Executive Briefings

World Bank Sees Need for Logistics Improvements, Ranks Germany As Best Performer

According to the latest survey by the World Bank, the capacity of countries to efficiently move goods and connect manufacturers and consumers with international markets is improving around the world, but much more progress is needed to spur faster economic growth and help firms benefit from trade recovery.

The survey found that Germany is the top performer among the 155 economies ranked in the Logistics Performance Indicators (LPI), which are included in the report, Connecting to Compete 2010: Trade Logistics in the Global Economy. The study is based on what is claimed to be the most comprehensive world survey of international freight forwarders and express carriers.(The U.S. was 15th on the list.)

According to the LPI, high-income economies dominate the top logistics rankings, with most of them occupying important places in global and regional supply chains. By contrast, the 10 lowest-performing countries are almost all from the lower-income groups.

"Countries with better logistics performance can grow faster, become more competitive and increase their level of investment," said Bernard Hoekman, World Bank Trade Department director. "Our research shows that increasing logistics performance in low income countries to the middle-income average could boost trade by around 15 per cent and benefit all firms and consumers through lower prices and better quality services."

According to the study, logistics performance is heavily influenced by the quality of public sector institutions and the effective coordination of border clearance processes among all border management agencies. In this area, customs performs better than many other agencies, pointing to the need for border management reforms.

Other areas for improvement include better transport policies; increasing competition in trade-related services such as trucking, freight forwarding and railways; and better trade-related infrastructure. For many low-income countries the most-binding constraints are often in logistics services and international transit systems. Given they perform better on many other indicators, improving trade infrastructure is often reported to be a priority for middle-income countries.

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According to the latest survey by the World Bank, the capacity of countries to efficiently move goods and connect manufacturers and consumers with international markets is improving around the world, but much more progress is needed to spur faster economic growth and help firms benefit from trade recovery.

The survey found that Germany is the top performer among the 155 economies ranked in the Logistics Performance Indicators (LPI), which are included in the report, Connecting to Compete 2010: Trade Logistics in the Global Economy. The study is based on what is claimed to be the most comprehensive world survey of international freight forwarders and express carriers.(The U.S. was 15th on the list.)

According to the LPI, high-income economies dominate the top logistics rankings, with most of them occupying important places in global and regional supply chains. By contrast, the 10 lowest-performing countries are almost all from the lower-income groups.

"Countries with better logistics performance can grow faster, become more competitive and increase their level of investment," said Bernard Hoekman, World Bank Trade Department director. "Our research shows that increasing logistics performance in low income countries to the middle-income average could boost trade by around 15 per cent and benefit all firms and consumers through lower prices and better quality services."

According to the study, logistics performance is heavily influenced by the quality of public sector institutions and the effective coordination of border clearance processes among all border management agencies. In this area, customs performs better than many other agencies, pointing to the need for border management reforms.

Other areas for improvement include better transport policies; increasing competition in trade-related services such as trucking, freight forwarding and railways; and better trade-related infrastructure. For many low-income countries the most-binding constraints are often in logistics services and international transit systems. Given they perform better on many other indicators, improving trade infrastructure is often reported to be a priority for middle-income countries.

Read Full Article