Improving Transnational Transport Corridors
In the OIC Member Countries: Concepts and Cases
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Figure 5: Truck Freight Rates in US$ cent/ton-kilometer
Source: Asian Development Bank (2016).
Corridor related investments in road infrastructure are expected to “bring large cost savings
and support faster economic growth. Altogether, the program highlighted above would reduce
by 29% Myanmar’s transport costs—20% for passengers and 36% for freight. For a cost of $5
billion–$6 billion, it would bring $84 billion in cost savings over 15 years. These savings could
in turn raise Myanmar’s economic activity by 13% by 2030, an increase in GDP of $40 billion.”
The effects would not be limited to the road sector, but “would also strongly improve the
competitiveness of rail and river transport. By 2025, rail’s share could reach 34% in passenger
transport and 7%–12% in freight transport. River transport’s share would keep on shrinking
for passenger transport to 0.3%, but could rise for freight transport to 18%.”
According to Woxenius (2006) the cost-cutting race in the manufacturing industry has resulted
in global sourcing of components. This spatial extension of production networks is a clear
challenge to managers that are accustomed to reduce lead times by geographically contracting
supply chains rather than expanding them. Woxenius (2006) further focuses on time as a
reflection of distance and analyses the effects of extending production networks from within a
mature economic region to adjacent, nearby, and distant low-cost regions. The character of
component sourcing from distant regions is significantly affected by a supply gap between sea
and air on the opposite ends of the time, cost, and capacity scales for traffic modes. To
operations, the supply gap implies that much of the freight is transported too expensively or
too slowly, leading to serious impediments for component trade between continents.
Rail connections are well fit to close the gap between air and sea, as can be seen from the
emerging rail connections linking East and West on a long distance (China) Rail will connect
continents (Maitra, 2014, Yoosefzadeh, 2012), stretching corridor lengths. Corridors tend to
becoming detached from countries where they are running through. One of the solutions is