the logistics performance index 2016

A MACRO PERSPECTIVE ON LOGISTICS

DEVELOPMENT:

THE LOGISTICS PERFORMANCE INDEX 2016

Lauri Ojala, Turku School of Economics

Transporteffektivitetsdagen, Göteborg, August 25, 2016

The LPI 2016 report ”Connecting to Compete” is a World Bank Global

Trade Team publication and prepared by a team comprising:

Jean-François Arvis, Daniel Saslavsky, Lauri Ojala, Ben Shepherd,

Christina Busch, Anasuya Raj and Tapio Naula

Outline

1. What is the Logistics Performance Index?

2. LPI 2016 Results

3. Key messages

Outline

1 Ojala - Transporteffektivitetsdagen, Göteborg, August 25, 2016

1. What is the Logistics Performance

Index (LPI)?

Ojala - Transporteffektivitetsdagen, Göteborg, August 25, 2016

LPI Methodology

3

• Built on > 5,000 country assessments

by over 1,000 freight forwarders &

express carriers worldwide

• Survey done in cooperation with

partners (see left)

• Respondents rate logistics performance

of own country and 8 other countries on

a scale of 1 to 5

• Coverage: 160+ countries

• Published every 2 years

• 2007, 2010, 2012, 2014, 2016

Partnerships


Input and outcome indicators in the LPI


2. LPI 2016 RESULTS


The performance gap is increasing again

7

Logistics

performance

converges at

the top, but

the gap is

spreading

between the

lowest and

highest

performers

LPI score as percentage of highest LPI score by LPI quintile;

2007, 2010, 2012, 2014 and 2016

30%

40%

50%

60%

70%

80%

90%

Topquintile

Secondquintile

Thirdquintile

Fourthquintile

Fifthquintile

LPI 2016 LPI 2014 LPI 2012

LPI2010 LPI2007


LPI 2014: Top 10 performers by income group

8

Selected LPI 2016 Results

2,50 3,00 3,50 4,00 4,50

United States

Hong Kong…

United Kingdom

Austria

Belgium

Singapore

Netherlands

Sweden

Luxembourg

Germany

TOP 10 OVERALL

2,50 3,00 3,50 4,00 4,50

Burundi

Niger

Comoros

Togo

Mozambique

Burkina Faso

Cambodia

Rwanda

Tanzania

Uganda

TOP 10 LOW INCOME

2,50 3,00 3,50 4,00 4,50

Romania

Botswana

Brazil

Mexico

Thailand

Panama

Turkey

Malaysia

China

South Africa

TOP 10 UPPER MIDDLE INCOME

2,50 3,00 3,50 4,00 4,50

Guyana

El Salvador

Ukraine

Philippines

Pakistan

Vietnam

Indonesia

Egypt, Arab…

Kenya

India

TOP 10 LOWER MIDDLE INCOME


Quality of service

Respondents rating the quality of trade and transport infrastructure as

“improved” or “much improved” since 2014, by LPI quintile

9

0%

10%

20%

30%

40%

50%

60%

70%

Bottom (lowestperformance)

Fourth (lowperformance)

Third (averageperformance)

Second (highperformance)

Top (highestperformance)

Pe

rce

nt

of

res

po

nd

en

ts

LPI Quintile

Transport infrastructure is a constraint especially for

countries ranking towards the bottom


Lowest performers still much affected by

efficiency of border processes

10

Lowest performers

tend to experience

much longer lead

time to import and

more red tape.

In trade

facilitation,

customs agencies

are rated more

highly than other

control agencies

1

2

3

4

5

Bottom(lowest

performance)

Fourth (lowperformance)

Third (averageperformance)

Second (highperformance)

Top (highestperformance)

Nu

mb

er LPI Quintile

No. of import agencies No. of export agenciesNo. of import documents No. of export documents

0

2

4

6

8

10

12

14

High income Upper middleincome

Lower middleincome

Low income

Days

World Bank Income Group

Lead time (port/airport) - export Lead time (land) - export


Sweden in LPI 2016 vs. highest ranked

Germany and High income OECD average


3. Key messages


The big picture

• The gap between countries persists and even widens for the lowest

performing countries.

• Logistics performance is not primarily about costs or red tape but

about reliability of supply chain and service delivery

• A cross-cutting policy agenda, much beyond cross-border

infrastructure and trade facilitation, gets increasingly complex with

concerns such as sustainability, services and competences.

• For lowest performing countries, ”traditional” trade and

transportation facilitation remains at the core of logistics

performance.

• Middle income and high income countries are increasingly concerned

with domestic connectivity and supply chains


“Green” Logistics is on shippers agenda

14

The demand for environmentally friendly solution

is strongly associated with logistics performance.

0 20 40 60 80

Bottom Quintile

Second Quintile

Third Quintile

Fourth Quintile

Top Quintile

Often/Always Sometimes

How often do shippers ask for environmentally friendly options?


Skills: Shortage of qualified personnel is a universal

feature, and very acute with lowest performers

15

0% 10% 20% 30% 40% 50% 60%

Operative/ blue collar staff, e.g.truck drivers, pickers

Administrative logistics staff,e.g. traffic planners, expediters

Logistics supervisors, e.g. shiftleaders, traffic controllers

Logistics managers, e.g.responsible for supply chain

management

Respondents indicating "low" or "very low" availability of qualified personnel in the respective employee groups, by

LPI Quintile

1st LPI Quintile (lowestperforming)

2nd LPI Quintile

3rd LPI Quintile

4th LPI Quintile

5th Quintile (highestperforming)


5. The LPI’s role in the policy dialogue &

WB engagement in logistics


What is the role of the LPI?

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The LPI is a well-established benchmark, but does not do everything. The LPI:

• Is a synthetic metric of supply chain efficiency.

• Provides information of where a country stands and gives a crude

indication of problem areas.

• Is not, on its own, a diagnostic tool and needs to be supported by specific

tools designed to perform that function.

• Targets international supply chain, and may not fully reflect the quality of

internal connectivity and logistics.

The LPI has had a significant impact in raising awareness and establishing

logistics as a cross-cutting policy concern.

It has contributed to motivating several national and regional initiatives in

several OECD countries and many emerging and middle income countries.


Thank you


Documents

the logistics performance index 2016