1. Trade and transport facilitation

1. Trade and transport facilitation

Reducing waiting times in seaports for ships and their cargo has a direct bearing on trade costs. First,
from the shippers’ perspective, it implies lower costs associated with the holding of inventory en route to
the final destination. It has been estimated that each additional day cargo spends in transit is equivalent to
an ad valorem tariff of 0.6 to 2.1 per cent (Hummels and Schaur, 2013). Second, waiting times also imply costs
to the carrier, which will ultimately have to be passed on to the client through higher freight charges. Wilmsmeier
et al. (2006) estimated that a 10 per cent reduction of the time it takes to clear customs implies a reduction of
the maritime freight of about 0.5 per cent.
Different trade facilitation measures can be implemented
to reduce waiting times and improve the logistics
performance of countries in other ways. It has been
suggested by UNCTAD (2015) that the transparent
publication of trade-related information (such as measures
included in article 1 of the WTO TFA) as well as the
simplification and reduction of customs formalities (such
as measures included in article 10 of the WTO TFA) have
a particularly high statistical correlation with a country’s
ranking in international logistics benchmarks, such as the
World Bank Logistics Performance Index (figure 3.2).e