Government involvement may not be at the appropriate level. In many countries inland logistics centres or nodes are not public assets under the responsibility of Government, unlike rail transport systems, road infrastructure and international ports.
Often the development of inland logistics centres rests entirely with the private sector.
For example, Rosso and others (2006) point out how the European Union has established the major links in the Trans-European Network (TEN) for intermodal transport, but offers no guidelines on the location or the functions of the nodes of the network. The focus on links rather than nodes is typical of many Government s and is reflected in the composition of ministries, which are generally associated with specific transport modes (e.g. Air Ministry) rather than with intermodalism or logistics as an integrated service (OECD, 2001).
Development creates its own congestion through the growth of road transport activity, which in turn may reduce accessibility to the facility (Konings, 1996).
Similarly to the argument about the external benefits of transport in general and dry ports in particular, the external costs need to be evaluated. External transport costs have two major impacts: on the stock of non-renewable natural resources; and through interactions within the transport system3. External benefits of transport would, ideally, compensate for the external costs. However, they may also be seen as internal benefits to the transport operator resulting from lower transport costs or greater efficiency. Therefore, it could be argued that they do not compensate for the external costs of transport. The external costs of transport are many and varied and may be considered in both global and local terms. The local aspects of external costs of transport may be divided into the following:
The environment (pollution and noise) ;
The infrastructure (vibration and road wear); and
Social considerations (safety, congestion, intrusion and community severance).
The discussion of advantages, constituents and critical issues related to dry ports shows that effective development of efficient dry ports has significant legal implications, which will be discussed in the next subchapter.
4.5 Legal implications of dry ports
less of a role in policy associated with inland logistics centres. Therefore, any list of Government responsibilities connected with inland logistics ports should be seen in this context. Furthermore, responsibility of different levels of Government within a nation (local, regional, national) or at the supranational level (e.g. the European Union) may also vary.
4.5.2 The roles of Government
Typical roles adopted by Government may include the following, although not necessarily all of them.
Providing infrastructure (e.g. roads, bridges, port facilities);
Improving safety;
Protecting the environment;
Protecting existing industry sectors;
Promoting new industry;
Improving regional/national competitiveness;
Restricting monopoly power;
Controlling excessive competition;
Integrating land use and transport;
Integrating modes of transport;
Safeguarding social standards (e.g. employment levels);
Promoting access of national carriers to external markets or restricting access of foreign carriers to national markets (e.g. cabotage4 issues); and
Providing statistics (particularly national transport statistics).
In this report, the treatment of legal aspects is restricted to legislation required to implement major changes in logistics systems on a national or supranational basis, that in particular have an impact on the development of inland logistics ports. This report does not consider the many kinds of legislation throughout the world associated with commercial or industrial premises in general and including logistics centres (e.g. health and safety legislation), however legal, institutional and administrative arrangement of major logistics centres for foreign investment is briefly summarized as follows, which could be a reference to policy makers in charge of dry port development. There appears to be some evidence of enabling
4 Cabotage is the transport of goods between two locations in a single country. It has been an issue within the
European Union for various transport modes (e.g. road freight and shipping) when foreign operators have sought the right to transport goods entirely within another member country.
legislation associated with dry ports (see Box 4.4), while legislation to assist in the development of intermodal transport exists in the United States and the European Union (see Annex C and D for more detail), which by association can be considered as a form of legislation for inland logistics centres. This report will therefore seek to extract the relevant aspects from the intermodal legislation.
Box 4.4. Enabling legislative environment for foreign investment in major logistics centres and dry ports Hong Kong, China: Foreign investors can establish companies without approval from authority. No restriction on local labour employment, foreign currency exchange as well as local products procurement. All business areas are open to foreign investment except some public markets (e.g. postal service, water supply service). No discrimination among foreign investors and citizens in administrative treatment and economical activity.
Investment Promotion Strategy Group (IPSG) and InvestHK established to promote foreign investment. Several programs (Investment Promotion Program, Service Promotion Program, High-Profile Brand-Building Program, Helping Business Program) are promoting foreign investment. The Investment Promotion Program and the Protection Agreement (IPPA) signed with Australia, Netherlands, and others. Corporate tax rates are at the lowest level compared to other countries in Asia. No customs duties on foreign-invested companies except alcoholic beverage, cigarette, petroleum, methyl alcohol.
Singapore: One-stop service to foreign investment. No discrimination among foreign investors and citizens in administrative treatment and economical activity. Economic Development Board (EDB) established to promote foreign investment. Various incentives provided to foreign-invested headquarters, namely operational headquarters, business headquarters, manufacturing headquarters, global headquarters. Flexible tax incentive rate for foreign investment.
Netherlands: One-stop service to foreign investment. No discrimination among foreign investors and citizens in administrative treatment and economical activity. Provision of specific information and administration service to foreign-invested companies. EDI network established among ports, inland logistics centres and customs.
NFIA and HIDC established to promote foreign investment. Provision of logistics consulting service through HIDC. Tax exempt up to 30 per cent of foreign worker’s salary.
China: A group of plans concerning logistics development has been established by local or provincial Governments, which refer to the development of inland or coastal logistics centres, the fostering of logistics companies, the strengthening of competitiveness of logistics service, the requirements for administrative arrangements and so on. For example, a plan on logistics modernization, established by Zhejiang Province in 2002, aims at network system upgrading of logistics-related facilities, establishment of information systems and market systems for logistics modernization. A development plan for a logistics hub in South-East Asia, established by the landlocked Province of Yunnan in 2002, aims to facilitate administrative and legal arrangement for logistics system modernization regarding the construction of six logistics centres and related transport facilities such as roads and railways. There are about 3,800 special development zones including logistics centres across the country from coastal area to the deep hinterland, where various legal incentives are provided to foreign and domestic investors in order to consolidate/develop industries and businesses including logistics. Incentives provided at logistics centres can be categorized as land incentive, tax incentive and others such as administrative support.
Japan: Japan has formulated and implemented various logistics-related policies since the 1960s. Those policies cover various items required for efficient and competitive logistics in coastal and inland regions and refer to logistics centres development and upgrading, decrease of logistics cost, logistics modernization, IT development, human resources management, energy and environment issues.
Republic of Korea: ROK started to formulate systematic policies to promote logistics, especially inland logistics in the 1970s and it established a “Five year action plan on logistics modernization” (1970) as well as implemented the “Act on facilitation of logistics modernization” (1970). As a recent example of systematic policies, the ROK formulates the “Basic plan on logistics improvement” annually from 1994 which regulates regional logistics centres development, the establishment of inter-regional transport network, efficient operation of logistics centres, establishment of integrated information system on logistics, administrative and institutional arrangement, and so on. The ROK has also designated some specific inland locations as special zones for foreign investment, where foreign investors can enjoy economic incentives.
Source: ESCAP (2005a), Korea Maritime Institute (2003).