Enhancing ASEAN Logistics Services Conference · ASEAN%AUSTRALIA+NEW+ZEALAND+FREE+TRADE+AREA+(AANZFTA)+ ECONOMIC+COOPERATION+WORK+PROGRAMME(ECWP)+ + The 6 LPI dimensions along the

Enhancing ASEAN Logistics Services Conference Cebu, Philippines, 28-29 April 2014

ASEAN-‐AUSTRALIA NEW ZEALAND FREE TRADE AREA (AANZFTA) ECONOMIC COOPERATION WORK PROGRAMME (ECWP)

Day 1 – Session 2 ASEAN Logistics Performance and Competitiveness


Mr Michael Smith Principal Research Fellow Victoria University, Institute For Supply Chain And Logistics, Melbourne, Australia

CONNECTING TO COMPETE The 2014 Logistics Performance Index


Outline

1.   Why care about logis3cs?

2.   What is the Logis3cs Performance Index?

3.   LPI 2014 Results

4.   Key messages

5.   The LPI’s role in policy formula3on

6.   ASEAN LPI Results


Why logistics matter?

50%

100%

150%

200%

250%

2 2.5 3 3.5 4 4.5 LPI score (2010)

UNESCAP-‐World Bank trade costs vs. LPI score

Average trade costs o

f goo

ds value

Supply chain boKlenecks are the primary cause of fricNon in trade (trade costs). Reducing them by half would raise trade by 15% and producNon by 5% globally.


Logistics costs impact productivity

Firm-‐level logisNcs expenditures as % of sales in 2011-‐2012

7%

7%

5%

5%

13%

9%

7%

4%

0% 5% 10% 15% 20%

Kazakhstan

Estonia

Finland

Germany

Transport cost

Other logis3cs costs

Reliability is o[en more important than freight costs Logis3cs costs increase with decreasing logis3cs performance. Most of this increase comes from lower reliability and the need to increase inventory (“other costs”).

Sources: Shepherd (2014), for Germany: TU Berlin, for Brazil: ILOS, for Finland: Turku School of Economics


What is the Logistics

Performance Index (LPI)?

(Published by the World Bank)


The 6 LPI dimensions along the supply chain framework

Delivery to Dock

Point of Origin Seller’s Factory

Alongside Vessel

ExporNng Country

Delivered to Buyer’s

Warehouse FronNer/ Border

Unloaded on Dock

ImporNng Country

Customs

Infrastructure

Services Quality

Timeliness

Ease of arranging shipments

Tracking and Tracing


What does the LPI measure?

A sample question from the Domestic LPI:

Source: LPI 2013/2014 Survey

The LPI survey is based on assessments of logisNcs professionals (percepNon-‐based)


LPI overall scores: Performance converging around the world


Performance by developing region

0

10

20

30

40

50

60

70

80

90

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

Singapore Malaysia Thailand Vietnam Indonesia Philippines Cambodia

Glob

al Rank (out of 1

60 econo

mies)

LPI Score

LPI score rank


Performance in South Asia

0

20

40

60

80

100

120

140

160

180

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

India Pakistan Maldives Sri Lanka Nepal Bangladesh Bhutan Afghanistan

Rank

LPI Score

Score Rank


Performance in Europe and Central Asia

0

20

40

60

80

100

120

140

160

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

Turkey Kazakhstan Armenia Tajikistan Georgia Azerbaijan Uzbekistan Turkmenistan Kyrgyz Republic

Score Rank


LPI 2014: Top 10 performance by income group

1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0

Germany Netherlands

Belgium United Kingdom

Singapore Sweden Norway

Luxembourg United States

Japan

Top 10 overall

1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0

Vietnam Indonesia

India Philippines

Ukraine Egypt, Arab Rep.

El Salvador Pakistan Nigeria

Guatemala

Top 10 lower middle-‐income

1.0 2.0 3.0 4.0 5.0

Malaysia China Turkey

Hungary South Africa

Thailand Romania Panama Bulgaria Mexico

Top 10 upper middle-‐income

1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0

Malawi Kenya

Rwanda Cambodia

Burkina Faso Liberia

Ethiopia Nepal

Burundi Bangladesh

Top 10 low-‐income


The “services gap”

0

2

4

6

8

10

12

Low income Lower middle income

Upper middle income

% change in LPI component as measured against the highest

performer, 2007-‐2014

Customs Infrastructure Quality of logisNcs and services

Supply chain efficiency depends on the quality of private services moving the goods.

If logisNcs service delivery is poor, even

good physical connecNvity is not

enough.


Key messages from the LPI 2014

Key message for low-‐income countries: Progress in logisNcs performance is driven by improvement in infrastructure and basic border management reforms. Key message for middle-‐income countries: Focus moves from infrastructure and border management to logisNcs services with growing demand for outsourced logisNcs. Key message for high-‐income countries: Demand for “green” logisNcs services is growing in advanced economies. The “low hanging fruit” have largely been reaped. The new generaNon of reforms is complex, involves many stakeholders, and takes Nme.


Looking for environmental logistics solutions

0%

5%

10%

15%

20%

25%

30%

35%

40%

Low income Middle Income High income: nonOECD

High income: OECD

Percen

tage of respo

nden

ts look

ing for ‘green’ sh

ipping

alterna3

ves

2014 2012

The percentage of respondents looking for

environmentally friendly shipping alternaNves is

growing, and is the highest in advanced economies.


Policies matter to logistics performance

•  Ports •  Road/rail corridors •  Airports

Infrastructure

•  Customs & payments •  Simplifica3on & automa3on •  Harmoniza3on & standardiza3on

Procedures and Trade Facilita3on

•  Forwarders, truckers, brokers etc. •  Regula3on of entry • Market structure and compe33on

Services

•  ‘Green Logis3cs’ •  City Logis3cs Sustainable Logis3cs

RegulaNons (customs, services) are increasingly regional, but implementaNon is naNonal.


What is the role of the LPI?

The LPI

•  Is an overall metric of supply chain efficiency.

•  Provides informaNon of where a country stands and a broad indicaNon of problem areas.

•  Is not a diagnosNc tool and needs to be supported by specific tools designed to perform that funcNon.

The LPI has had a significant impact in raising awareness and pushing for comprehensive “connecNvity” and logisNcs policies, e.g. in Kazakhstan, APEC and Indonesia.


Cambodia’s LPI

0

1

2

3

4

5 LPI Score

Customs

Infrastructure

Interna3onal shipments Logis3cs competence

Tracking & tracing

Timeliness

2014 2007


Indonesia’s LPI

0

1

2

3

4

5 LPI Score

Customs

Infrastructure


Tracking & tracing

Timeliness

2007 2014


Lao PDR’s LPI

0

1

2

3

4

5 LPI Score

Customs

Infrastructure


Tracking & tracing

Timeliness

2014 2007


Malaysia’s LPI

0

1

2

3

4

5 LPI Score

Customs

Infrastructure

Interna3onal shipments

Logis3cs competence

Tracking & tracing

Timeliness

2014 2007


Myanmar’s LPI

0

1

2

3

4

5 LPI Score

Customs

Infrastructure


Tracking & tracing

Timeliness

2014 2007


Philippines’ LPI

0

1

2

3

4

5 LPI Score

Customs

Infrastructure


Tracking & tracing

Timeliness

2014 2007


Singapore’s LPI

0

1

2

3

4

5 LPI Score

Customs

Infrastructure


Tracking & tracing

Timeliness

2014 2007


Thailand’s LPI

0

1

2

3

4

5 LPI Score

Customs

Infrastructure


Tracking & tracing

Timeliness

2014 2007


Viet Nam’s LPI

0

1

2

3

4

5 LPI Score

Customs

Infrastructure


Tracking & tracing

Timeliness

2014 2007


LPI data and report at: lpi.worldbank.org

Questions & Discussion Thank you


Enhancing ASEAN Logistics Services Conference Cebu, Philippines, 28-29 April 2014


Group Photo Before Lunch

Documents

Enhancing ASEAN Logistics Services Conference · ASEAN%AUSTRALIA+NEW+ZEALAND+FREE+TRADE+AREA+(AANZFTA)+ ECONOMIC+COOPERATION+WORK+PROGRAMME(ECWP)+ + The 6 LPI dimensions along the