Air Cargo beyond Trade Barriers in Africa

Abstract

We develop a methodology based on two important criteria -sensitivity in delivery time and value-to-weight ratio -to classify air cargo products. The classification is applied to evaluate the trade integration in Southern Africa since air cargo is a valuable option to overcome trade barriers associated with poor land transport infrastructure and corruption. We find that South Africa's exports to industrialized countries consist of precious products such as diamonds and gold. These products tend to be transported in the hand baggage of a security personnel as they leave the loading weight of an average airplane almost unaffected. When correcting African trade for these 'invisible outliers' in the loading freight, we find that African trade integration including Southern Africa is based upon a comparatively higher share of air cargo relevant products than Southern Africa's trade with industrialized and emerging economies. A more liberal market for air cargo services can reduce transport costs and will allow the continent to integrate even further.JEL Classifications: F10, F14, F15, L93

Is a 'Factory Southern Africa' Feasible? Harnessing Flying Geese to the South African Gateway

“…South Africa's excellent flight connections also matter for moving goods; albeit less bulky ones than those usually transported by rail and road -gold, platinum or even vegetables as opposed to coal. Dettmer, Freytag and Draper (2014) show that South Africa exports a much larger share of products with high air cargo relevance to Mozambique, Zambia and Zimbabwe than to industrialised countries. Hence, air cargo transport appears to be a valuable option to overcome trade barriers associated with land transport, including corruption at border stations (more on this in section 3.5).…”

A meta-synthesis of trade logistics influence on international trade

“…In their study on air cargo in South Africa, Dettmer et al (2014) concluded that a more liberal market for air cargo services could reduce transportation costs and encourage further integration. Despite the fact that ports have the greatest impact on trade (Nordas and Piermartini, 2004), port productivity may have a substantial impact on transportation costs.…”