Logistics Performance Index

The Logistics Performance Index (LPI) is a analysis tool created by the World Bank. It is the combination of the weighted average of the country scores on six key dimensions: customs performance, infrastructure quality, ease of arranging shipments, logistics services quality, consignments tracking and tracing and timeliness of shipments as well as practical data measuring logistics efficiency. This measure indicates the relative ease and efficiency with which products can be moved into and inside a country. Singapore and Finland are the most efficient and highest ranked LPI countries as per the 2023 LPI.

The Logistics Performance Index was reported by the World Bank every two years from 2010 to 2018 with a break in 2020 due to the COVID-19 pandemic and a restructuring of the index methodology, eventually coming out only in 2023. The LPI is based on data from stakeholders in the countries where they operate and those with which they trade. Since 2023 the LPI incorporates certain key performance indicators and big data to complement the results of the survey.

LPI results have been used in many policy reports and documents prepared by multilateral organizations and findings from the index provide a worldwide general benchmark for the
logistics industry and for logistics users. LPI results have also been embraced by the academic community.

Compostition of the index

The logistics performance (LPI) is the weighted average of the country scores on six key dimensions:
# The efficiency of the clearance process (i.e; speed, simplicity and predictability of formalities) by border control agencies, including customs.
# Quality of trade and transport-related infrastructure (e.g., ports, railroads, roads, information technology);
# Ease of arranging competitively priced shipments;
# Competence and quality of logistics services (e.g., transport operators, customs brokers);
# Ability to track and trace consignments;
# Timeliness of shipments in reaching the destination within the scheduled or expected delivery time.

LPI 2023 KPIs

In the 2023 edition, the following KPIs were added to the LPI report:

Container shipping - contains:

1.Number of services

2.Number of alliances

3.Number of partners (countries)

4.Turnaround time (days)

5.Turnaround time weighted by ships TEU

Aviation - contains:

1.Number of partners (countries)

2.Aviation import dwell time (days)

Postal - contains:

1.Average number of international postal partners

2.Delivery time

Import delays - contains:

1.Number of observations

2.Consolidated dwell time

3.Port dwell time

Export delays - contains:

1.Number of observations

2.Consolidated dwell time

3.Port dwell time

Landlocked developing countries - contains:

1.Port dwell time

2.Corridor

3.Inland and destination dwell time

4. Reference dwell times for transit countries

Top 10 LPI countries

Full listing by country is available on ''The World Bank'' website.

2023 Logistics Performance Index

In the 2023 LPI it is important to note that several KPI's were added to the overall LPI, though not included or added to the final score which is still survey-based.

139 countries were considered and for the first time, several countries hold the same rank and position, such as Denmark, Germany, Switzerland and the Netherlands all holding the number 3 rank in the 2023 LPI. Singapore leads the ranking with a 4.3 score. Afghanistan is in last place with a score of 1.9.

2018 Logistics Performance Index

In the Logistics Performance Index 2018 Germany again leads the table as #1 with an LPI score of 4.20. Followed by Sweden, Belgium, Austria and Japan in that order of top 5 Nations. The LPI scores of high-income countries are 48% higher than in lower-income countries. Afghanistan holds the last position with a 1.73 score.

2016 Logistics Performance Index

In the 2016 LPI, the top position is held by Germany (LPI score of 4.23). Civil war-inflicted Syria holds the last position (LPI score of 1.60).

Controversy

Several studies have noted that, due to the nature of the methodology of the LPI, where it was comprised solely out of subjective answers of different logistics operators, it tended to be skewed and undervalued some countries with a statistically better logistics system. Moreover, studies have shown that the LPI was much more influenced by social rather than economic factors.
As of 2023 the World Bank has somewhat changed the LPI methodology to address these issues.

References

{{Politics country lists

World Bank
Freight transport
International rankings