# **1. Introduction**

In recent years, there has been renewed interest in understanding the nature of constraints that freight costs impose on trade, investment, and growth, especially in landlocked countries in Sub-Saharan Africa (SSA). There is a consensus about the need for African countries to have an efficient and low cost transport system in order to become competitive in the global market, even though this does not guarantee successful exportations. Longer transport time which leads to slow import processes, dramatically reduces trade (Hummels and Schaur, 2012). The delays and the unpredictability increase inventories and result in uncompetitive exports. In the case of ports, long cargo dwell times (CDT) are a critical issue. More than half of the time needed to transport cargo from port to hinterland cities in landlocked countries in SSA is spent in ports for land transport to landlocked countries (Arvis _et al._ , 2010).

Over the last decade, the international donor community has been investing in projects that facilitate trade and improve trade logistics in the developing world. These projects have assumed incorrectly that customs, terminal operators and other controlling agencies are solely responsible for the long delays in ports, with infrastructure coming in second. In reality, customs’ responsibility (especially for month-long delays) may not be as important as usually perceived and in-depth data collection and objective analysis are required to determine the actual drivers of long cargo delays. Such analysis has been lacking so far.

This study is part of a larger project conducted by the World Bank in 2011 which made possible the collection of data from firm surveys in several SSA countries. The paper analyzes cargo delays in ports based on data collected from the surveys conducted in Kenya, Nigeria<sup>2</sup> , South Africa, Uganda, and Zambia. The surveys were conducted from March to July 2011. Each of these surveys includes about 100 observations. Importers - manufacturers and retailers - from the most important sectors have been covered. The ports covered are (South Africa), Mombasa (Kenya), and Lagos (Nigeria). The eligibility condition to qualify for the survey was that the firms import containerized cargo.

The study attempts to identify shippers’ demand and practices related to cargo dwell time and perception and how it is linked to private sector market structure.

The findings indicate that several factors have a major impact on cargo dwell time, such as importers and customs and freight forwarders’ (C&F) professionalism, cash constraints and strategies. This is actually a strong specificity in SSA. Market structure of the private sector also seems to explain the hysteresis of cargo dwell time.

C&F concentration has two main adverse effects on dwell times: the first one is the low negotiating power of clients with the main C&F agents that leads to low level of service, the second is the development of low cost unprofessional C&F agents that have no choice but to compete on price at the expense of quality for the rest of the market and allow to keep a system based on rent accumulation by public and private agents.

> 2 Nigeria was selected because it undertook a major port reform but has continued to suffer from long dwell time. It is one of the most important African economies.

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