Transport Logistics

4.6. Regional issues

The volume of both domestic and international logistics flows has increased rapidly in Asian

countries in response to the expansion of global operations. Significant logistics infrastructure

development is occurring in some countries in Asia. The extensive distances between countries within

the region are motivating development of air, sea and intermodal transportation.

However, logistics infrastructure and institutional measures in Asia lag far behind developments

in North America and Europe. Congestion on streets, at ports and at airports reduces logistics

efficiency. The lack of sufficient infrastructure therefore becomes a source of bottlenecks in the

performance of logistics operations and can be a barrier to economic development.

Reasons contributing to the lack of efficiency in transport logistics throughout Asia include

insufficient funds for infrastructure provision, poor policy direction by governments, prioritisation of

policies that favour industrial sector growth, and inability to meet the demands created by high

economic growth.  Transport policy is characterised by a lack of understanding of the importance of

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developing efficient logistics infrastructures and places priority on passenger transportation (e.g.

prohibiting trucks on roads during weekends). These disparities in policy making affect the balance

between the supply of and demand for logistics infrastructure.

Another common feature in the Asia-Pacific region is the emphasis placed by governments on

infrastructure improvement as a public good. However, most developing countries in the Asian region

lack the necessary funds to improve the logistics infrastructure and to develop institutional solutions to

logistics problems.

Since public funds are not sufficient to meet growing service-oriented demands for new and

improved logistics, various private funding schemes are emerging. This could be recognised as a

positive characteristic of the Asian region. Several countries are actively applying Private Financing

Initiative (PFI) methods to develop civil infrastructures, including additional roads and ports. The

Build-Own-Transfer approach has been adopted in some Asian countries, but with mixed results.