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Creating Global Value Through Efficient Trade Logistics

Overview. Motivation for logistics indicators researchMethodology for developing logistics indicatorsCross country comparisons of selected logistics indicators Logistics indicators as determinants of bilateral tradeSupply chain-based logistics index . What Determines Bilateral Trade?. . . . .

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Creating Global Value Through Efficient Trade Logistics

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    1. Creating Global Value Through Efficient Trade Logistics

    2. Overview Motivation for logistics indicators research Methodology for developing logistics indicators Cross country comparisons of selected logistics indicators Logistics indicators as determinants of bilateral trade Supply chain-based logistics index

    3. What Determines Bilateral Trade?

    4. Past Studies on Bilateral Trade

    5. Our Focus

    6. Research Opportunities Institutional quality and infrastructure variables have been based on subjective indices or expert assessments. Quantifiable and measurable logistics performance indicators have not been used. Variables used are not easily translated into operations i.e. not directly actionable. Best results without using country-specific dummy variables explain 66% of variability in bilateral trade.

    7. Objectives of Research Determine the significance of logistics performance in influencing bilateral trade through the use of measurable and quantifiable logistics indicators. Perform a critical assessment of logistics performance of countries globally. Develop supply-chain logistics index to guide resource allocation and deployment for improving logistics efficiency.

    8. Snapshot of Methodology

    9. Global Logistics Indicators Dimensions of measurement: Examples Total time for a trade transaction Document processing time Customs clearance Technical control Vessel turnaround Vessel waiting time for berth CSI related time

    11. Methodology: Assumptions

    15. Coastal Countries

    21. Percentage of Import Containers Inspected

    23. Criteria for Selection of Containers for Customs Inspection (Sample countries)

    24. Augmented Gravity Model

    25. Critical Global Logistics Indicators

    26. Augmented Gravity Model Results

    27. Observations Measurable and quantifiable logistics indicators improve explanatory power of gravity model for bilateral trade. Logistics indicators results show efficient logistics in time and cost can contribute to increased trade. Variability matters higher variability in processing time can be a deterrent to bilateral trade.

    28. Supply-Chain Based Logistics Index A single metric to evaluate and measure logistics efficiencies Weights of each variable in the Logistics Index show relative benefits Use weights to guide resource allocation and deployment of logistics improvements A single measure enables quick and easy benchmarking

    29. Supply Chain-Based Logistics Index

    30. Three-Stage Logistic Index Estimation

    31. Stage 1 Logistics Index Model Results

    32. Stage 2 Logistics Index Model Results

    33. Stage 3 Logistics Index Model Results

    34. Model Comparisons

    35. Implications for Logistics Improvements*

    36. Logistics Index Observations It is possible to derive a single logistics index that captures all the explanatory power of all the logistics indicators. The logistics index is a significant determinant of bilateral trade. The logistics index is derived from distance, time, cost and variability measures.

    37. Summary Logistics indicators are a significant determinant of bilateral trade. A single Logistics Index has equal explanatory power to the set of logistics indicators. Private enterprises and government agencies should collaborate to improve logistics performance and reduce logistics friction in order to foster trade. The Logistics Index can be used to guide resource allocation and deployment for such improvement projects.

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