Richer countries rank better on logistics

Richer countries rank better on logistics
Rich countries have better logistics.
By bne IntelliNews August 5, 2016

Global trade depends on logistics and countries with efficient logistics can easily connect firms to domestic and international markets through reliable supply chains. Countries with inefficient logistics face higher costs – both in terms of time and money – in international trade, according to World Bank's 2016 Logistics Performance Index.

Currently Germany is the most efficient at logistics in the world ranked at number one, followed by Luxembourg, Sweden, Netherlands and Singapore. The UK is in 8th position and the US is in 10th.

The highest placed country from Emerging Europe is the Czech Republic ranked at 26, just ahead of China at 27, Lithuania at 29, Hungary at 31, Poland at 33 and Turkey at 34th. From Eastern Europe Ukraine is top at 80, Russia at 99 and Belarus at 120. Tajikistan is the lowest ranked from Eurasia at 153th spot. Syria was dead last in the poll at 160th place.

The rankings broadly reflect the quality of the government. “Crucially, logistics is not only a private endeavour, but also a public policy concern. The performance and reliability of supply chains depend on an array of interventions, ranging from trade facilitation at the border to infrastructure and regulations and to urban planning and skills,” says Anabel González, senior director of the Trade & Competitiveness Global Practice at the World Bank and author of the LPI report.

The report says that while much has been done in emerging markets to improve logistics, more work is needed. More worryingly, the gap between the top two quintiles and all the others even seems to be widening again since the last few years. The first survey was made in 2007 in the boom years, but the gap could be due the global crisis that started in 2008, which has forced cash-strapped governments around the world to slash infrastructure spending. At the same time, rich countries have been trying to cushion the economic shock by throwing money at infrastructure.

“In 2016, however, the widening of the gap between the top and the bottom was amplified by the highest average scores ever among the top countries (4.13 in 2016) and the lowest average scores among countries at the bottom since 2007 (1.84 in 2007; 1.91 in 2016),” González says.