1. Logistics Performance Index: what do indicators tell us?
Virginia Tanase
Sr. Transport Specialist
Transport, Water and Information and Communication Technology Department
The World Bank
6th IRU Euro-Asian Road Transport Conference
Tbilisi, Georgia
16-17 June 2011

2. This presentation 1. LPI 2010 2. LPI Data for selected countries
3. Transport considerations
4. Key topics ahead
5. Want to learn more?

3. 1. LPI 2010

4. LPI 2010 www.worldbank.org/lpi
Broad indication of where problems are
Awareness raising to stimulate public-private dialogue on priorities for reform
Trigger fresh impetus for reforms
Monitor progress over time
Reference for policy makers, in all groups of countries
One of the first steps in the World Bank’s country engagement strategy with client countries
The most comprehensive data on country performance

5. What makes logistics efficient?
The six dimensions of country performance measured by the LPI
Efficiency of the clearance process
Quality of trade and transport infrastructure
Ease of arranging competitively priced shipments
Logistics competence and quality of logistics services
Ability to track and trace consignments
Timeliness of shipment delivery
Qualitative data from international freight forwarders outside country A, but trading with it
Efficiency of the clearance process
(i.e. speed, simplicity and predictability of formalities) by border control agencies, including Customs;
Quality of trade and transport infrastructure
(e.g. ports, railroads, roads, information technology);
Ease of arranging competitively priced shipments
(i.e. availability of affordable international transport connections available in that country. This includes also elements of the no. of available frequencies on various modes of transport as well as the scope of related services on offer.
Competence and quality of logistics services
(e.g., transport operators, customs brokers);
Ability to track and trace consignments
Timeliness
(i.e. frequency with which shipments reach the consignee within the scheduled or expected delivery time)
Jan. 15, Worldwide media coverage;
Ranking and component; Logistics business environment and institutions; Performance data
Available as rankings, maps, scorecards
Partnership with the private sector
Built on more than 5,000 country assessments by over 1000 logistics professionals worldwide
Primary data gathered for 155 countries

6. Where is LPI originating from?
Country 1
Country 2
Country 3
Country 4
Country 5
Country A
Country 6
Country 7
Country 8

7. LPI 2010 – performance varies around the world
Overall LPI 2010 scores on a World map
Typology of countries according to impediments in logistics performance:
Logistics friendly • (top quintile)—high performers, for the most part high- income countries.
Consistent performers • (second quintile)—typically emerging economies with a strong logistics constituency.
Partial performers • (third and fourth quintile)—typically low or middle-income countries that have not yet consistently
addressed all the factors of nonperformance.
Logistics unfriendly • (bottom quintile)—severely logistically constrained (least developed countries).
Logistics unfriendly
Partial performers
Consistent performers
Logistics friendly
No data
Countries are improving around the world

8. LPI 2010 ranks TOP 10 COUNTRIES UPPER MIDDLE INCOME TOP 10 COUNTRIES
LOWER MIDDLE INCOME
TOP 10 COUNTRIES
LOW INCOME
Country
LPI Rank
South Africa 28
Malaysia 29
Poland 30
Lebanon 33
Latvia 37
Turkey 39
Brazil 41
Lithuania 45
Argentina 48
Chile 49
Country
LPI Rank
China 27
Thailand 35
Philippines 44
India 47
Tunisia 61
Honduras 70
Ecuador 71
Indonesia 75
Paraguay 76
Syrian Arab Republic 80
Country
LPI Rank
Vietnam 53
Senegal 58
Uganda 66
Uzbekistan 68
Benin 69
Bangladesh 79
Congo, Dem. Rep. 85
Madagascar 88
Kyrgyz Republic 91
Tanzania 95

9. 25 countries achieved significant improvement in LPI
25 countries improved between 2007 and 2010
LICs: Afghanistan, Chad, Haiti, Myanmar, Niger, Tajikistan, Tanzania, and Uzbekistan
LMICs: China, Djibouti, Honduras, Philippines, and Syria
UMICs: Brazil, Colombia, Costa Rica, Dominican Republic, Kazakhstan, Lebanon, Mexico, Poland, Russian Federation, and Uruguay
HICs: Saudi Arabia and the Czech Republic
Proactive and comprehensive policies
Countries with significant improvement in performance between the two surveys implemented proactive and comprehensive logistics and trade facilitation reforms early on (e.g. national logistics/facilitation programs)
Examples: Colombia, Brazil, and Tunisia
Pre-conditions for positive results in logistics
All top performers have developed and maintained:
Long tradition of strong public-private partnership and dialogue
Good cooperation between policymakers, practitioners, administration and academia
Comprehensive approach in the development of services, infrastructure and efficient logistics
Consistent policies in transport and logistics
When comparing LPI results for 2010 and 2007, it is important to pay attention to the confidence intervals.
Only when, for example, the lower bound of a country’s 2010 LPI score is higher than its upper bound can it be concluded that there has been a statistically significant improvement in performance.
Source: Logistics performance survey data, 2010 and 2007

10. LPI: Key messages
Trade logistics is an important element of national competitiveness
A country’s performance is only as good as its weakest link
The LPI dataset can be used to identify key bottlenecks in your own country and therefore
Helps frame your needs and priorities in the trade facilitation and logistics area reform

11. 2. LPI Data – selected countries

12. LPI scores by region

13. LPI scores for selected countries

14. Sub-region’s % of the highest performer
LPI 2010
Highest performer
Germany
100%
Lowest performer
Somalia
11%
LPI 2007
Highest performer
Singapore
100
Lowest performer
Afghanistan 7%
Countries are improving in this region and around the world!
Subregion: Caucasus & Central Asia

15. Performance in the six areas of the LPI
Subregion
2010 Average LPI Score

16. Infrastructure quality
Subregion

17. Costs structure and infrastructure
* return to Romania at 45 days Source: InterBiz Romania

18. Quality of services I
Subregion
TRANSPORT SERVICES

19. Quality of services II
Subregion

20. Border clearance procedures incl. corruption
Subregion ….

21. 3. Transport considerations

22. WB - Transport Lending in the last 10 years (USD millions)

23. WB - Transport Lending by Subsector
Roads and highways: 4651 MUSD

24. WB - Regional Transport Lending by Subsector (FY10) (USD millions)

25. Global infrastructure investment trends by sector 2009-2019
Percentage of total investment in infrastructure
Sources:
Source: CG/LA Infrastructure, 2009.

26. Who invests in Infrastructure?
Sources:

27. The World Bank Group’s Transport Strategy
“Safe, Clean, and Affordable…Transport for Development”, The World Bank Group’s Transport Business Strategy for
The objective of the business strategy, consistent with Sustainable Transport and aligned with the principle of country ownership, remains: to help partner countries to establish the governance, strategies, policies and services that will deliver transport for development in a way that is economically, financially, environmentally and socially sustainable.
In both national and regional programs we will encourage client countries to adopt corridor approaches to investing in transport infrastructure and improving transport services, especially along multicountry regional routes.
The Bank Group will pursue a broader agenda in the roads subsector to meet principles of environmental and social sustainability, in ways that give increasing attention to four main issues including the performance, affordability, and inclusivity of transport services that use road infrastructure and that deliver the ultimate benefits of roads to people and goods.
Good freight transport services integrate developing countries into longer, more complex, and more demanding supply chains that facilitate trade.

28. 4. Key topics ahead

29. Climate Change – the questions
Event: Copenhagen CC summit= agreement that developed countries should raise funds to help developing countries adapt to CC and “green” their economies
Transport and Climate Change: Some BIG Questions
What future use of energy and what GHG emissions?
What impact of CC on the infrastructure?
How can developing countries afford a clean transport?
What is the total long-term cost of a transport mode use?
The most concrete part of the Copenhagen Accord is an agreement that richer countries should raise funds to help poorer nations adapt to climate impacts and "green" their economies.
United Nations Secretary-General Ban Ki-moon says, “We sealed the deal. And it is a real deal. And we will try to have legally binding as soon as possible — in 2010.”
Climate Change
Mitigation policies and tools for curbing/measuring transport emissions
Adaptation in new project designs

30. Affordability (focus on food prices)
Economic distance to markets
Goods prices
Logistical cost
Administration costs, documentation, procedures etc
Handling costs
Packing, palletizing, labeling
Profit, occasional payments, informal etc.
Inventory (incl. warehouse)
Direct costs

31. A changing Trade and Transport Facilitation approach
New agenda
Cross-cutting issues:
Making transit work
Collaborative border management
Quality and efficiency of service providers
Customs brokers
Road transport operators
Freight forwarders
Trade Related infrastructure
Roads
Ports
Railways
Customs reform and modernization
Fiscal focus
IT orientation
Historically trade facilitation reform focused on Customs reform and infrastructure development – Reflected in donor support
Customs reform increasingly seen as only one element of the problem – Customs only responsible for a third of delays
New data available – time, cost and reliability all important for competitiveness
Increased focus on performance measurement
Driving a new and more comprehensive agenda
Much demand for Single Window, One Stop Border Posts, and wider trade and transport logistics improvement
Regional integration high on the new agenda
Old agenda
Both the old and new agendas needed

32. Key policy issues
Expanding the traditional reform agenda beyond customs reform and infrastructure development
Improving the quality of logistics services and increase border agency coordination
Embarking on comprehensive reform—processes, services, and infrastructure—with broad public and private support
Transit corridors: regional coordination and cooperation is vital for landlocked developing countries
Infrastructure: high on the agenda
Tailoring reform to each country’s circumstances

33. 5. Want to learn more?

34. Logistics Performance Index (LPI) contacts
Web site with data
Availability of Trade Department for regional presentations, and discussions.
For further questions, please contact main authors:
Jean Francois Arvis;
Monica Alina Mustra;

35. International Trade Department: contacts
The World Bank Group International Trade Department
Washington Office
1818 H Street NW
Washington DC 20433
Contact:

36. Transport Anchor: main contacts
Web site with resources
Availability for support and technical assistance
For further questions, you may wish to contact
Marc Juhel-Sector Manager,
Virginia Tanase

37. Thank you ! Virginia Tanase E-mail: vtanase@worldbank.org