CONNECTING TO COMPETE THE 2018 LOGISTICS PERFORMANCE INDEX (LPI) - - PowerPoint PPT Presentation
CONNECTING TO COMPETE THE 2018 LOGISTICS PERFORMANCE INDEX (LPI) UNCC, Bangkok, Thailand Macroeconomics, Trade and Investment Global Practice 8 August 2018 Global Trade and Regional Integration Team Contents 1. Introduction and LPI
Macroeconomics, Trade and Investment Global Practice Global Trade and Regional Integration Team
UNCC, Bangkok, Thailand 8 August 2018
1. Introduction and LPI methodology 2. LPI 2018 results: International section 3. LPI 2018 results: Domestic section 4. LPI 2018 key messages and policy recommendations
1
International LPI Domestic LPI
areas by its trading partners (i.e. professionals working outside the country)
inside it.
environment, core logistics processes, institutions, and performance time & cost data
3
The LPI ranking is solely based on the International LPI.
perspectives: international and domestic.
“friendliness” of the countries in which they operate and those with which they trade.
4
freight forwarders & express carriers worldwide
associations of freight forwarders, & large logistics firms
firms and SMEs
5
Here is a sample question from the LPI survey:
6
Source: 2017/2018 LPI Survey
The LPI is mostly perception-based.
7
High income: OECD, 289 High income: non-OECD, 44 Upper middle income, 354 Lower middle income, 154 Low income, 28 South Asia, 38 Middle East & North Africa, 39 Sub-Saharan Africa, 58 East Asia & Pacific, 75 Europe & Central Asia, 134 Latin America & Caribbean, 192 High income, 333
9
Axis = LPI 2018 overall score (1 = min; 5 = max)
3.97 3.99 3.99 4.00 4.02 4.03 4.03 4.04 4.05 4.20 2.00 2.50 3.00 3.50 4.00 4.50 Finland United Kingdom Denmark Singapore Netherlands Japan Austria Belgium Sweden Germany
TOP 10 OVERALL
3.03 3.05 3.10 3.12 3.15 3.22 3.28 3.38 3.41 3.61 2.00 2.50 3.00 3.50 4.00 4.50 Bulgaria Mexico Croatia Romania Turkey Malaysia Panama South Africa Thailand China
TOP 10 UPPER MIDDLE INCOME
2.69 2.70 2.81 2.82 2.83 2.90 3.08 3.15 3.18 3.27 2.00 2.50 3.00 3.50 4.00 4.50 Jordan Lao PDR Kenya Egypt, Arab Rep. Ukraine Philippines C te d'Ivoire Indonesia India Vietnam
TOP 10 LOWER MIDDLE INCOME
2.43 2.45 2.51 2.56 2.58 2.59 2.59 2.62 2.75 2.97 2.00 2.50 3.00 3.50 4.00 4.50 Congo, Dem. Rep. Togo Nepal Comoros Uganda Malawi Mali Burkina Faso Benin Rwanda
TOP 10 LOW INCOME
10
Malawi Rwanda Benin Côte d'Ivoire India Vietnam Bhutan Papua New Guinea Indonesia Angola Guyana Fiji Iraq South Africa Thailand Turkmenistan Gabon Cuba China Equatorial Guinea 1.5 2 2.5 3 3.5 4 4.5 5 250 25,000 LPI score (min=1, max=5) GDP per capita in current US$, 2015 Note: Fitted values are based on an ordinary least squares regression using data for all countries. Underperformers (triangles) are the non–high- income countries with the 10 smallest residuals. Overperformers (squares) are the non–high-income countries with the 10 largest residuals. Source: Logistics Performance Index 2018
11
Note: Chart excludes high- income economies
3.24 3.23 3.15 3.14 2.78 2.89 2.66 2.66 2.51 2.62 2.45 2.47 2 2.5 3 3.5 4 LPI score (min = 1, max = 5)
12
1 1.5 2 2.5 3 3.5 4 4.5 Bottom quintile Fourth quintile Third quintile Second quintile Top quintile
LPI score (best = 5, worst = 1)
Customs Infrastructure International shipments Quality of logistics services Tracking and tracing Timeliness
There are significant differences in LPI performance across LPI components and quintiles: The timeliness component outperforms the other LPI components and is viewed as the least problematic. The performance of customs and border agencies, as well as the quality of trade and transport infrastructure, are particularly low in the worst-performing countries, which also have relatively low quality of logistics services.
13
The demand for environmentally friendly solution is strongly and positively associated with logistics performance.
How often do shippers ask for environmentally friendly options?
5% 7% 9% 14% 28% 21% 21% 27% 24% 27% 75% 72% 64% 62% 45% Bottom quintile Fourth quintile Third quintile Second quintile Top quintile
Often or nearly always Sometimes Hardly ever or rarely
Respondents rating the quality of trade and transport infrastructure as “improved” or “much improved” since 2016, by LPI quintile
15
57% 36% 50% 65% 53%
0% 10% 20% 30% 40% 50% 60% 70% Bottom (lowest performance) Fourth (low performance) Third (average performance) Second (high performance) Top (highest performance)
Percent of respondents LPI Quintile
16
Respondents rating the quality and competence of each service provider type as “high” or “very high,” by LPI quintile
A strong advantage in services among the top performers.
LPI quintile Road transport Rail transport Air transport Maritime transport and ports Warehous ing, transloadi ng, and distributio n Freight forwarder s Customs brokers Trade and transport associatio ns Consigne es or shippers Bottom (lowest performance) 28% 19% 37% 44% 33% 32% 14% 24% 22% Fourth (low performance) 30% 9% 39% 46% 21% 38% 26% 19% 26% Third (average performance) 36% 24% 58% 40% 39% 45% 45% 32% 22% Second (high performance) 38% 26% 49% 53% 49% 59% 36% 42% 38% Top (highest) 78% 41% 70% 71% 69% 78% 68% 56% 52%
World Bank Region Maritime transport and ports Air transport Road transport Rail transport Warehousing, transloading, and distribution East Asia & Pacific 9% 9% 3% 0% 4% Europe & Central Asia 9% 18% 16% 2% 6% Latin America & Caribbean 21% 18% 12% 5% 11% Middle East & North Africa 0%
8% 3%
South Asia 6% 10% 1%
4% Sub-Saharan Africa 5% 12% 16% 14% 16%
17
A ratings gap between services and infrastructure appears across World Bank regions. It is particularly stark for air transport in Europe and Central Asia and Latin America and the Caribbean (LAC), for road transport in LAC and Sub-Saharan Africa (SSA), and for warehousing in SSA. These data suggest a need to develop transport-related infrastructure, so that service markets reforms can bring maximum benefits to users.
18
Border process efficiency still affects lowest performers: The lowest performers tend to experience more red tape.
1 2 3 4 5 6 Bottom (lowest performance) Fourth (low performance) Third (average performance) Second (high performance) Top (highest performance) Number LPI Quintile
19 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Low income Lower middle income Upper middle income High income
Cybersecurity threats in logistics have...
(Much) decreased About the same 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Low income Lower middle income Upper middle income High income
Our firm's preparedness for cyber threats has...
(Much) decreased About the same (Much) increased
The perceived magnitude of cyber threats (left figure) and preparedness to mitigate their effects (right figure) go hand in hand. Developing countries lag far behind high-income countries in both.
for most developing countries.
security, environmental sustainability, and skills shortages.
21
Logistics performance is not primarily about speed or costs, but about the reliability of supply chains and service delivery, which depends on many factors: infrastructure, competition, skills, etc.
1. Logistics skills shortages 2. Restructuring global value chains 3. Supply chain risk and recovery (resilience) 4. Digital transformation of supply chains 5. Sustainability of supply chains 6. E-commerce driving demand chains 7. Logistics property and infrastructure 8. Collaborative business models
Source: World Economic Forum 2017: Supply Chain and Transport Briefing. Geneva: World Economic Forum.
22
Most of these trends are directly relevant to the logistics policy agenda.
=> Still relevant for most developing countries, but focus in higher performing countries has shifted to domestic logistics Policies to target :
trucking, brokerage, terminal or warehousing operations.
23
Most reforms in the logistics sector involve more than one agency and many stakeholders, slowing implementation, or even reversing it → Need for seamless interagency coordination and strong public- private dialogue, e.g. via national logistics bodies.
Lowest performer (fifth quintile) Fourth quintile Third quintile Second quintile Best performer (first quintile) Transportation infrastructure Trade and transport facilitation Service markets and regulations Skills Green logistics Urban logistics Spatial planning Resilience Dedicated logistics body Specific legal framework National data system
24
Very important Important Less important
agenda as those services cannot be created purely domestically.
traders (= shippers) will outsource their logistics.
will handle logistics in-house.
logistics skills.
25
Logistics reform in low performing countries should focus on improving logistics services reliability, increasing clearance predictability and avoiding inland transit delays.
before hard infrastructure projects were completed.
country size, congested hubs, and internal barriers to trading goods and services (GST reform)
coordination mechanism)
26
27
The LPI is a well-established benchmark, but it does not do everything. The LPI:
perform that function.
connectivity and logistics, especially in geographically large countries.
28
All data available at lpi.worldbank.org
For questions: Christina Wiederer, Economist, GMTRI cwiederer@worldbank.org