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Connecting to Compete 2018: Trade Logistics in the Global Economy

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Connecting to Compete 2018: Trade Logistics in the Global Economy What is the Logistics Performance Index? Based on a worldwide survey of global freight forwarders and express carriers, the Logistics Performance Index is a benchmarking tool developed by the World Bank that Connecting 2018 measures performance along the logistics supply chain within a country. Allowing for comparisons across 167 countries, the index can help countries identify challenges and opportunities and improve their logistics performance. The World Bank conducts to the survey every two years. Reliable logistics is indispensable to integrate global value chains—and reap the benefit Compete of trade opportunities for growth and poverty reduction. The ability to connect to the global logistics web depends on a country’s infrastructure, service markets, and trade processes. Government and the private sector in many developing countries should improve these areas—or face the large and growing costs of exclusion. Trade Logistics in the This is the sixth edition of Connecting to Compete, a report summarizing the findings from the new dataset for the Logistics Performance Index (LPI) and its component Global Economy indicators. The 2018 LPI also provides expanded data on supply chain performance and constraints in more than 100 countries, including information on time, distance and reliability, and ratings on domestic infrastructure quality, services, and border agencies. The 2018 LPI encapsulates the firsthand knowledge of movers of international trade. This information is relevant for policymakers and the private sector seeking to identify reform priorities for “soft” and “hard” trade and logistics infrastructure. Findings include: • Gaps in logistics performance between the bottom and top performers persist. • Supply chain reliability and service quality are strongly associated with logistics performance. • Infrastructure and trade facilitation initiatives still play an important role in assuring basic connectivity and access to gateways for most developing countries. • The logistics policy agenda continues to broaden, with growing focus on supply chain resilience, cyber security, environmental sustainability, and skills shortages. The Logistics Performance Index and Its Indicators LPI score, 2012–18 (1 is the lowest score; 5 is the highest score) Connecting to Compete 2018 Trade Logistics in the Global Economy The Logistics Performance Index and Its Indicators Jean-François Arvis The World Bank Lauri Ojala Turku School of Economics, University of Turku Christina Wiederer The World Bank Ben Shepherd Developing Trade Consultants Anasuya Raj The World Bank Karlygash Dairabayeva The World Bank Tuomas Kiiski Turku School of Economics, University of Turku © 2018 The International Bank for Reconstruction and Development/The World Bank 1818 H Street NW Washington, DC 20433 Telephone: 202–473–1000 Internet: www.worldbank.org E-mail: [email protected] All rights reserved The findings, interpretations, and conclusions expressed herein are those of the authors and do not necessarily reflect the views of the Executive Directors of the International Bank for Reconstruc- tion and Development/The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundar- ies, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorse- ment or acceptance of such boundaries. Rights and Permissions The material in this publication is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. The International Bank for Reconstruction and Development/The World Bank encourages dissemination of its work and will normally grant permission to reproduce portions of the work promptly. For permission to photocopy or reprint any part of this work, please send a request with complete information to the Copyright Clearance Center Inc., 222 Rosewood Drive, Danvers, MA 01923, USA; telephone: 978–750–8400; fax: 978–750–4470; Internet: www.copyright.com. All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202–522–2422; e-mail: [email protected]. If you have any questions or comments about this report, please contact: Global Trade and Regional Integration Unit The World Bank Group 1818 H Street NW, Mailstop MC3-300, Washington, DC 20433 USA E-mail: [email protected] Web site: www.worldbank.org, www.worldbank.org/trade, or www.lpi.worldbank.org The report was designed, edited, and typeset by Communications Development Incorporated, Washington, DC. Foreword Caroline Freund, Director, Macroeconomics, Trade and Investment Global Practice, The World Bank Group José Luis Irigoyen, Senior Director, Transport and Digital Development Global Practice, The World Bank Group We are happy to present the sixth edition of The exercise may seem a bit repetitive. The Connecting to Compete and the 2018 edition list of best performers does not change very of the Logistics Performance Index (LPI). much over the course of two years. We invite This interdisciplinary World Bank project was the reader to look beyond country rankings and launched just over 10 years ago. The ambition look at the nexus of themes and policies. The lo- was to develop simple comparators of how effi- gistics sector is changing fast, in terms of the ciently supply chains connect firms to markets, nature of demand (for example, e-commerce), or logistics performance. players, use of technology, new risks (cyberse- Since 2007, most of the countries the curity), and policy concerns. Professionals and World Bank Group works with are well aware countries are increasingly concerned with the of the importance of logistics performance for environmental footprint and resilience of sup- growth and integration. The cross- cutting na- ply chains. ture of logistics as a policy area is widely rec- We hope this work will appeal to a broad ognized: logistics is not just about connecting and diverse audience: policy makers, practitio- infrastructure but encompasses regulation of ners, and researchers. We are confident readers services, sustainability, and resilience, or trade will find this report and its data useful. facilitation. We see that this regular publication has had Caroline Freund a significant impact in helping countries frame Director their own policies and motivate consistent ap- Macroeconomics, Trade and Investment proaches to interventions and reforms at the Global Practice national level. In some cases, the World Bank The World Bank Group has been asked to provide support, which we did by bringing expertise and tools that address the José Luis Irigoyen country-specific supply chain constraints more Senior Director deeply than the rough indications from the LPI Transport and Digital Development can. The LPI remains unique in providing a Global Practice common referential across countries. The World Bank Group CONNECTING TO COMPETE 2018 TRADE LOGISTICS IN THE GLOBAL ECONOMY iii Foreword Young Tae Kim, Secretary-General, International Transport Forum at the Organisation for Economic Co-operation and Development Logistics is an elevated priority for many mem- tracing — point to policy actions that can sup- ber countries of the International Transport port the improvement of each individual ele- Forum. Because facilitating trade and trans- ment. International Transport Forum studies port is at the core of stimulating economic have examined the drivers of logistics perfor- development, several countries have developed mance and assessed the development of national comprehensive national logistics strategies. logistics observatories in Chile, Mexico, Turkey, Well- functioning domestic and international and more recently Vietnam. logistics is a precondition of national competi- The LPI is a crucial part of global efforts to tiveness. And fact-based metrics can provide better understand logistics performance in the reliable benchmarks, assess policy impacts, and context of increasingly complex supply chains. compare global advances in logistics. I am sure the 2018 edition of the LPI will be The World Bank Logistics Performance used extensively by governments, international Index (LPI) is a unique benchmarking tool, organizations, private firms, and academia in ef- providing the same measure for more than forts to improve logistics — the backbone of the 160 countries. At the International Transport global economy. Forum, we use the LPI as the most important starting point of dialogue with our member Young Tae Kim countries on the drivers of logistics performance. Secretary-General The six components of the LPI — customs, infra- International Transport Forum at the structure, ease of arranging shipments, quality Organisation for Economic Co-operation of logistics services, timeliness, and tracking and and Development iv CONNECTING TO COMPETE 2018 TRADE LOGISTICS IN THE GLOBAL ECONOMY Acknowledgements This report was prepared by the World Bank’s (www.fiata.com), especially of Marco Sorgetti, Global Trade and Regional Integration Team FIATA’s former Director General, as well as in the Macroeconomics, Trade and Investment Hans Günther Kersten, FIATA’s current Direc- Global Practice, under the guidance of Car- tor General. National freight forwarding asso- los Felipe Jaramillo (Senior Director), Caro- ciations and
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