company samples for Route type B, and 30 trucking company samples for Route type C. Overall 34 routes were surveyed (12 type A routes, 14 type B routes, and 8 type C routes). The survey questionnaire is available on request.

# **Box 2: Route-specific trucking survey in Malawi**

To complement the spatial analysis for better spatial prioritization of transport infrastructure investments, the World Bank financed a route specific trucking survey in Malawi during November, 2008. Survey routes were identified with the help of IHS2 data and consultation meetings with the trucking survey company and the Bank staff. Three types of routes are identified: (i) Route type A: connecting high agriculture activity areas (IHS2 EAs with high agriculture production) and major cities in Malawi, (ii) Route type B: between high agriculture activity areas and exporting ports in neighbouring countries, and (iii) Route type C: between major cities in Malawi and exporting ports in neighbouring countries. The surveyed origin and destination locations are listed below.

<u>The origin and destination for Malawi trucking survey</u> <!-- Start of picture text --> High agriculture activity Major cities Exporting ports<br>Areas (towns) in Malawi in neighboring countries<br>TA Mpherembe (Mzimba) Blantyre Beira (MZ)<br>TA Kaluluma (Kasungu) Lilongwe Dar es salam (TZ)<br>SC Njombwa (Kasungu) Mangochi* Durban (RSA)<br>TA Santhe (Kasungu) Mzuzu Mtwara (TZ)*<br>TA Wimbe (Kasungu) Thyolo Nacala (MZ)*<br>TA Dzoole (Dowa) Zomba* Quelimane (MZ)*<br>SC Chakhaza (Dowa) * no survey response * no survey response<br>TA Kalolo (Lilongwe)<br>TA Zulu (Mchinji)<br>TA Chimaliro (Thyolo)<br><!-- End of picture text --> The contracted trucking surveyors visited the identified origin locations in Malawi and collected aforementioned route specific information of 130 samples (70 samples from 20 trucking companies and 60 samples from 60 truckers). Specifically, 50 trucker samples are surveyed for Route type A, and 10 trucker samples for Route type C; and 40 trucking company samples for Route type B, and 30 trucking company samples for Route type C. Overall 34 routes were surveyed (12 type A routes, 14 type B routes, and 8 type C routes). The survey <u>questionnaire is available on request.</u> 21. There are several factors that explain differences in prices across these routes. First, small loads and short trips play an important role as fixed costs are distributed over small units (see Table 4). Notice that prices per ton across routes are in a comparable range – 19,300 kwacha on domestic and 24,400 on international routes. However, with a yield of around 1 ton per year per hectare for a farmer, and with less than 5000 kilometers per year per truck - fixed costs on domestic routes are much higher than for international transport; therefore, unit transport are much higher. In addition, the domestic and international routes are significantly different to a point where most operators on international routes (if they had excess capacity or wanted to compete because of a more attractive price per ton/km) could not operate with their present fleets on domestic routes (their trucks could simply not run on some of these roads), neither would expected profits warrant their trouble to go after such traffic (as large trucks on international routes would be using a small portion of their capacity and prices expressed in tons per kilometer would shoot up).

22. Regression analysis is used to quantify the contribution of various factors to transport costs. Table 5 reports findings from an OLS specification. The sample in column 1 includes both domestic and international routes; column 2 is limited to domestic routes. First, the price charged to transport freight (per ton) depends on trip distance. Controlling for trip distance

- 10 -