About Logistics
Performance Index (LPI)
The World Bank’s 2014 publication of the
Logistics Performance Index and its Indicators
provides details on various aspects of the
logistics position and performance of for 160
countries.
The LPI measures the on-the-ground
efficiency of trade supply chains or logistics
performance.
Supply chains are the backbone of the
international trade and commerce. They include
freight transportation, warehousing, border
clearance, payment systems, and increasingly
many other functions outsourced by producers
and merchants to dedicated service providers.
The importance of good logistics performance
for economic growth diversification, and
poverty reduction is now firmly established.
Although logistics is performed mainly by private
operators, it has become a public policy concern
of national Governments and regional and
international organisations. Supply chains are
a complex sequence of co-ordinated activities.
The performance of the whole depends on
Government intervention such as infrastructure,
logistics services provision, and cross-border
trade facilitation.
Improving logistics performance is at the core
of the economic growth and competitiveness
agenda. Policymakers globally recognise the
logistics sector as one of their key pillars for
develo pment. Trade powerhouses in Europe
like the Netherlands or in developing countries
like Vietnam and Indonesia see seamless and
sustainable logistics as an engine of growth and
of integration with global value chains.
Indeed, inefficient logistics raises the
costs of trading and reduces the potential for
global integration. This is a hefty burden for
developing countries trying to compete in the
global marketplace. Since 2007, the Logistics
Performance Index (LPI) has debated on the role
of logistics for growth, and the policies to support
it, in such areas as infrastructure, service
provision, and cross-border trade facilitation.
Some important issues mentioned in the
report are:
- If service delivery is poor, good physical
connectivity is not enough,
- Trade facilitation and border management
reforms matter, and
- Increased complexity, no more low-hanging
fruit.
The LPI analyses countries in six components:1. efficiency of customs and border
clearance,
2. quali t y of tr ade and tr ansp or t
infrastructure,
3. ease of arranging competitively priced
shipments,
4. competence and quality of logistics
services – trucking, forwarding and
custom brokerage
5. ability to track and trace consignments,
and
6. frequency with which shipments reach
consignees within scheduled or expected
delivery times (timelessness)
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