The Role of Transport Infrastructure, Logistics, and Trade Facilitation in Asian Trade

Abstract

The impact of the quality of transport infrastructure and logistics services on the level of trade among the countries of East and South Asia is less significant than it used to be. This is so because dramatic improvements have taken place in both infrastructure and services over the last three decades. The dominant mode for freight transport between these two regions remains ocean transport, and this situation is expected to continue for the foreseeable future. Land transport, both road and rail, will have an increasing role in bilateral trade within Asia. It may also facilitate trade between noncontiguous countries within South and East Asia, but this will require a significant improvement in border-crossing procedures. It is unlikely that land transport will attract a substantial share of trade flows between the two regions within the next decade, despite efforts to develop various links of the Asian Highway and the Inter-Asian Railway. Air transport is growing in importance as the value of commodities traded between the two regions increases. However, the growth in airfreight has lagged behind that of ocean transport and is expected to continue doing so.