Thursday 27th Oct 2016 - Logistics Manager

UK moves up to fourth among top logistics performers

The UK has risen from tenth to fourth in the World Bank’s list of top logistics performers as measured by the Logistics Performance Index.

The index ranks 160 countries on a number of dimensions of trade – including customs performance, infrastructure quality, and timeliness of shipments.

Top was Germany, up from fourth in the last report two years ago. It is followed by Netherlands, Belgium and the UK. Singapore, which was top in 2012, has slipped to fifth.

The United States maintained its position of ninth, according to the report, Connecting to Compete 2014: Trade Logistics in the Global Economy.

Among the BRIC countries, China came in at number 28 while India was 54th, Brazil was 65th and Russia was 90th.

The LPI gives scores for each country as a percentage of the highest performer. The UK, for example, produced a score that was 96.6 per cent of top placed Germany.

The USA’s score was 93.5 per cent of the highest performer. France was 91.2 per cent, Italy 86.2 per cent, China 81.1 per cent, and Russia 54.3 per cent.

The World Bank Group’s International Trade Unit has produced the Logistics Performance Index (LPI) about every two years since 2007. “The LPI is trying to capture a rather complex reality: attributes of the supply chain,” said Jean-François Arvis, senior transport economist and the founder of the LPI project.

“In countries with high logistics costs, it is often not the distance between trading partners, but reliability of the supply chain that is the most important contributor to those costs.”

The 2014 report found that high-income countries dominate the world’s top-ten performers.

Among low-income countries, Malawi, Kenya, and Rwanda showed the highest performance. In general, the trend across past reports has been that countries are improving and low-performing countries are improving their overall scores faster than high-performing countries.

The bottom end of the list is dominated by countries in Africa, or where conflict has disrupted normal logistics. Bottom was Somalia, followed by Democratic Republic of Congo, and Afghanistan.

In recent years, as tariffs have dropped globally, logistics and other aspects of trade facilitation have gained profile as an arena for reducing trade costs. A 2013 study by the World Bank Group and World Economic Forum found that reducing the high transactions costs and unnecessary red tape faced by traders could provide a significant boost to global GDP.

In January, the World Trade Organisation (WTO) finalised a “trade facilitation agreement” that sets standards for faster and more efficient customs procedures and contains provisions for technical assistance and training in this area. The World Bank and six other multilateral finance institutions supported the WTO’s efforts in a unified statement in October.