SERVICES: SECTOR BY SECTOR

Services auxiliary to all modes of transport — Logistics services

Logistics services facilitate the international flow of goods and enable the operation of global and regional supply chains. Logistics services are also traded in their own right and constitute an important industry in many economies. The rapid development of information technology and the evolution of ways of doing business, including outsourcing, have fostered rapid growth for trade in logistics services .

The sector includes cargo handling services, storage and warehouse services, and freight transport agency services, including other supporting and auxiliary transport services (freight brokerage services; bill auditing and freight rate information services; transportation document preparation services; packing and unpacking services; freight inspection, weighing and sampling services; and freight receiving and acceptance services). These are typically considered as core logistics services.

Current commitments and exemptions (as of end-2020)

A total of 38 members (counting EU-25 as one) have undertaken commitments on cargo handling, 47 on storage and warehousing, 43 on freight transport agencies and 33 on other auxiliary services (excluding commitments on maritime auxiliary services under the Maritime Model Schedule). Thirteen members have listed MFN exemptions in the sector.

Treatment of the sector in negotiations

Services auxiliary to all modes of transport, like other services covered by the General Agreement on Trade in Services, were included in the services negotiations that began in 2000.

Proposals on services auxiliary to all modes of transport and logistics services

In 2004, for the first time in multilateral negotiations on trade in services, a group of members proposed that logistics services be treated as a distinct sector. They defined logistics services as “dealing with the supply chain process that plans, implements, and controls the efficient and effective point-to-point flow and storage of goods, services and related information, throughout the production, distribution and delivery stages, from the initial suppliers of inputs to final customers of products” (TN/S/W/20).

Instead of aiming to modify the GATS classification system, which does not contain a separate category for logistics services, this group of members encouraged trading partners to undertake commercially meaningful liberalization commitments across a checklist of logistics-related sectors. 

The proposed checklist was broad, containing about 20 services sub-sectors  regrouped into three blocks of services: core freight logistics services; related freight logistics services; and non-core freight logistics services.  Core freight logistics services are “Services Auxiliary to All Modes of Transport” in W/120. They consist of cargo handling services, storage and warehousing services, transport agency services and other auxiliary services to transport.

Following the Hong Kong Ministerial Declaration in 2005, a group of members prepared a plurilateral request on logistics services, which was addressed to a number of members.  The request divided logistics services into four clusters:  core logistics services (i.e. auxiliary services to all modes of transport );  freight transport services;  other related logistics services (engineering and integrated engineering services, technical testing and analysis, postal and courier services including express delivery - and distribution services except franchising );  and non-core freight logistics services (computer and related services, packaging and management consulting and related services).

For the four clusters of services, the request called for new and improved commitments on mode 1 (cross-border supply) and mode 2 (individuals moving abroad to consume services) as well as for the right of a foreign company to establish a commercial presence (mode 3) without substantial limitations. It also sought additional commitments regarding the right to offer a combination of services, to have electronic documentation accepted, to have access to core logistics and freight logistics services on reasonable and non-discriminatory terms, and to ensure that procedures and formalities would not be unnecessarily burdensome.