Friday, 15 January 2010

RP zooms in global logistics survey

MANILA, Jan. 15 (PNA) -- The Philippines is among the 10 most significant over performers in trade logistics among developing countries across the world, according to the World Bank.

In its latest Logistics Performance Index (LPI) report released on Friday, the WB ranked the Philippines 44th among 155 countries assessed in the 2010 report. In 2007, when the WB launched the LPI as a benchmark of trade competitiveness, the Philippines was at 65 out of 150 countries.

LPI looks into the quality of the supply chain in a country, specifically in the areas of transport, warehousing, cargo consolidation, border clearance, in-country distribution, and payment systems. It is based on a survey done among logistics professionals — freight forwarders and express carrier companies — outside of the given country and more detailed data from those working in the country.

The current report relies on results of an online survey done last year in which the WB said nearly 1,000 senior industry executives participated.

The Philippines was rated very well in the ease of arranging competitively-priced shipments where it is ranked No. 20 worldwide. Its best score was in timeliness of shipments.

Logistics professionals also gave the country good marks in the ability to track and trace shipments and the overall competence and quality of logistics services. But they gave lower scores for the efficiency of the clearance process and the quality of trade and transport-related infrastructure in the country.

“Streamlining the connections among markets, manufacturers, farmers and consumers offers tremendous growth and investment opportunities and should be a top focus for developing country growth strategies,” the WB said in a statement.

According to the report, LPI results suggest that better logistics performance could raise gross domestic product (GDP) growth by one percent and boost trade by two percent.

The Philippines’ current LPI score is 3.14, placing it squarely among the world’s consistent performers from just a partial performer in 2007 with a score of 2.69. It is No. 3 among its peers of lower middle-income countries.

The highest LPI score is 4.11 attained by Germany, which toppled Singapore from its 2007 top spot. Singapore got a score of 4.09 to place at No. 2 among the global top 10.

All countries with scores of around 3.4 to 5 are logistics friendly. They are considered industry leaders in logistics services with best practices in core customs modernization, and have few trade-related infrastructure bottlenecks, except in rail transport. In Asia, Japan at No. 7, Hong Kong at No. 13, Taiwan at No. 20, South Korea at No. 23, China at No. 27, and Malaysia at No. 29 are also in this class.

At the bottom end of the scale are some African countries, Iraq and Cuba that scored lower than 2.4 and considered logistics unfriendly due mainly to a serious lack of infrastructure, poor logistics services and major constraints in core customs modernization.

In between are the partial performers scoring from around 2.5 to 2.8 and the consistent performers rated up to almost 3.4. While consistent performers have a diversified supply of logistics services, partial performers still suffer from a weak market. Core customs modernization is no longer a constraint among consistent performers but is potentially a major constraint of partial performers.

Trade-related infrastructure is another major constraint among partial performers whereas consistent performers only have problems in supporting trade expansion.

India and Vietnam, like the Philippines, are among the consistent performers and the 10 most significant over performers. But India fell in rank from 39th in 2007 to 47th in the 2010 report. Vietnam is steady at No. 53 in both 2010 and 2007 surveys.

With a score of 2.76, Indonesia is on the brink of losing its consistent performer status. It emerged in the 2010 survey at 75th, falling from No. 43 in 2007.

The best among upper middle-income countries is South Africa, ranked 28th globally, followed by Malaysia. China is No. 1 among lower middle-income countries with its global rank of 27, followed by Thailand at 35. Vietnam leads low-income countries, followed by Senegal at 58.

“Logistics performance is heavily influenced by the quality of public sector institutions and the effective coordination of border clearance processes among all border management agencies,” the WB statement said.

The LPI study also bears out the need for border management reforms as customs units are perceived to be performing better than many other agencies involved in the trade process, it said in the report.

It added that better logistics performance could be attained if countries were to improve transport policies and upgrade infrastructure, as well as increase competition in trade-related services like trucking, freight forwarding and railways. (PNA)

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