Dhaka performs better in global logistics business
Sunday, 17 January 2010
FE Report
Competitive shipping charges and timely shipment have helped Bangladesh perform better in global logistics business, becoming a star performer in the developing world, according to the World Bank.
But the bank's 2010 trade logistics report said poor Customs clearance and automated tracking system dragged down the country's overall performance, although it fared well among the low-income nations.
Bangladesh has become top ten "most significant" over-performers in the developing world as it joins China, Democratic Republic of Congo, India, Madagascar, the Philippines, South Africa, Thailand, Uganda, and Vietnam, according to the logistics performance indicators (LPI).
In the index, it ranks 79 out of 155 nations reviewed while scoring 2.74.
The report identified Botswana, Croatia, Eritrea, Fiji, Gabon, Greece, Montenegro, Namibia, Russian Federation, and Slovenia as the 10 most significant under-performers.
An over-performer is a country with a higher LPI score than would be expected based solely on its income level, whereas, an under-performer is a country with a lower than expected LPI score.
"Most high-income countries are in the top 20 per cent of LPI performers, but other country income groups display considerably more dispersion," says the report.
The report said upper and lower middle-income countries are distributed across all five of the 2010 LPI quintiles-with scores ranging from the bottom group of logistics performers to the top.
Even low-income countries have LPI scores across four of the five quintiles, says the report. Vietnam, a low-income country, has an LPI score broadly comparable with those of some upper middle income, it added.
The existence of these two groups, as well as the general dispersion in performance within income groups, suggests that policy has a strong influence on logistics sector performance.
The capacity of countries to efficiently move goods and connect manufacturers and consumers with international markets is improving around the world, but much more progress is needed to spur faster economic growth and help firms benefit from trade recovery, according to the World Bank.
Germany is the top performer among the 155 economies ranked in the LPI, which are included in the report. The study is based on the most comprehensive world survey of international freight forwarders and express carriers.
"Economic competitiveness is relentlessly driving countries to strengthen performance, and improving trade logistics is a smart way to deliver more efficiency, lower costs and added economic growth," said WB president Robert B Zoellick.
"Streamlining the connections among markets, manufacturers, farmers and consumers offers tremendous growth and investment opportunities and should be a top focus for developing country growth strategies," he added.
According to the LPI, high income economies dominate the top logistics rankings, with most of them occupying important places in global and regional supply chains. By contrast, the ten lowest performing countries are almost all from the low and lower income groups.
Although the study shows a substantial "logistics gap" between rich countries and most developing countries, it finds positive trends in some areas essential to logistics performance and trade. Some of them include the modernisation of Customs, use of information technology, and development of private logistics services.
"Countries with better logistics performance can grow faster, become more competitive and increase their level of investment," said Bernard Hoekman, World Bank Trade Department Director. "Our research shows that increasing logistics performance in low income countries to the middle-income average could boost trade by around 15 per cent and benefit all firms and consumers through lower prices and better quality services."
The report, headed by World Bank economists Jean Francois Arvis and Monica Alina Mustra, notes that among developing economies logistics performance transcends the level of per capita income: Many countries perform better than what their income level would suggest.
Likewise, the countries with significant improvement in performance between the two surveys (the 2007 and 2010 LPI) are often those which implemented comprehensive logistics and trade facilitation reforms earlier, such as Colombia, Brazil, and Tunisia.
Competitive shipping charges and timely shipment have helped Bangladesh perform better in global logistics business, becoming a star performer in the developing world, according to the World Bank.
But the bank's 2010 trade logistics report said poor Customs clearance and automated tracking system dragged down the country's overall performance, although it fared well among the low-income nations.
Bangladesh has become top ten "most significant" over-performers in the developing world as it joins China, Democratic Republic of Congo, India, Madagascar, the Philippines, South Africa, Thailand, Uganda, and Vietnam, according to the logistics performance indicators (LPI).
In the index, it ranks 79 out of 155 nations reviewed while scoring 2.74.
The report identified Botswana, Croatia, Eritrea, Fiji, Gabon, Greece, Montenegro, Namibia, Russian Federation, and Slovenia as the 10 most significant under-performers.
An over-performer is a country with a higher LPI score than would be expected based solely on its income level, whereas, an under-performer is a country with a lower than expected LPI score.
"Most high-income countries are in the top 20 per cent of LPI performers, but other country income groups display considerably more dispersion," says the report.
The report said upper and lower middle-income countries are distributed across all five of the 2010 LPI quintiles-with scores ranging from the bottom group of logistics performers to the top.
Even low-income countries have LPI scores across four of the five quintiles, says the report. Vietnam, a low-income country, has an LPI score broadly comparable with those of some upper middle income, it added.
The existence of these two groups, as well as the general dispersion in performance within income groups, suggests that policy has a strong influence on logistics sector performance.
The capacity of countries to efficiently move goods and connect manufacturers and consumers with international markets is improving around the world, but much more progress is needed to spur faster economic growth and help firms benefit from trade recovery, according to the World Bank.
Germany is the top performer among the 155 economies ranked in the LPI, which are included in the report. The study is based on the most comprehensive world survey of international freight forwarders and express carriers.
"Economic competitiveness is relentlessly driving countries to strengthen performance, and improving trade logistics is a smart way to deliver more efficiency, lower costs and added economic growth," said WB president Robert B Zoellick.
"Streamlining the connections among markets, manufacturers, farmers and consumers offers tremendous growth and investment opportunities and should be a top focus for developing country growth strategies," he added.
According to the LPI, high income economies dominate the top logistics rankings, with most of them occupying important places in global and regional supply chains. By contrast, the ten lowest performing countries are almost all from the low and lower income groups.
Although the study shows a substantial "logistics gap" between rich countries and most developing countries, it finds positive trends in some areas essential to logistics performance and trade. Some of them include the modernisation of Customs, use of information technology, and development of private logistics services.
"Countries with better logistics performance can grow faster, become more competitive and increase their level of investment," said Bernard Hoekman, World Bank Trade Department Director. "Our research shows that increasing logistics performance in low income countries to the middle-income average could boost trade by around 15 per cent and benefit all firms and consumers through lower prices and better quality services."
The report, headed by World Bank economists Jean Francois Arvis and Monica Alina Mustra, notes that among developing economies logistics performance transcends the level of per capita income: Many countries perform better than what their income level would suggest.
Likewise, the countries with significant improvement in performance between the two surveys (the 2007 and 2010 LPI) are often those which implemented comprehensive logistics and trade facilitation reforms earlier, such as Colombia, Brazil, and Tunisia.