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1.11 Because export and import statistics are available at a very disaggregated level (to the five-digit level in the CCIS code for example), freight factors for a given country can be calculated by product and by destination. These data constitute the "ad valorem transport cost profile" of a country. Comparing profiles for a particular year with those of a several-year average and comparing profiles across countries makes it possible to detect anomalies that suggest the presence of excess costs, and unusually high freight rates and to identify products and transport chains with potential bottlenecks or restrictions. These calculations, however, must be supplemented and verified by comparisons with surveys of shipping companies, forwarding agents, marine insurance brokers, and port authorities (verification of port tariffs and handling costs), and with spot applications of shipping cost models.

1.12 The figures in Table 1.2 must be viewed with caution because of technical problems in gathering information and because the freight rates derived do not necessarily reflect the long-term level of transport costs. However, they point out some differences in transport costs among Maghreb countries and between Maghreb countries and the rest of the world. For instance, freight and insurance costs are five times higher in Maghreb countries than in the European Union and twice as high as in developing countries. Many factors affect the ad valorem incidence of transport charges. This study characterizes and quantifies them, estimates their impact on Maghreb countries, international trades, and proposes corrective measures.

# **D. The Current Account Approach and its Limitations**

1.13 The components of the Current Account also throw light on the relative importance of freight and transport costs in a given country (Table 1.2). The sum of "shipment" debits and credits, representing both freight and insurance costs, varies from 3.5 % (Algeria, Tunisia) to 7% (Morocco) of the total f.o.b. value of merchandise imports and exports. This ratio will be referred to as the "nominal shipment rate." These percentages are modest. But compared with the Current Account balance, these transport costs are very significant. In Algeria they equal half of the Current Account surplus posted in 1990. In Morocco, if they were reduced by 25%, the Current Account deficit would be eliminated.

1.14 In addition to calculating the freight factor, the Current Account approach allows to estimate the whole cost of the transport chain and to express this cost as a percentage of the total f.o.b. value of the merchandise. This percentage is equivalent to a "nominal transport rate," obtained by adding the "other transportation" credit and debit lines of the balance of payments and a fraction of "other goods and services" debit and credit lines to the components of the nominal shipment rate.

1.15 More detailed analysis of excess costs (presented in the following chapters) reveals two basic limitations of the Current Account approach. First, Maghreb countries do not report and record merchandise and service transactions in the same way. Second, the figures are highly aggregated, without any breakdown of costs by product, by mode of handling, by port, or by origin and destination. These detailed data can only be obtained from local surveys.