W’Bank Highlights Logistics Gaps in Global Trade

Advanced economies remain the global leaders in trade logistics, a new World Bank Group report has disclosed. The report titled: ‘Connecting to Compete,’ noted that across board, most countries had pursued logistics-related reforms and investments to build infrastructure, facilitate transportation and trade, or develop modern services. Despite this progress, the sixth edition of the report revealed a mixed picture. High-income countries scored on average, 48 per cent higher than low-income countries when it comes to logistics performance.

“Logistics services are the backbone of international trade,” the Director of the Macroeconomics, Trade & Investment (MTI) Global Practice at the World Bank Group, Caroline Freund said.

“Good logistics reduce trade costs, but supply chains are only as strong as their weakest link. For developing countries, getting logistics right means improving their infrastructure, customs, skills and regulations.”

The report, which contained the Logistics Performance Index (LPI), is a bi-annual report that scores 168 economies on how efficiently supply chains connect firms to domestic and international opportunities. The 2018 LPI highlighted emerging concerns with the resilience of supply chains, their environmental footprint, and the need for qualified workers.

“Germany has the highest aggregate score over the past four LPI editions. High-income countries that are dominant players in the supply chain have ranked highest in logistics performance. Countries that rank lowest tend to be those that are low-income, isolated, fragile, or facing conflict or unrest. Among the lower-middle-income group countries, large economies such as India and Indonesia and emerging economies such as Vietnam and Cote d’Ivoire stand out as top performers.

“With international trade becoming more dispersed through global value chains, good logistics are more important than ever. Small disruptions to a supply chain can spread rapidly to other countries and regions,” an Economist with the World Bank Group’s Macroeconomics, Trade & Investment Global Practice and the report co-author, Christina Wiederer said.