10 October 2018
Developed and Developing Countries - The Increasing Trade Logistics Gap

The World Bank Group has released a new report called ‘Connecting to Compete’ that highlights the fact that advanced economies continue enjoying the status of global leaders in trade logistics. The ‘Connecting to Compete’ is a bi-annual report that is responsible for scoring an approximate of 168 nations and contains the Logistics Performance Index (LPI). The 6 th Edition of the ‘Connecting to Compete’ report has been instrumental to bring the current “confused” scenario to light.
Since the year of 2007, the report is published biennially and released by the renowned World Bank Group. The report makes good use of both qualitative and quantitative measures to compare the scenarios related to logistics friendliness prevalent in more than 160 countries. Of course, we all know just how important a role logistics plays in global trade. To put it precisely, logistics is the active network of services that facilitate the transfer of goods within and across the borders. It encompasses a series of activities like warehousing, terminal operations, transportation, express delivery, brokerage, data and information management, etc. In fact, the strength of a nation’s economy is wholly dependent on the quality of its logistics services. Due to the excessive scattering of the supply chains, the logistics services can now decide whether a country is deemed fit to enter and survive the cut-throat competition in the global economy.
In the recent times, several countries have utilized the tried-and-tested logistics-related investments and reforms to develop modern services or perhaps, to build infrastructure. In fact, these strategies have also proven beneficial in boosting trade and transportation throughout the world. Undoubtedly, logistics services maintain the strong foundation of international trade. If we consider the performance in the field of logistics, high-income countries scored an average higher than at least 48% than the low-income countries. For the developing nations, it seems that the basic mantra for developing the custom, skills, regulation, infrastructure etc. is the right logistics. The ‘Connecting to Compete’ report explains how well-planned supply chains can be great at linking firms to both domestic and international opportunities in trade. The 2018 LPI has successfully showcased the flexibility observed in supply chains and their environmental footprint, as well. It also reveals the requirement of qualified workers to promote the resiliency in the supply chains.
According to the views put forward by the A1 Worldwide Logistics, the possibility of a logistics labor shortage is a nagging concern for all countries, irrespective of whether it is in an advanced or developing stage. While advanced countries can relate to a serious shortage of blue-collar laborers (such as truck drivers), the developing countries face the trouble of recruiting a large number of managerial-level workers. The high-income countries undergo a lot of preparations against cyber threats when compared to the low-income ones. Also, the high-income countries make more attempts to seek eco-friendly logistics services than the low-income ones. This attempt is extremely necessary for preventing air pollution where huge amounts of carbon dioxide emissions are released during transport.
Over the last four LPI editions, it has been established that Germany has scored the highest aggregate, no doubts whatsoever. Interestingly, high-income countries have secured the highest ranks in logistics performance, themselves being the commanding players in the supply chain. Similarly, countries that are fragile, low-income, isolated or experiencing a state of unrest or conflict, are the ones that are left with the low ranks. If we consider the category including the lower-middle-income group countries, large economies such as India, Indonesia etc. can be declared as top performers. Let us not forget that some of the strong, emerging economies like Vietnam and Cote d’lvoire can also be titled as top performers in the same category.
Ms. Christina Wiederer, Trade and Investment Global Practice and report co-author, Economist with the World Bank Group’s Macroeconomics, has repeatedly emphasized the significance of good logistics. The reason behind this is that the international trade is now much easily distributed because the global value chains are acting as a reliable medium. Unfortunately, even a little disturbance in a single supply chain can create ripples of disorder and can spread over rapidly to numerous regions and countries. This is where strong logistics can ensure the resiliency inside a network of supply chains. The ‘Connecting to Compete’ report along with its Logistics Performance Index serve as important tools to educate the government about the connection between logistics, trade and growth, and the necessary requirements for overall success in this industry. These tools are also actively used in helping the government understand their progress in trade logistics regarding the key criteria. Generally, the key criteria include the price of international cargo, the quality of trade-related infrastructure, competence and quality of logistics, and lastly, the frequency at which the cargo reaches the endpoints of their journeys on time.

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