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IDB supports Colombia’s National Logistics Policy

Measures to reduce costs and delays for exports and imports and improve competitiveness by optimizing logistics and freight transport

Colombia will advance its National Logistics Policy with the help of Inter-American Development Bank (IDB) support for a reform program to modernize logistical and freight transport systems.

The program aims to improve Colombia's competitiveness by reducing logistics costs and time required to process imports and exports as well as internal commerce. Specifically, the program seeks to contribute to the institutionalization of the National Logistics Policy by: 

  • Strengthening the institutional and logistical information framework;
  • Spurring intermodal transport, urban logistics, and specialized logistics infrastructure;
  • Improving foreign trade monitoring and facilitation;
  • Fostering environmental sustainability and strategies to mitigate climate change, such as sustainable freight logistics; and
  • Establishing transport policy and regulation, particularly for freight transported by motor vehicles that will promote the sector’s modernization. 

These activities are part of a package of measures that Colombia has committed to carry out under an IDB policy based loan (PBL) for $300 million. PBLs are flexible, fast-disbursing instruments that provide IDB borrowing member countries with resources to finance priority programs. Program results must be verified as a condition for continued disbursements.

Due to Colombia's geography, issues related to logistics and cargo transport play a major economic role. For example, transport within the country accounts for 56 percent of the total cost of exporting a container, while the average cost in South American countries is 41 percent.

Although efforts have been made to modernize these sectors by investing in policy, institutional, and regulatory reforms, the country still has a long way to go. The continued growth of foreign trade, which tripled between 2002 and 2009 with an annual growth of 15 percent, together with rising domestic demand, requires improvements in both regulation and planning for investments in transport infrastructure and providing logistics services of high added value, mainly by the private sector.

Activities to be carried out in the National Logistics Plan include improving the quality of information on freight, streamlining and modernizing processes that regulate trade, promoting the use of information and communication technology, and implementing more sustainable environmental measures.

The IDB loan is for a period of 20 years with a grace period of five years and an interest rate based on LIBOR. The executing agency is the National Planning Department (DNP). This loan is the first of two independently funded operations.