Progress in trade logistics performance slowed down over the last two years amid the global recession, but countries that pursued aggressive reforms continued to improve their performance, the World Bank’s latest survey on trade logistics has shown.
The study is based on a comprehensive world survey of international freight forwarders and express carriers.
While Nigeria dropped in ranking from 100th position in the 2010 survey to 122nd position in the current one, many countries like Chile, China, India, Morocco, South Africa, Turkey, and the United States of America all improved their previous performance, according to the study.
Singapore overtook Germany to rank first among the 155 economies included in the Logistics Performance Indicators (LPI), which are part of the Connecting to Compete 2012: Trade Logistics in the Global Economy report, while Germany dropped to the fourth position.
“Trade logistics is key to economic competitiveness, growth, and poverty reduction,” said World Bank Vice President for Poverty Reduction and Economic Management (PREM), Otaviano Canuto. “Unfortunately, the logistics gap between rich and poor countries continues and the convergence trend experienced between 2007 and 2010 has stalled as events like the global recession, and the European debt crisis shifted attention away from logistics reform.”
According to the LPI, high income economies dominate the top logistics rankings, while the economies with the worst performance are least developed countries that are also often landlocked, small islands, or post-conflict states.
Nevertheless, logistics performance is not simply determined by the level of per capita income, as many countries across different income groups have done better than their peers.
“Infrastructure stands out as the chief driver of progress in top performers, followed by improvements in logistics services, and customs and border management,” said Mona Haddad, Sector Manager of the World Bank’s International Trade Department. “All top performers show strong cooperation between the public and private sectors, and a comprehensive approach in the development of services, infrastructure and efficient logistics.”
The 2012 LPI shows preconditions for efficient logistics. All top performers have developed and maintained a strong public-private partnership and dialogue; good cooperation between policymakers, practitioners, administrators and academics; and a comprehensive approach in the development of transport services, infrastructure and efficient logistics.
Only by fostering cooperation between the public and private sectors, and by considering the impact of all agencies on the supply chain can a country create sustainable improvements in its logistical capabilities, the study says.
At a time where food prices are at historic highs, the survey also found that logistics is important for food security.
Transport and logistics directly affect the price and local availability of food through the performance and resilience of food chains, especially in African and Middle Eastern countries that depend heavily on food imports.
In developing countries, particularly in landlocked and poor ones, transport and logistics account for 20-60 per cent of delivered food prices. For instance, they make up 48 per cent of the cost of U.S. corn imported by Nicaragua.
The survey, which for the first time included environmental indicators, also found that green logistics is quickly gaining prominence in high-income and emerging economies –a positive development since logistics and freight-related activities may account for up to 15 per cent of human carbon dioxide emissions. Large logistics providers like DHL, FedEx, UPS, and TNT, all now have global initiatives to reduce their carbon footprint, shift to more efficient vehicles, make facilities more efficient, and help clients become more green-friendly.