Determinants of Cross-Border Logistics Performance in East African Community

Abstract

Efficient and reliable cross-border logistics performance is central for economic integration of regional trading blocs, particularly the East African Community (EAC) with three landlocked countries. Despite the economic growth in individual member countries, an optimum level of economic integration is yet to be achieved, with the region incurring some of the highest cross-border logistics costs in the world. To improve this, the study assessed the key determinants of cross-border logistics performance within the EAC. A cross-sectional research design was adopted with a sample of 376 respondents selected from the Malaba, Busia and Taveta-Holili One Stop Border Posts (OSBPs). Questionnaires and key informant interviews were used to collect data. The questionnaires were tested to establish their reliability and validity. Similarly, the nature and strength of association between independent variables and dependent variable was tested using pearson product moment correlation coefficient. Multiple regression model was used for inferential analysis against sub variables of the main independent variables. The findings showed that six sub-variables of customs clearance procedures accounted for 65.6% changes in cross-border logistics performance, six sub variables of customer service quality accounted for 58.1%, four sub variables of information technology accounted for 58.2% and five sub variables of stakeholder co-operation accounted for 67.2%. All the sub variables had positive and statistically significant relationships except online declaration (β = -0.264, p<0.05) and harmonization of customs procedures (β =-0.196, p<0.05). Therefore, it was concluded that overall efficiency of customs clearance procedures, customer service quality, information technology and stakeholder co-operation determine cross-border logistics performance within the EAC. The study recommends that the EAC member states should fast-track the full implementation of the OSBP strategy and full roll out of the East African Community Single Customs Territory (EAC-SCT) to improve cross-border logistics performance within the region. The study recommends that future studies should expand their scope to include other OSBPs, examining other factors particularly the Covid-19 pandemic as well as the economic and political landscapes in the EAC member states. This will enrich existing literature on the impact of pandemics on cross-border logistics performance. Finally, considering the fact that this study was under pinned by the theory of regional integration and the logistics performance theory, the study suggests that future studies should go an extra mile and employ other theories.