1. What is the LPI? 2. Implementation of the Survey 3. Main Findings and their Application 4. LPI Survey 2008 and Beyond
Logistics Performance Index (LPI)and its indicators • Trade logistics is playing an increasingly important role • The LPI provides the most comprehensive data on country performance Unique and consistent resource for: policy makers, reformers, and the trade facilitation constituency
What is the LPI • The LPI is an effective measure of trade facilitation to allow policy makers and researchers to: • benchmark a country’s overall performance on several dimensions in trade logistics, and • assess the quality of a country’s connections to the global market The Project The Dataset • Is the product of a survey of operational staff in global forwarding and express carriers companies. • Is designed to assess their perception of trade logistics performance of the countries they are dealing with and in the country in which they operate. • Is now available to policy makers, researchers, firms, stakeholders, and international organizations (e.g. World Bank, IMF, WTO, WCO, UNCTAD) to further promote the agenda of trade facilitation. • Built upon the positive results demonstrated through pilot surveys that were carried out for the World Bank by TSE, Finland. • Is supported by the members of GFP with active support and participation of FIATA and GEA.
Unique dataset to measure country performance across several dimensions of logistics: • Infrastructure • Customs and border processing • Logistics competence of local service providers • Domestic costs • Timeliness • Tracking and Tracing • Ease of arranging international shipments
TSE World Bank Global Express FIATA Other global partners • Partnership with the private sector • World’s largest freight forwarding and express carriers companies, and several national/regional associations were surveyed through a web-based questionnaire: • Increasing country coverage - LPI Built upon 5500 country “international” assessments Global Facilitation Partnership The GFP will be instrumental in the dissemination strategy.
Innovative methodology • Assessments from professionals outside the country, trading with it • Assessment of domestic business environment • Numerical information (time and cost data) • Questionnaire designed with input from logistics professionals • Primary data gathered for 150 countries
www.worldbank.org/lpi Overall synthetic index (LPI) on a 1-5 scale, Ranking and component • Logistics Business environment • Numerical data Available as:Rankings, Maps, scorecards
LPI Survey - Implementation A two-step approach. Partner entities Multinational firms/ National Associations of FF • Management agrees to sponsor the LPI survey with project team • Senior management identifies a focal person • The focal person mobilized operational personnel – the respondents –(i.e. sent an e-mail invitation to take the survey) Respondents Within the Partners • Respondents were the participating logistics professionals who deal with international shipments
Role of Partners Commitment Benefits • Get access to comparative analysis of the logistics perceptions of their firm against the LPI results. • Receive a report on 30 countries of choice free of charge. • Have the opportunity to interact with the LPI team of experts. • Obtain the right to use the LPI logo for public relations. • Assigned a global focal contact person in their firm who assisted with making practical arrangements for the LPI survey. • Engaged key personnel worldwide in answering the LPI survey.
World Map provides a color-coded map for the global view of the overall LPI index and the seven key dimensions
Overall LPI Ranking presents performance scores of all countries on the overall LPI index, as well as on the seven key dimensions, in a sortable table format
Overall LPI Scores • The overall LPI, on a 1 (worst) to 5 (best) scale) is aggregated by standard techniques (PCA)
Consistency & Robustness • LPI consistent with intuitive knowledge of country performance, very specific ranking • Homogeneous respondent population • The LPI, on a 1 (worst) to 5 (best) scale) is aggregated by standard techniques (PCA), so as to reduce noise, • Confidence interval (+/- 10 %) provided, on average 8 places in the ranking.
Key Findings LPI strongly associated with competitiveness outcomes: growth, trade expansion and diversification of exports • Perceptions matter, professionals views are significant • Performance depends upon infrastructure, border processes, and quality of services - areas where significant gaps are observed but • … the level of service (predictability, reliability) ultimately matters most for traders and depends upon the weakest link in the supply chain • Private sector services as well as public • More than income level
More than income: the “logistics gap” China and Thailand
Key Policy Implications • Expand the traditional agenda infrastructure and customs IT, to areas such as logistics services or border agencies coordination • Synergies and comprehensiveness of reforms • Cross-cutting reforms supported by broad constituencies exporters, service operators, public agencies • Typology and rankings capacity to initiate a virtuous circle of performance improvement New thinking needed to address the case of the most severely constrained countries (e.g. LLDCs)
What is next? • The World Bank and its partners plan to replicate the survey (Mid Nov-Mid Jan) • Improved and more friendly questionnaire • Increase the number of respondents • Involve additional sponsoring organizations, including national associations Global launch of the LPI Nov 5 www.worldbank.org/lpi