The World Bank has released the Logistic Performance Index (LPI) 2023, which is a measure used to assess the efficiency and effectiveness of a country’s logistics performance. The index evaluates various dimensions of logistics performance, including infrastructure, customs and border management, ease of arranging shipments, quality of logistics services, tracking and tracing of consignments, and timeliness of deliveries.

The last edition of the LPI was released five years ago in 2018. The efficiency of logistics has remained constant or improved, but the gap between the top and lowest performers has continued even with severe disruptions for the last three years. Despite the more difficult operational environment since the pandemic, the score profile of the countries covered by the LPI has mostly remained steady.

The top 12 performers on the 2023 LPI are high-income nations. Singapore, with a score of 4.3, is in first place, a position it also held in 2007 and 2012. Eight of the top 12 scorers—Finland (4.2), Denmark, the Netherlands, Switzerland (4.1), Austria, Belgium, Germany, and Sweden (4.0)—are from Europe. Canada, the United Arab Emirates, and Hong Kong SAR, China, are also present. For many years, the majority of these economies have dominated global supply chain networks.

The bottom 10 performers are spread across various continents and are primarily lower-middle-income nations. They either have fragile economies that are impacted by armed conflict, natural disasters, or political turmoil, or they are landlocked nations that face difficulties connecting to international supply chains due to geography or economies of scale. Even though the average scores of low performers have gone up, several nations’ rankings have remained the same. Those that experience severe logistics limitations are often those who perform poorly in terms of logistics.

Strong performance across all six LPI components is the primary driver of a strong overall logistics performance index. The sub-indicator of timeliness surpasses the other components except for a few of the top-performing countries, whereas the component measuring the performance of customs and border agencies underperforms all the other sub-indicators. However, there is a noticeable decline in timeliness scores in absolute terms as a result of supply chain disruptions, which were most visibly felt in shipment delays.

The report released by the World Bank emphasizes the critical role that reliability and resilience play in the effectiveness of logistics. International trade is a significant driver of economic growth, and logistics is the backbone of trade. Therefore, this index is crucial for countries to identify their areas of improvement. The survey points out that shipping takes up most of the time and that seaports, airports, and multimodal facilities are the sites of the worst delays. Policies aimed at these facilities, such as streamlining clearance procedures, investing in infrastructure, implementing digital technologies, and encouraging environmentally friendly logistics by switching to less carbon-intensive freight modes and more energy-efficient warehousing, can all help increase reliability.

Author: Dhairya Bahl

Source: Ti

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