India’s LPI score 3.42 in 2016

The World Bank re­port ranked India as 35th in 2016 as against 54th in 2014, jump­ing 19 places in the Lo­gis­tics Per­for­mance Index.

Cargo Talk - - Report -

Ac­cord­ing to a World Bank re­port ti­tled Con­nect­ing to Com­pete: 2016 Trade Lo­gis­tics in the Global Econ­omy, India’s lo­gis­tics per­for­mance at its key in­ter­na­tional gate­ways has im­proved in the last two years. In the World Bank’s bi­en­nial mea­sure of in­ter­na­tional sup­ply chain ef­fi­ciency, called Lo­gis­tics Per­for­mance Index (LPI), India’s rank­ing has jumped from 54 in 2014 to 35 in 2016 among 160 coun­tries. For the third time, Ger­many has topped in LPI.

The LPI is an in­ter­ac­tive bench­mark­ing tool created to help coun­tries iden­tify the chal­lenges and op­por­tu­ni­ties they face in their per­for­mance on trade lo­gis­tics and what they can do to im­prove their per­for­mance. The LPI 2016 al­lows for com­par­isons across 160 coun­tries. It is based on a world­wide sur­vey of op­er­a­tors on the ground (global freight for­warders and express car­ri­ers), pro­vid­ing feed­back on the lo­gis­tics ‘friend­li­ness’ of the coun­tries in which they op­er­ate and those with which they trade.

In the 2016 re­port, India has in­creased its LPI score to 3.42 com­pared to 3.08 in 2014. India has im­proved its rank­ing by jump­ing 19 po­si­tions com­pared to 54th rank in 2014 LPI. Im­prove­ment in India’s rank­ing demon­strates union govern­ment’s com­mit­ment to make busi­ness eas­ily avail­able in India.

While Ger­many tops the 2016 rank­ings, India is ahead of com­par­a­tively ad­vanced economies like Por­tu­gal and New Zealand. In 2016, India’s in­ter­na­tional sup­ply chain ef­fi­ciency was at 75 per cent of topranked Ger­many, said the re­port. This is an im­prove­ment over the 66 per cent ef­fi­ciency when com­pared to the leader (again Ger­many) in 2014.

Bet­ter per­for­mance in lo­gis­tics will not only boost pro­grammes, such as ‘Make in India’, by en­abling India to be­come part of the global sup­ply chain, it can also help in­crease trade. In 2015-16, India’s for­eign trade shrank by around 15 per cent.

The LPI does not ad­dress how easy or dif­fi­cult it is to move goods to the hin­ter­land. For that, the World Bank has an­other mea­sure—a do­mes­tic LPI that analy­ses a coun­try’s per­for­mance over four fac­tors: in­fra­struc­ture, ser­vices, bor­der pro­ce­dures, and time, and sup­ply chain re­li­a­bil­ity.

While not all yard­sticks are com­pa­ra­ble across coun­tries, there are some which show that India still has some way to go. For in­stance, only 69 per cent of ship­ments from India meet the qual­ity cri­te­ria, com­pared to 72 per cent for China and 77 per cent for Kenya. On the other hand, it takes two and three days to clear ship­ments, with­out and with in­spec­tion, re­spec­tively—num­bers com­pa­ra­ble to China but longer than what it takes in top-ranked Ger­many.

Bet­ter per­for­mance in lo­gis­tics will boost pro­grammes such as ‘Make in India’, by en­abling India to be­come part of the global sup­ply chain

Sim­i­larly, India has an av­er­age of five forms re­quired for im­port or ex­port, com­pared to 4.5 for China and two for Ger­many. On the other side, the com­po­nents an­a­lysed in the in­ter­na­tional LPI were cho­sen based on re­cent the­o­ret­i­cal and em­pir­i­cal re­search and on the prac­ti­cal ex­pe­ri­ence of lo­gis­tics pro­fes­sion­als in­volved in in­ter­na­tional freight for­ward­ing.

The LPI analy­ses coun­tries across six com­po­nents: ef­fi­ciency of cus­toms and bor­der man­age­ment clearance, qual­ity of trade and trans­port in­fra­struc­ture, ease of ar­rang­ing com­pet­i­tively priced ship­ments, com­pe­tence and qual­ity of lo­gis­tics ser­vices, abil­ity to track and trace con­sign­ments, and the fre­quency with which ship­ments reach con­signees within sched­uled de­liv­ery times. It is com­puted from the sur­vey re­sponses of about 1,051 lo­gis­tics in­dus­try pro­fes­sion­als.

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