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Logistics Performance Hinges on Resilience and Reliability

Time : 2023-12-02 Hits :1

On April 21, 2023, in Washington, the World Bank unveiled the 2023 Logistics Performance Index (LPI) report. This report evaluates the competency of different nations in swiftly and dependably transporting goods across their borders.

The report, christened “Connecting to Compete,” marks the seventh iteration of the LPI report. In the past three years, the world has witnessed an unparalleled disruption in global supply chains, primarily due to the COVID-19 pandemic, leading to substantial delivery delays. The LPI report encompasses 139 countries and examines the feasibility of setting up reliable supply chain networks and the structural elements that bolster these chains, such as the quality of logistics services, trade and transport infrastructure, and border management.

Mona Haddad, the World Bank’s Global Director of Trade, Investment, and Competitiveness, expressed, “Logistics serve as the backbone of global trade, which is a potent catalyst for economic expansion and poverty alleviation. The LPI report assists developing nations in pinpointing areas that need enhancement to boost their competitiveness.”

Considering all viable trade routes, a container typically spends an average of 44 days in transit from the entry port in the exporting country to the destination port, with a standard deviation of 10.5 days. This duration constitutes 60% of the total time required for international merchandise trade.

As per the 2023 LPI report, the digitization of supply chains from end-to-end, particularly digital initiatives in emerging economies, has curtailed port delays by up to 70% in comparison to developed nations. Moreover, green logistics is witnessing increasing demand, with 75% of shippers opting for eco-friendly transportation methods when exporting to affluent countries.

Christina Wiedlho, a Senior Economist at the World Bank Group’s Macroeconomics, Trade, and Investment Global Practice and a co-author of the report, remarked, “While shipping consumes most of the time, the most substantial delays transpire at seaports, airports, and intermodal junctions. Policies aimed at these areas can enhance reliability.”

Such targeted policies encompass simplifying customs clearance procedures, infrastructure investment, digital technology adoption, and fostering the development of an environmentally sustainable logistics industry through the introduction of low-carbon freight transport modes and more energy-efficient storage techniques.

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