Which issues need to be addressed in the context of dealing with criminal activities,
particularly the payment of speed money? Putting in place effective enforcement
mechanisms to discourage such practices is only one part of the equation. It is also
necessary to look at the broader logistics environment and the extent to which it creates
incentives for operators and officials to engage in corrupt activity. Olken and Barron
(2009) show that in the trucking sector in Indonesia, for example, corrupt payments are
usually solicited at points of exogenous delay in the supply chain, such as police
roadblocks or weigh stations. It is therefore necessary to examine the regulatory and
enforcement environment surrounding trade logistics in general in order to find ways
to reduce the incidence of such blockages, and thereby decrease the opportunities for
hold up problems – where corrupt payments are frequently sought – to occur. Shepherd
(2009) has shown that the same logic applies to border clearance regimes: longer official
delays make it more likely that operators pay speed money in order to circumvent
them. Trade facilitation initiatives that aim to improve the trade logistics environment
by reducing red tape delays can therefore also have the added benefit of reducing
incentives to pay speed money.
Challenge 10: an emerging issue: “green” logistics
The environment is an important element of the inclusive development agenda.
Logistics service providers are increasingly taking account of the environmental
consequences of their industry’s activities. Transport, for example, produces emissions
of carbon dioxide and other polluting gases. Disposal of packaging material also has
environmental implications. Efforts are underway within the industry to limit its
environmental footprint, particularly in high-income countries. Developing countries
are also seeing moves toward “greener” logistics, which are often driven by large, lead
firms in transport and logistics value chains, as well as demand from shippers.
The 2012 International LPI survey asked respondents to indicate how often shippers
ask for environmentally friendly options. A response of 1 indicates “hardly ever” and a
response of 5 means “nearly always.” Figure 3 shows that shipper behavior is clearly
changing in the Asia-Pacific region. Demand for environmentally friendly options is
strongest in the East Asia sub-region, no doubt because of the prevalence of developed
economies in that group. It is weakest in South Asia. However, the spread of scores
is relatively modest compared with other LPI indicators, which indicates that the
prevalence of green logistics in the Asia-Pacific may be somewhat more homogeneous
than other factors, such as infrastructure or service sector development.