
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