A World Bank- (WB-) conducted survey has come out with the world's first Logistics Performance Index (LPI). It has placed India on 39th place amongst 150 countries of the world, nine notches behind its closest economic rival, China.
The LPI, which was released as apart of the WB Group last week, is based on a worldwide survey completed by more than 800 logistics professionals.
It aggregates the performance in seven areas from traditional ones like customs procedures, logistics costs (including freight rates), and infrastructure quality to new areas like the ability to track and trace shipments, timeliness in reaching a destination, and the competence of the domestic logistics industry.
The survey had the support and participation of the International Association of Freight Forwarders, the Global Express Association, the Global Facilitation Partnership, and the Turku School of Economics.
The survey shows while India trails behind China on important indices like customs procedures, overall infrastructure quality, international shipment, logistics competence and tracking of shipments, it is ahead in domestic logistics cost.
The survey was based on the simple fact that trade logistics, or the capacity to connect to international markets to ship goods, is critical for developing countries to improve their competitiveness, reap the benefits of globalisation, and fight poverty more effectively in an increasingly integrated world.
According to the LPI, Singapore, a major global transport and logistics hub, ranks first. At the other extreme are low-income countries, particularly those landlocked in Africa and Central Asia.
All developed countries turned out to be the top performers. Among the seven most industrialised nations, Germany ranks 3rd, Japan 6th, the UK 9th, Canada 10th, the US 14th, France 18th, and Italy 22nd, of a total of 150 countries covered.
There are also significant differences among developing countries with similar incomes. China and Chile, for instance, rank 30th and 32nd respectively, while countries in higher income groups, like oil producers, tend to perform below their potential.
The LPI was based on a survey of operators on the ground worldwide (global freight forwarders and express carriers), providing feedback on the logistics "friendliness" of the countries in which they operate and those with which they trade.
They combined in-depth knowledge of the countries in which they operate with informed perceptions of other countries, with which they trade, and the experience of global logistics environment.
The LPI is an interactive benchmarking tool created to help countries identify the challenges and opportunities they face in their performance on trade logistics and what they can do to improve their performance.
