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 methodology 2. LPI 2018 results: International section 3. LPI 2018 results: Domestic section 4. LPI 2018 key messages and policy recommendations 1

1. Introduction and LPI methodology

How the LPI is constructed • The LPI measures performance along the logistics supply chain within a country and offers two different perspectives: international and domestic. • Based on a worldwide survey of freight forwarders and express carriers, providing feedback on the logistics “friendliness” of the countries in which they operate and those with which they trade. International LPI Domestic LPI • • Provides qualitative evaluations of a country in six Provides qualitative and quantitative evaluations areas by its trading partners (i.e. professionals of a country by logistics professionals working working outside the country) inside it. • • Areas of evaluation: Includes detailed information on the logistics 1. Customs and border management environment, core logistics processes, 2. Infrastructure institutions, and performance time & cost data 3. Logistics competence and quality 4. International shipments 5. Tracking & tracing 6. Timeliness of shipments The LPI ranking is solely based on the International LPI. 3

LPI Methodology Built on > 5,000 country assessments by around 1,000 • freight forwarders & express carriers worldwide Respondents rate logistics performance of own country and 8 • other countries on a scale from 1 to 5 Coverage: 160 countries • Published every 2 years • How do respondents get to participate? • Respondents are invited to answer an electronic survey • Outreach via partners such as FIATA, national • associations of freight forwarders, & large logistics firms Direct contacts via a mailing list of logistics operators • Respondent base includes multinationals, large local • firms and SMEs No sampling involved • 4

Input and outcome indicators in the LPI 5

What do we measure? Here is a sample question from the LPI survey: Source: 2017/2018 LPI Survey The LPI is mostly perception-based. 6

LPI 2018 respondent base by region and income group Low income, 28 Middle East & South Asia, 38 North Africa, Lower middle 39 Sub-Saharan income, 154 Africa, 58 High income: High income, OECD, 289 333 East Asia & Pacific, 75 Europe & Central Asia, High income: 134 non-OECD, 44 Upper middle Latin America income, 354 & Caribbean, 192 7

2. LPI 2018 results: International section

LPI 2018 results: Top 10 by country groups TOP 10 UPPER MIDDLE INCOME TOP 10 OVERALL China 3.61 Germany 4.20 Thailand 3.41 Sweden 4.05 South Africa 3.38 Belgium 4.04 Panama 3.28 Austria 4.03 Malaysia 3.22 Japan 4.03 Turkey 3.15 Netherlands 4.02 Romania 3.12 Singapore 4.00 Croatia 3.10 Denmark 3.99 Mexico 3.05 United Kingdom 3.99 Bulgaria 3.03 Finland 3.97 2.00 2.50 3.00 3.50 4.00 4.50 2.00 2.50 3.00 3.50 4.00 4.50 TOP 10 LOW INCOME TOP 10 LOWER MIDDLE INCOME Rwanda 2.97 Vietnam 3.27 Benin 2.75 India 3.18 Burkina Faso 2.62 Indonesia 3.15 Mali 2.59 C te d'Ivoire 3.08 Malawi 2.59 Philippines 2.90 Uganda 2.58 Ukraine 2.83 Comoros 2.56 Egypt, Arab Rep. 2.82 Nepal 2.51 Kenya 2.81 Togo Lao PDR 2.70 2.45 Jordan Congo, Dem. Rep. 2.43 2.69 2.00 2.50 3.00 3.50 4.00 4.50 2.00 2.50 3.00 3.50 4.00 4.50 Axis = LPI 2018 overall score (1 = min; 5 = max) 9

LPI 2018 overperformers and underperformers 5 4.5 4 LPI score (min=1, max=5) China Thailand 3.5 Vietnam South Africa India Côte d'Ivoire Indonesia 3 Rwanda Benin Malawi 2.5 Guyana Turkmenistan Fiji Papua New Guinea Equatorial Guinea Cuba Iraq Bhutan Gabon 2 Angola 1.5 250 25,000 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 10

LPI 2018 score by world region, 2018 vs. 2016 4 LPI score (min = 1, max = 5) 3.5 3.24 3.23 3.15 3.14 3 2.89 2.78 2.66 2.66 2.62 2.51 2.47 2.45 2.5 2 Note: Chart excludes high- income economies 11

LPI components scores, by LPI quintile 4.5 LPI score (best = 5, worst = 1) 4 3.5 3 2.5 2 1.5 1 Bottom quintile Fourth quintile Third quintile Second quintile Top quintile 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. 12

Demand for Sustainable or ‘Green’ Logistics How often do shippers ask for environmentally friendly options? Top quintile 28% 27% 45% Second quintile 14% 24% 62% Third quintile 9% 27% 64% Fourth quintile 7% 21% 72% Bottom quintile 5% 21% 75% Often or nearly always Sometimes Hardly ever or rarely The demand for environmentally friendly solution is strongly and positively associated with logistics performance. 13

3. LPI 2018 results: Domestic section

Quality of infrastructure Respondents rating the quality of trade and transport infrastructure as “improved” or “much improved” since 2016, by LPI quintile 70% 65% 60% 57% 53% Percent of respondents 50% 50% 40% 36% 30% 20% 10% 0% Bottom (lowest Fourth (low Third (average Second (high Top (highest performance) performance) performance) performance) performance) LPI Quintile 15

Quality of service Respondents rating the quality and competence of each service provider type as “high” or “very high,” by LPI quintile LPI quintile Road Rail Air Maritime Warehous Freight Customs Trade and Consigne transport transport transport transport ing, forwarder brokers transport es or and ports transloadi s associatio shippers ng, and ns distributio n 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% A strong advantage in services among the top performers. 16

Difference between respondents rating services “high” or “very high” and those rating infrastructure “high” or “very high,” by WB region Warehousing, Maritime transport and Air Road Rail transloading, and World Bank Region ports transport transport transport 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% -9% 8% 3% -7% South Asia 6% 10% 1% -8% 4% Sub-Saharan Africa 5% 12% 16% 14% 16% 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. 17

Red tape affecting import and export transactions, by LPI quintile 6 5 4 Number 3 Border process 2 efficiency still affects lowest 1 performers: The Bottom (lowest Fourth (low Third (average Second (high Top (highest lowest performance) performance) performance) performance) performance) LPI Quintile performers tend to experience No. of import agencies No. of export agencies more red tape. No. of import documents No. of export documents 18

New question in 2018 LPI: Supply chain resilience and cyber threats in logistics Cybersecurity threats in logistics Our firm's preparedness for cyber have... threats has... 100% 100% 90% 90% 80% 80% 70% 70% 60% 60% 50% 50% 40% 40% 30% 30% 20% 20% 10% 10% 0% 0% Low Lower Upper High Low income Lower Upper High income income middle middle income middle middle income income income income (Much) decreased About the same (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. 19

4. LPI 2018 key messages and policy recommendations