Situation of Transport and logistics inSituation of Transport and logistics inSituation of Transport and logistics in Situation of Transport and logistics in Lao PDRLao PDR

By : By : KhamphengKhampheng VONGKHANTYVONGKHANTYExecutive Director SMT(Executive Director SMT(SocieteSociete MixteMixte de Transport)de Transport)

Board Member of LIFFA Board Member of LIFFA Vice Vice ChaimanChaiman of Road Maintenance Fund ( MPWT)of Road Maintenance Fund ( MPWT)

Board Member of International Commercial Bank (ICB)Board Member of International Commercial Bank (ICB)

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Contents

Country Background Government PolicyyLegal FrameworkA t S tAccess to SeaportCurrent Transport within the Country and in Transit Problems and Obstacles of TransportProblems and Obstacles of TransportImprovement of Transport Industry

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11)) Country BackgroundCountry Background

Land Area : 236 800 km2Land Area : 236,800 km2

Population: 5,6 millions

Population density: 22 persons/km2 (2 5%)persons/km2 (2.5%)

Border sharing with gVietnam, China, Myanmar, Thailand and Cambodia

The economy Based on Agriculture accounting for 50% of GDP50% of GDP

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-- 22)) Government PolicyGovernment Policy22)) Government Policy Government Policy

1. Improve transport services to encourage the development of production and trade

2 Transform landlocked to land-linked2. Transform landlocked to land linked

3 Remove obstacles from the flow of goods3. Remove obstacles from the flow of goods

4. Develop System of Services along the Transit Routes

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33 Legal FrameworkLegal Framework33.. Legal Framework Legal Framework

1. Road Law

2. Land Transport Law

3. Road Traffic Law

4. MT law (complete on the drafting basic)

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33)) Legal framework (Cont )Legal framework (Cont )33) ) Legal framework (Cont.)Legal framework (Cont.)

Bilateral Agreements of Cross Border Transport withTransport with

○ Cambodia○ China○ China○ Thailand○ Vietnam

Trilateral Agreement of Cross Border Transport among Lao-Thai-VietnamMultilateral Agreement of Cross Border Transport among Lao, China, Thailand, Vietnam and CambodiaVietnam and Cambodia.GMS Cross Border Transport Agreement (CBTA)

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(CBTA)

44) ) Access to seaport Access to seaport

The access to sea portThe access to sea port

1. Via Vietnam

2. Via Thailand

3. East West Economic Corridor

4. North-South Corridor

5. Railway Boten-Vientiane

InfrastructureInfrastructureB id th M k RiBridges over the Mekong River

Thanaleng - NongkhaiSavannakhet - MukdaharnThakhek - Nakhorn Phanom (2012)( )Houay Xay – Chiang Khong (2015)

Railway LineRailway LineKun Ming – Vientiane – Bangkok (FS)

Infrastructure (cont )Infrastructure (cont.)Logistics Park Projects

Vientiane (near Thanaleng railway station)( g y )SavannakhetPaksePakse

Airports (international)Vi tiVientianeLuang PhrabangSavannakhetPakse

55) Current Transport within the country and in transit) Current Transport within the country and in transit55) Current Transport within the country and in transit ) Current Transport within the country and in transit

I T it1. In TransitVia Vietnam

- Main routes: No 8 and 9Liberalization of transport operation since 1991- Liberalization of transport operation since 1991, revised 1999

- Vietnam has many ports for Lao goods in transit i ll V A t f t t ti l t

y p gspecially Vung Ang port future potential sea port

- SSI & SWI implementation (CBTA)Lao goods via Vietnam less than via Thailand- Lao goods via Vietnam less than via Thailand due to long distance, full capacity of truck loading

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-- Current Transport within the country and in transit Current Transport within the country and in transit

Via Thailand

1978 Agreement- Monopolized trucking operator- Escort needed ( 2 trucks per escort )Escort needed ( 2 trucks per escort )- Restriction of Lao trucks to go into Thai Territory - Complicated documents and procedures

1999 Agreement, implemented in March 2004- Liberalization of transport operators- No escort- Lao trucks are able to go into Thailand with full round tripLao trucks are able to go into Thailand with full round trip- Reduction of some unnecessary documentations and

proceduresTransport cost reduced approx 30%

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- Transport cost reduced approx. 30%

--Current Transport within the country and in transit Current Transport within the country and in transit p yp y

2. Within the country ● Multi-inspections along the ● Roads have been improved and shorten the traveling time

p groad

● High competition in Transport● Distance Vientiane – Botenapprox. 700 km need 25-30hrs traveling time whereas previously 3 d

● High competition in Transport business

p ydays

● EWEC corridor 230 km need 4-5 hrs traveling ti

● Foreign trucks are able to provide door to door service and load cargo for their returngtime

● NSC corridor 250 km need 5-6 hrs traveling time

a d oad ca go o t e etu

● High transportation cost5 6 hrs traveling time

• Trucks not been used full capacity (empty backhaul)● License for transport business

issued for company limitedbackhaul) issued for company limited and individual

66) Problems and Obstacles of Transport in Laos) Problems and Obstacles of Transport in Laos

Accessibility

- Roads under maintenance Long Traveling time due to mountainous roads, g g ,

- Road bearing capacity lower than those of neighboring co ntriescountries

- Multimodal transport not yet implementedMultimodal transport not yet implemented

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66) ) Problems and Obstacles of Transport in Problems and Obstacles of Transport in )) ppLao PDR (cont)Lao PDR (cont)

Low capacity of competitivenessLow capacity of competitiveness

- Transport Operators with low competitiveness:

- Less skill of transport management

Only few Lao trucks go through Vietnam and Thai territory due- Only few Lao trucks go through Vietnam and Thai territory due to low capacity of Lao transport operator

- Too high charge of transit warehouseg g

- Transshipment needed at border checking point due to different permissible axle load

- Lack of standard warehouse at many border check points

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--66) Problems and Obstacles of Transport (cont )) Problems and Obstacles of Transport (cont )66) Problems and Obstacles of Transport (cont.)) Problems and Obstacles of Transport (cont.)

- Cumbersome Import Export procedures

- Duplicate inspections

- Insufficient enforcement of Law and regulationsInsufficient enforcement of Law and regulations

Low technical standards of trucks- Low technical standards of trucks

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77)) Improvement of Transport and logistics IndustryImprovement of Transport and logistics Industry77) ) Improvement of Transport and logistics Industry Improvement of Transport and logistics Industry

1) Improvement of legal framework

2) Build and improve transport facilities:

G d di t ib ti t- Improve appropriate

related Law regulations

- Goods distribution center

- Parking rest areasrelated Law regulations

- IT Systems to be utilized

Parking, rest areas

- ICD at the border checking i

yfor customs declaration

Effective implementation

points

Improve management and- Effective implementation of CIQ,SSI & SWI

- Improve management and services currently provided at the existing transit warehouseswarehouses

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77) Improvement of Transport Industry (cont.)) Improvement of Transport Industry (cont.)

3) Support human resources and capacity building

4) Improvement of training/learning systems oftransport /forwarding/logistics, integrated withvocational training center or university

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THANK YOU FOR YOUR KIND ATTENTIONTHANK YOU FOR YOUR KIND ATTENTIONTHANK YOU FOR YOUR KIND ATTENTIONTHANK YOU FOR YOUR KIND ATTENTION

Q & AQ & A