LOGISTICS PERFORMANCE INDEX CONNECTING TO COMPETE 2012 Jean-Franois - PowerPoint PPT Presentation

WORLD BANK GROUP LOGISTICS PERFORMANCE INDEX CONNECTING TO COMPETE 2012 Jean-François ARVIS INTERNATIONAL TRADE DEPARTMENT ISEL November 14 2012 Douane

How does the World Bank help? Advise governments on reforms Border Improvement in border management in a broad sense: management integration of customs, product standards, tax, rules of origin, etc. Improvement in the management of key trade related infrastructure, Trade especially gateways and multimodal facilities Infrastructure Logistics Improvement of the quality/professionalism of private logistics services, services through technical/economic regulation and capacity building Regional Regional trade facilitation including transit systems Performance monitoring and indicators: e.g., data on time, cost, Indicators and reliability along corridors Development and implementation of comprehensive action plan Action plan addressing all of the above

Where does the World Bank come in? Logistics providers increase level of services as they will operate in better, faster and more reliable environments Countries Beco ecome e Governments mor ore Advice o ce on competitive refo forms World Bank Indicator ors essential f for refo forms FIATA Carry private sector voice to governments! 3

The Logistics Performance Index www.worldbank.org/lpi 4

The Logistics Performance Index • Measures the trade logistics efficiency of a country • Fundamental premise: Efficient logistics drives economic performance and competitiveness 5

The Logistics Performance Index • First report 2007, every 2 years • Source of data: online survey of logistics service firms (freight forwarders, express carriers) • Rate logistics performance for up to 8 markets on a 1-5 scale • LPI a weighted average of scores (using principal component analysis) • Domestic LPI data reported by firms for own country 6

The Logistics Performance Index Partnership with the private sector Built on more than 6,000 country assessments by over 1000 logistics professionals worldwide Primary data gathered for 155 countries (143 for domestic LPI indicators) 69% of respondents based in developing countries; 82% have less than 250 employees

LPI Questionnaire Structure Domestic LPI I nternational LPI Evaluate 8 overseas markets Evaluate Country of work Domestic Domestic International General Quantitative Qualitative Qualitative module Performance Performance Performance Country 1 Country 2 Country 3 Country 4 Country 5 Country A Country 6 Country 7 Country 8

LPI Questionnaire Structure I nternational LPI Six dimensions of country performance: Evaluate 8 overseas markets Efficiency of the clearance process Quality of trade and transport infrastructure Ease of arranging competitively priced shipments Logistics competence and quality of logistics services International General Ability to track and trace consignments Qualitative module Timeliness of shipment delivery Performance Country 1 Country 2 Country 3 Country 4 Country 5 Country A Country 6 Country 7 Country 8

LPI Results 10

Good News: All countries performing better 100 90 80 With the right 70 investment and 60 Percent policies, lower 2007 50 income countries 2010 40 can also be high 2012 30 performers 20 10 0 Bottom Fourth Third Second Top quintile quintile quintile quintile quintile LPI score as percentage of highest LPI score by LPI quintile, 2007, 2010, and 2012 11

Percentage change in LPI scores over 2007–2012, by LPI component and income group Customs Infrastructure Quality of logistics services 12 10 Percentage change 8 6 4 2 0 Low income Lower middle Upper middle High income High income income income non-OECD OECD

LPI 2012 Logistics friendly Consistent performers Partial performers Logistics unfriendly Countries are improving around the world

More than income: the “logistics gap” 100% 90% 20% of LICs are in the 3 rd quintile 80% 70% 15% of LMICs are in 60% the 2 nd Top quintile Percent 50% Second quintile 10% of UMICs are in Third quintile 40% Fourth quintile the 1st tier, but Bottom quintile 30% another 10% are in the bottom tier 20% 10% 0% Low Lower Upper High High income middle middle income income income income non-OECD OECD 14

LPI Ranks TOP 10 COUNTRIES TOP 10 COUNTRIES TOP 10 COUNTRIES UPPER MIDDLE INCOME LOWER MIDDLE INCOME LOW INCOME Country LPI Rank Country LPI Rank Country LPI Rank South Africa 23 Benin 67 India 46 China 26 Malawi 73 Morocco 50 Turkey 27 Madagascar 84 Philippines 52 Malaysia 29 Niger 87 Vietnam 53 Bulgaria 36 Tanzania 88 Egypt, Arab Rep. 57 Thailand 38 Guinea-Bissau 94 Indonesia 59 Chile 39 Togo 97 Yemen, Rep. 63 Tunisia 41 Central African Republic 98 Ukraine 66 Brazil 45 Cambodia 101 Pakistan 71 Mexico 47 Zimbabwe 103 Guatemala 74

Improvements can be obtained with the right investment and engagement 90 % of Highest Performer 2012 % of Highest Performer 2010 80 % of Highest Performer 2007 70 60 50 40 30 20 10 0 Turkey Bulgaria Tunisia Morocco Vietnam Egypt Indonesia Pakistan Malawi Tanzania

LPI Questionnaire Structure Domestic LPI Evaluate Country of work Domestic Domestic Quantitative Qualitative Performance Performance Country A

Domestic logistics environement Environment, Processes, Institutions, Time and Cost Logistics environment, Core logistics processes, Institutions and Performance time and cost data: Quality data for infrastructure, Service providers and processes Customs administration, Border procedures and time Time/cost data for import and export transactions Domestic LPI

Customs ahead of other border agencies 70% Customs Other border agencies 60% 50% Percentage of respondents indicating the quality and competence of customs and 40% other border agencies is high or very high 30% 20% 10% 0% Logistics friendly Consistent Partial performers Logistics unfriendly performers 19

Median import lead time and average clearance time (days), by LPI quintile 12 4 3,5 10 3 8 2,5 6 2 1,5 4 1 2 0,5 0 0 Bottom quintile Fourth quintile (low Third quintile Second quintile Top quintile (highest (lowest performance) (average (high performance) performance) performance) performance) Lead time (port/airport) - import Lead time (land) - import Clearance time without physical inspection Clearance time with physical inspection

Doing Business  Important initiative by the IFC (10 years)  Measure “red tape” is several areas: starting a business, payments… one section “trading across border”  Three dimensions for each areas “number of days, cost, and number of documents”  Tries to focus on information that is objective and not too variable (ideally single respondent)

LPI and DB – separate but complementary LPI DB In-country entities with 3 rd country providers of Source of data knowledge of business logistics services regulations Analytic breakdown in Concept Performance outcomes component procedures Frequency Every 2 years, since 2007 Yearly, since 2003 Several indices of Metric of broader business Significance performance regulatory environment Questionnaire Short online Detailed Countries 155 183 Both indices provide basic input for policy makers. 22 Neither are in-depth analysis.

Red tape affecting import and export transactions, by LPI quintile 5 4,5 4 3,5 3 2,5 2 1,5 1 0,5 0 Bottom quintile Fourth quintile (low Third quintile Second quintile (high Top quintile (highest (lowest performance) performance) (average performance) performance) performance) No. of import agencies No. of export agencies No. of import documents No. of export documents

The Logistics Performance Index www.worldbank.org/lpi  MERCI 24