Marie-Eve Rancourt, Jarrod Goentzel
Partner: United Nations World Food Programme (WFP)
This project modeled transportation pricing for the WFP’s Ethiopian supply chain.
Empirical research characterizing transportation markets in developing countries is scarce. By analyzing contracts between the World Food Programme and private carriers, this project identified the determinants of transportation tariffs in Ethiopia and quantified their relative importance. The econometric models devised from WFPs unique dataset provided insights for shippers to improve procurement processes, for carriers to develop competitive business models and for government authorities to define effective investments and policies. Results indicated that the number of carriers on a given lane significantly reduces transportation tariffs and that policies stimulating competition may be as important as road infrastructure investments in Ethiopia’s development strategy.