KEDGE EXPERT OPINION – 10.11.2020
A lack of free ports, hinders French competitiveness
By Alexandre Lavissière,
Professor of Logistics, Transportation, Supply Chains, International Trade and Strategy for KEDGE
Free logistics zones have existed since ancient times, but they are still relatively uncommon in France. For logistics experts, however, these zones speak to the high quality of international supply chain management. According to KEDGE professor Alexandre Lavissière, French ports are facing fierce competition from neighbouring countries. Establishing free zones should be part of any future port strategy for the country.
A free port is a logistics zone that enjoys a special extra-territorial customs status. Most often granted to seaports, these days airports and, increasingly, river and dry ports may enjoy this status as well.
High-quality logistics zones
These types of logistics zones are under customs control, meaning that the goods stored there are not subject to customs duties so long as they have not definitively been put on the market. The business can then process them or ship them elsewhere either without paying customs duties or only paying duties for those goods sold within the country.
In addition to customs considerations, free economic zones can offer tax advantages to those who operate within them. These tax benefits are not a mandatory part of free economic zones, but they are often cited as an argument against establishing such zones. In Europe, nearly every country has at least one free logistics zone with tax benefits. Albania, Sweden, France and Belgium are the only exceptions.
The British threat
The United Kingdom is planning to create six free ports post-Brexit. England is hoping to attract trade that would normally go to Europe and provide a site for value-added processing close to the market. These free ports pose a threat to European ports in general and French ports in particular.
Possible solutions for French free ports
The future of logistics relies on three factors :
- Networks: In the 21st century, French free ports must establish partnerships with free economic zones that depend on the shipping routes associated with the existing host ports in France. The goal is to facilitate transit for international shipping operators and reduce administrative red tape as much as possible.
- Operational excellence: free ports in France must be models of global logistics excellence, the Silicon Valley of logistics. This means providing optimisation services for all types of flows: physical (cutting-edge warehouses, flexible factories, industry 4.0), organisational (seamlessness, digitisation, single window, safety and security, audits), digital (blockchain, traceability, cybersecurity, data production, hackathons), human resources (attracting the best managers and the best operational teams, training elite logistics workers, developing cutting-edge R&D, sharing expertise) and financial (funding innovative projects)
- Sustainable development: To attract investment and talent, you must offer a sustainable, economically viable and equitable solution that has a positive impact on the environment.
- If French ports wish to avoid being relegated to second-rate status as globalisation advances, they must adapt to this new reality.
Read the entire piece on The Conversation : https://theconversation.com/labsence-de-zones-franches-portuaires-un-handicap-pour-la-competitivite-francaise-146796
Alexandre Lavissière is at your disposal should you have any requests for an interview or coverage on this topical subject.
About Alexandre Lavissière
Alexandre Lavissière is an Assistant Professor specialising in logistics strategies. After earning his diploma from KEDGE Marseilles in 2004, he worked for 10 years as a consultant for various companies, governments and international institutions in over 20 countries. While employed as a consultant, Alexandre began working towards a doctorate at KEDGE. He defended his dissertation on free ports in 2014. Since then, he has been working for the Port Institute for Education and Research in Le Havre. His research focuses on international trade, logistics and transportation, free ports, port marketing and ground-handling services at airports. Alexandre has been published in international journals and in economics publications. He has been awarded two prizes for his research and led two teams of students that won the PEMA Challenge, an international student competition. Alexandre Lavissière has taught as a visiting professor at the University of North Florida, HELP Kuala Lumpur and ESA Beirut. He is also a World Bank expert for issues pertaining to logistics in the Middle East and North Africa.
- https://theconversation.com/le-brexit-va-nous-renvoyer-face-a-nos-ports-74582
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Titiane LUGAND titiane.lugand@kedgebs.com
