Logistics – Competitive advantage of Nations

There are several advantages that a nation can provide to make itself competitive. Logistics though discussed was overlooked before. However recent studies by WTO helps measure the logistics competence on a nation level based on operators on ground worldwide.

Logistics Performance Index (LPI) is measured on

(1) Perceptions of the logistics environment of trading partner countries

• Efficiency and effectiveness of Customs and other border procedures,
• Quality of Transport and IT infrastructure for logistics
• Ease and affordability of arranging shipments
• Competence in the local logistics industry (e.g., transport operators, customs brokers
• Ability to track and trace shipments
• Domestic logistics costs (e.g., local transportation, terminal handling, warehousing
• Timeliness of shipments in reaching destination.

(2) Information of the logistics environment in the home country of operation

• Direct freight costs,
• Quality of transport and IT Infrastructure
• Competence in the delivery of input services logistics operators need
• Performance of the clearance process of exports and imports
• Constraints affecting logistics performance
• Trends

(3) Real time-cost performance data for country of operation

• Number of border agencies,
• Customs performance indicators (time release, inspection data, possibility of review for imports
• Percentage of damaged shipments
• Lead times to export and import (based on best 10%, median 50% and worst 90% of shipments).

Source: WorldBank