India ranks 54^th in Trade Logistics Performance across Globe – World Bank

The World Bank in its report Connecting to Compete 2014: Trade Logistics in the Global Economy, shows the performance of countries across the world  on the basis of Logistics Performance Index (LPI) which  is an indicator of  on-the ground efficiency of trade supply chains, or logistics performance . The index ranks 160 countries depending on a number of aspects of global trade, including customs performance, infrastructure quality, and timeliness of shipments to reflect on the timeliness, cost and reliability of country’s execution of international trade.

According to the report, high-income countries dominate the top 10 rankings and also remained relatively unchanged since 2010. Germany is reported as the best performing country with an LPI score of 4.12 and followed by Netherlands , Belgium , United Kingdom , Singapore , Sweden , Norway , Luxembourg , United States , and Japan with an LPI score ranging from 4.05 to 3.91.

With an overall rank of 54, India with the LPI score of 3.08 is ranked 3^rd amongst lower-middle income countries. India is also reported as the over performing trade logistics performance amongst the non high-income economies. The other over performing non high-income economies are Malaysia , South Africa , China , Thailand and Vietnam . However, India ’s trade logistic performance has exhibited a fall as compared with 2010 when LPI score of 3.12 was recorded for the country.

Trade Logistic Performance comparison with select countries

Countries	Particulars	Customs	Infrastructure	International Shipments	Logistics, Quality & Competence	Tracking & Tracing	Timeliness
India	Rank	65	58	44	52	57	51
	Score	2.72	2.88	3.2	3.03	3.11	3.51
China	Rank	38	23	22	35	29	36
	Score	3.21	3.67	3.5	3.46	3.5	3.87
Malaysia	Rank	27	26	10	32	23	31
	Score	3.37	3.56	3.64	3.47	3.58	3.92
South Africa	Rank	42	38	25	24	41	33
	Score	3.11	3.2	3.45	3.62	3.3	3.88
Thailand	Rank	36	30	39	38	33	29
	Score	3.21	3.4	3.3	3.29	3.45	3.96
Vietnam	Rank	61	44	42	49	48	56
	Score	2.81	3.11	3.22	3.09	3.19	3.49

Source: PHD Research Bureau, compiled from World Bank

Note - The LPI index is a multidimensional assessment of logistics performance, rated on a scale from 1 (worst) to 5 (best). The six core components captured by the LPI survey are rated by respondents on a scale of 1–5, where 1 is very low or very difficult and 5 is very high or very easy. Ranks are given out of 160 countries.

Suggested strategies to improve logistics performance:

In low-income countries, the biggest gains typically come from improvements to infrastructure and basic border management. This might mean reforming a customs agency, but, increasingly, it means improving efficiency in other agencies present at the border, including those responsible for sanitary and phyto-sanitary controls. Often, multiple approaches are required.

Middle-income countries, by contrast, usually have fairly well-functioning infrastructure and border control. They generally see the biggest gains from improving logistics services, and particularly outsourcing specialized functions, such as transportation, freight-forwarding, and warehousing.

In high-income countries, there is a growing awareness of – and a demand for – “green logistics,” or logistics services that are environmentally friendly. In 2014, about 37 percent of LPI survey respondents shipping to OECD countries recognized a demand for environmentally friendly logistics solutions, compared with just 10 percent of those shipping to low-income destinations.

Warm regards,

Dr. S P Sharma

Chief Economist