The Logistics Performance Index (LPI)[1] is an interactive benchmarking tool created by the World Bank 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.[2] It is the combination of the weighted average of the country scores on six key dimensions: customs performance, infrastructure quality, ease of arranging shipments, logistics services quality, consignments tracking and tracing and timeliness of shipments as well as practical data measuring logistics efficiency. This measure indicates the relative ease and efficiency with which products can be moved into and inside a country.[3] Singapore and Finland are the most efficient and highest ranked LPI countries as per the 2023 LPI.[4]
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The Logistics Performance Index was reported by the World Bank every two years from 2010 to 2018 with a break in 2020 due to the COVID-19 pandemic and a restructuring of the index methodology, eventually coming out only in 2023. The LPI is based on a worldwide survey of stakeholders on the ground providing feedback on the logistics "friendliness" of the countries in which they operate and those with which they trade. Since 2023 the LPI incorporates certain KPI and Big Data to complement the results of the survey.[5]
LPI results have been used in many policy reports and documents prepared by multilateral organizations and findings from the index provide a worldwide general benchmark for the logistics industry and for logistics users.[6] LPI results have also been embraced by the academic community.
Understanding what comprises the index edit
The logistics performance (LPI) is the weighted average of the country scores on six key dimensions:[3]
- The efficiency of the clearance process (i.e; speed, simplicity and predictability of formalities) by border control agencies, including customs.
- Quality of trade and transport-related infrastructure (e.g., ports, railroads, roads, information technology);
- Ease of arranging competitively priced shipments;
- Competence and quality of logistics services (e.g., transport operators, customs brokers);
- Ability to track and trace consignments;
- Timeliness of shipments in reaching the destination within the scheduled or expected delivery time.
Top 10 LPI countries edit
Full listing by country is available on The World Bank website.[4]
| 2018 | 2016 | 2014 | 2012 | 2010 | 2007 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Country | Rank | Score | Rank | Score | Rank | Score | Rank | Score | Rank | Score | Rank | Score |
 Germany |
1 | 4.20 | 1 | 4.23 | 1 | 4.12 | 4 | 4.03 | 1 | 4.11 | 3 | 4.10 |
 Sweden |
2 | 4.05 | 3 | 4.20 | 6 | 3.96 | 13 | 3.85 | 3 | 4.08 | 4 | 4.08 |
 Belgium |
3 | 4.04 | 6 | 4.11 | 3 | 4.04 | 7 | 3.98 | 9 | 3.94 | 12 | 3.89 |
 Austria |
4 | 4.03 | 7 | 4.10 | 22 | 3.65 | 11 | 3.89 | 19 | 3.76 | 5 | 4.06 |
 Japan |
5 | 4.03 | 12 | 3.97 | 10 | 3.91 | 8 | 3.93 | 7 | 3.97 | 6 | 4.02 |
 Netherlands |
6 | 4.02 | 4 | 4.19 | 2 | 4.05 | 5 | 4.02 | 4 | 4.07 | 2 | 4.18 |
 Singapore |
7 | 4.00 | 5 | 4.14 | 5 | 4.00 | 1 | 4.13 | 2 | 4.09 | 1 | 4.19 |
 Denmark |
8 | 3.99 | 17 | 3.82 | 17 | 3.78 | 6 | 4.02 | 16 | 3.85 | 13 | 3.86 |
 United Kingdom |
9 | 3.99 | 8 | 4.07 | 4 | 4.01 | 10 | 3.90 | 8 | 3.95 | 9 | 3.99 |
 Finland |
10 | 3.97 | 15 | 3.92 | 24 | 3.62 | 3 | 4.05 | 12 | 3.89 | 15 | 3.82 |
2018 Logistics Performance Index edit
World Bank has recently come out with the Logistics Performance Index 2018 (released every two years). Germany again leads the table as #1 with an LPI score of 4.20. Followed by Sweden, Belgium, Austria and Japan in that order of top 5 Nations. The LPI scores of high-income countries are 48% higher than in lower-income countries. Logistics is a $4.3 trillion industry globally. It is the backbone of trade, and good logistics can reduce trade cost and make countries compete globally. Getting logistics right means improving infrastructure, skills, customs and regulations, policies and governance at the right proportion. India's rank fell from 35 in 2016 to 44 in the 2018 ranking.[7]
2016 Logistics Performance Index edit
In the 2016 LPI, the top position is held by Germany (LPI score of 4.23). Civil war-inflicted Syria holds the last position (LPI score of 1.60). India’s ranking jumped from 54 in 2014 to 35 in 2016 whereas its score also improved from 3.08 in 2014 to 3.42 in 2016. [8][9]
Controversy edit
Several studies have noted that, due to the nature of the methodology of the LPI, where it was comprised solely out of subjective answers of different logistics operators, it tended to be skewed and undervalued some countries with a statistically better logistics system.[10][11] Moreover, studies have shown that the LPI was much more influenced by social, rather than economic factors.[12] As of 2023 the World Bank has changed the LPI methodology to address these issues.
References edit
- ^ "Logistics Performance Index". World Bank.
- ^ "International LPI Global Ranking". World Bank. Retrieved 13 November 2017.
- ^ a b "International LPI | Logistics Performance Index". World Bank. Retrieved 2020-12-20.
- ^ a b "International LPI Global Ranking". World Bank.
- ^ "About | Logistics Performance Index". World Bank.
- ^ "Connecting to Compete 2018: Trade Logistics in the Global Economy - The Logistics Performance Index and its Indicators" (PDF). World Bank.
- ^ "Global Rankings 2018 | Logistics Performance Index". World Bank.
- ^ "Country Score Card: India 2016 | Logistics Performance Index". lpi.worldbank.org. Retrieved 16 February 2018.
- ^ Bhuyan, Ragini (29 June 2016). "India jumps 19 places in World Bank's logistics performance index". livemint.com. Retrieved 16 February 2018.
- ^ Beysenbaev, R.; Dus, Y. (2020), "Proposals for improving the Logistics Performance Index", The Asian Journal of Shipping and Logistics, 36 (1): 34–42, doi:10.1016/j.ajsl.2019.10.001
- ^ Raimbekov, Z.; Syzdykbaeva, B.; Mussina, K.; Moldashbaeva, L.; Zhumataeva, B. (2017), "The study of the logistics development effectiveness in the Eurasian Economic Union countries and measures to improve it", European Research Studies Journal, 4B: 260–276
- ^ Guner, S.; Coskun, E. (2012), "Comparison of impacts of economic and social factors on countries' logistics performances: a study with 26 OECD countries" (PDF), Research in Logistics and Production, 2 (4): 329–343