Logistics Performance Index

 

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One of the most salient benchmarks in supply-chain management is the World Bank’s Logistics Performance Index (LPI), which has received wide acceptance and coverage. Its goal is to assess how countries rank in the managerial and physical effectiveness of their logistics.

The LPI is an interactive benchmarking tool created 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, its main objective since it was created in 2007. The LPI 2016 allows for comparisons across 160 countries.

The LPI is a composite index based on proxy measures for transport and information infrastructure, supply chain management (SCM), and trade facilitation capabilities, which are calculated based on a world survey of international freight forwarders and express carriers. Therefore, it consists therefore of both qualitative and quantitative measures and helps build profiles of logistics friendliness for these countries. It measures performance along the logistics supply chain within a country and offers two different perspectives: international and domestic.

International LPI:

Provides qualitative evaluations of a country in six areas by its trading partners—logistics professionals working outside the country.

Domestic LPI:

Provides both qualitative and quantitative assessments of a country by logistics professionals working inside it. It includes detailed information on the logistics environment, core logistics processes, institutions, and performance time and cost data.

In 2016, more than 7,000 country assessments were made by logistics professionals, in line with the past two years. Moreover, this year covers 160 countries in the international LPI, whereas the domestic LPI covers more than 125 countries.

LPI

The World Bank’s LPI analyzes countries in six components:

  • The efficiency of customs and border management clearance
  • The quality of trade and transport infrastructure
  • The ease of arranging competitively priced shipments
  • The competence and quality of logistics services
  • The ability to track and trace consignments
  • The frequency with which shipments reach consignees within scheduled or expected delivery times

The Top Ten 

LPI

Spain and DR are in the position 23 and 91, respectively. 

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The LPI Methodology

Because logistics has many dimensions, measuring and summarizing performance across countries are challenging. Examining the time and costs associated with logistics processes—port processing, customs clearance, transport, and the like—is a good start, and, in many cases, this information is readily available. But even if complete, this information cannot be easily aggregated into a single, consistent, cross country dataset because of structural differences in country supply chains. Even more important, many critical elements of good logistics such as process transparency and service quality, predictability, and reliability cannot be assessed using only time and cost information.

The following tables show how they group the countries and the results of 2016. 

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Sources:

 

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