The World Bank has published their Logistics Performance Index for the first time since 2018.
The LPI ranks countries on critical dimensions of trade including customs performance, infrastructure quality, and timeliness of shipments. The data used in the rankings are derived from a survey of logistics professionals answering questions about foreign countries with which they trade. Respondents are asked to identify their line of business (freight forwarder, transport operator, export/import trader, customs broker), typical freight mode utilized, and country in which they are working.
The index benchmarks six areas of performance and gives nations a score of 1-5 for each category. The categories are: 1) Efficiency of customs clearance process; measuring speed, simplicity, and predictability of formalities 2) Quality of trade related infrastructure; focusing on ports, railroads, and information technology 3) Ease of arranging competitive pricing for shipments; ability to compare rates and services on-line 4) Competence and quality of logistics services; in-country customs brokers, transport operators, and freight forwarders 5) Ability to track and trace shipments; transparency and availability of real time information and 6) Timeliness of shipments in reaching destination within scheduled time of arrival; Hardly Ever, Rarely, Sometimes, Often, Nearly Always.
The Global Rankings show the US at 17th (tied with Republic of Korea), down from 14th in 2018.
See the rankings here: https://lpi.worldbank.org/international/global
Click here to see the methodology used in the Global Rankings: https://lpi.worldbank.org/sites/default/files/2023-04/Methodology_LPI_survey.pdf
Let’s break down the US performance in 2023 vs 2018 by category:
LPI Score; 3.8 down from 3.89
Efficiency of Customs; 3.7 down from 3.78
Infrastructure; 3.9 down from 4.05
Ease of Arranging Intl Shipments; 3.4 down from 3.51
Logistics Competence; 3.9 up from 3.87
Tracking and Tracing; 4.2 up from 4.09
Timeliness of shipments: 3.8 down from 4.08
While most of the scores have dropped slightly, the US’ overall ranking has dropped steadily. Here are the LPI average US rankings for previous years.
2023 tied for 17th.
Readers have commented that the size and complexity of the US economy makes comparisons with smaller countries difficult. This is a fair point. However, there is no question that the US has room for improvement in all six LPI dimensions.
Here are the top ten countries by LPI score for 2023:
|Hong Kong SAR, China|
The full LPI 2023 Report includes more detail and suggestions for policy makers. Read the report here: https://lpi.worldbank.org/sites/default/files/2023-04/LPI_2023_report.pdf
- For the bottom performers, the most important improvements are in customs clearance and infrastructure.
- Mid-level logistics performers are showing progress with more countries clustered at an average score of 3 to 4.
- Logistics services are showing resilience. Even with Covid induced disruptions overall scores in 2023 are broadly the same as in 2018.
The report identifies four performance groups:
- Logistics Friendly- Top performing countries, most of which are high income (25)
- Consistent Performers- Countries performing better than most in their income group (25)
- Partial Performers- Indicates logistics constraints often seen in low and middle-income countries (46)
- Poor Logistics Performers- these are the least developed nations (43)
While comparisons among nations with diverse economies and levels of development will always be difficult, the LPI can be used by individual countries to identify opportunities to improve.