world bank presentation logistics morocco

7/26/2019 World Bank Presentation Logistics Morocco

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March 27, 2014

Dr. Jean-Franois ArvisSenior Economist, The World Bank

Prof. Lauri Ojala

University of Turku, Finland

CONNECTING TO COMPETEThe 2014 Logistics Performance Index

Transport Business Summit 2014

Brussels


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Outline

1. Why care about logistics?

2. What is the Logistics Performance Index?

3. LPI 2014 Results

4. Key messages

5. The LPIs role in the policy dialogue

6. How the World Bank supports countries in

logistics pollicy-making

2World Bank LPI, Transport Business Summit 2014, Brussels


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Why care about logistics?



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4

50%

70%

90%

110%130%

150%

170%

190%

210%230%

250%

2 2,5 3 3,5 4 4,5

LPI score (2010)

Country trade costs of goods value vs. LPI score

Why Logistics Matters

Supply chain bottlenecks are the primary cause of

friction in trade (trade costs). Reducing them by half

would raise trade by 15% and production by 5% globally.

World Bank LPI, Transport Business Summit 2014, Brussels

A

veragetradecostsofgoodsv

alue


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Logistics Performance and Connectivity

Elasticity of trade costs

0 0,1 0,2 0,3 0,4 0,5 0,6

Distance

Common Border

Common LanguageSame RTA

Tariffs

Shipping Connectivity

Air Connectivity

Logistics Performance

Cost of Starting Business

Exchange Rate

Domestic

Costs

Bilateral

Costs

Source: World Bank, Trade Costs in the Developing World 2013. (RTA = Regional Trade Agreement)5

Besides distance, connectivity and logistics performance

matter more than other trade barriers in boosting trade.

Geography and

(most of) shipping

connectivity are

out of a countrys

control, but policydecisions are not.



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Logistics costs impact productivity

Reliability is often more important than freight costsLogistics costs increase with decreasing logistics performance. Most of this increase

comes from lower reliability and the need to increase inventory (other costs).

6

Firm-level logistics expenditures as % of sales in 2011-2012

Sources: Authors, for Germany: TU Berlin, for Brazil: ILOS, for Finland: Turku School of Economics

7%

7%

5%

5%

13%

9%

7%

4%

0% 5% 10% 15% 20%

Kazakhstan

Estonia

Finland

GermanyTransport cost

Other logistics costs



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What is the

LogisticsPerformance

Index

(LPI)?



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Point of OriginSellers Factory

Alongside

VesselDelivery

to Dock

Exporting Country

Delivered to

Buyers

WarehouseFrontier/

Border

Supply Chain Framework & the sixLPIdimensions

Unloaded

on Dock

Importing Country

Customs

Infrastructure

Services

Quality

Timeliness

International

shipments

Tracking and Tracing



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LPI outline

Built on > 5,000 country assessmentsby over 1,000 freight forwarders &

logistics professionals worldwide

Survey in cooperation with partners

Respondents rate logistics performance

of own country and 8 other countries on

a scale of 1 to 5

Coverage: 160 countries in LPI 2014

Published every 2 years

LPI editions: 2007, 2010, 2012 & 2014

Partnerships



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What do we measure?

Heres a sample question of the Domestic LPI:

Source: LPI 2013/2014 Survey

10

The LPI survey is based on expert

assessments of logistics professionals

(perception-based)World Bank LPI, Transport Business Summit 2014, Brussels


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LPI 2014 Results



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LPI data and report at: lpi.worldbank.org



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Good News: All countries performing better

13

With the right

investment and

policies, lower income

countries can also behigh performers.

30

40

50

60

70

80

90

Bottomquintile

Fourthquintile

Third quintile Secondquintile

Top quintile

Percentageofh

ighestLPIscore

2014 2012 2010 2007

Countries inbottom quintile

saw the largest

improvements

(2007-2014).

LPI score as percentage of highest LPI score by LPI quintile;

2007, 2010, 2012 and 2014World Bank LPI, Transport Business Summit 2014, Brussels


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Income level helps little without aligned policies

Count ries by LPI 2014 overall sco re and GDP/capita



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LPI 2014: Top 10 European performers

15

1

2

3

4

6

8

11

13

17

18

4,1

4,0

4,0

4,0

4,0

3,9

3,9

3,8

3,8

3,7

0 5 10 15 20

Germany

Netherlands

Belgium

United Kingdom

Sweden

Luxembourg

Ireland

France

Denmark

Spain

LPI rank LPI score


LPI 2014 rank out of 160 economies


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LPI is a surveyscores are Confidence Intervals

16

2,5

2,7

2,9

3,1

3,3

3,5

3,7

3,9

4,1

4,3

4,5

DEU

NLD

BEL

GBR

SWE

LUX

IRL

FRA

DNK

ESP

ITA

AUT

FIN

PRT

POL

CZE

HUN

LVA

SVN

EST

ROM

SVK

GRC

LTU

BGR

MLT

HRV

CYP

Score 2014


EU 28 sorted by LPI 2014 score

LPI score range: 1 = lowest; 5 = highest


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17

2,5

2,7

2,9

3,1

3,3

3,5

3,7

3,9

4,1

4,3

4,5

DEU

NLD

BEL

GBR

SWE

LUX

IRL

FRA

DNK

ESP

ITA

AUT

FIN

PRT

POL

CZE

HUN

LVA

SVN

EST

ROM

SVK

GRC

LTU

BGR

MLT

HRV

CYP

Score 2014

Score 2012





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18

2,5

2,7

2,9

3,1

3,3

3,5

3,7

3,9

4,1

4,3

4,5

DEU

NLD

BEL

GBR

SWE

LUX

IRL

FRA

DNK

ESP

ITA

AUT

FIN

PRT

POL

CZE

HUN

LVA

SVN

EST

ROM

SVK

GRC

LTU

BGR

MLT

HRV

CYP

Score 2014

Lower bound 2014

Upper bound 2014





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19

2,5

2,7

2,9

3,1

3,3

3,5

3,7

3,9

4,1

4,3

4,5

DEU

NLD

BEL

GBR

SWE

LUX

IRL

FRA

DNK

ESP

ITA

AUT

FIN

PRT

POL

CZE

HUN

LVA

SVN

EST

ROM

SVK

GRC

LTU

BGR

MLT

HRV

CYP

Score 2014

Score 2012

Lower bound 2014

Upper bound 2014





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20

2,5

2,7

2,9

3,1

3,3

3,5

3,7

3,9

4,1

4,3

4,5

DEU

NLD

BEL

GBR

SWE

LUX

IRL

FRA

DNK

ESP

ITA

AUT

FIN

PRT

POL

CZE

HUN

LVA

SVN

EST

ROM

SVK

GRC

LTU

BGR

MLT

HRV

CYP

Score 2014

Score 2012

Score 2007-2014

Lower bound 2014

Upper bound 2014


World Bank LPI, Transport Business Summit 2014, BrusselsLPI score range: 1 = lowest; 5 = highest


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Aggregated data for 2007-2014 less volatile


0

10

20

30

40

50

60

70

80

DEU

NLD

BEL

GBR

SWE

LUX

DNK

FRA

FIN

IRL

AUT

ESP

ITA

PRT

POL

CZE

HUN

SVN

LVA

SVK

EST

ROM

BGR

LTU

GRC

CYP

MLT

HRV

Rank 2014 out of 160

Rank 2012 out of 155

Weighted rank 2007-2014 out of 166

EU 28 sorted by weighted*

LPI 2007-2014 rank

*) Weights: 2014 = 53.3%; 2012 = 26.7%; 2010 = 13.3%; 2007 = 6.7 %


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LPI 2014: Top 10 performers by income group

22

2,4 2,6 2,8 3,0 3,2 3,4 3,6 3,8 4,0 4,2

MalaysiaChina

Turkey

Hungary

South Africa

Thailand

Romania

Panama

Bulgaria

Mexico

Top 10 upper middle-income

2,4 2,6 2,8 3,0 3,2 3,4 3,6 3,8 4,0 4,2

Vietnam

Indonesia

IndiaPhilippines

Ukraine

Egypt, Arab Rep.

El Salvador

Pakistan

Nigeria

Guatemala

Top 10 lower middle-income2,4 2,6 2,8 3,0 3,2 3,4 3,6 3,8 4,0 4,2

Malawi

Kenya

RwandaCambodia

Burkina Faso

Liberia

Ethiopia

Nepal

Burundi

Bangladesh

Top 10 low-income

2,4 2,6 2,8 3,0 3,2 3,4 3,6 3,8 4,0 4,2

GermanyNetherlands

Belgium

United Kingdom

Singapore

Sweden

Norway

Luxembourg

United States

Japan

Top 10 overall By overall LPI score



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Key messages



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Key messages from the LPI 2014

The gapbetween the best and worst logistics performers isslowly narrowing, confirming trends from LPI 2007-2012 reports.

Although a country's level of development plays an important role

in its logistics performance, policies do matter. Over-performing

countries such as Indonesia have carried out targeted reforms toimprove the efficiency of their logistics.

In terms of trade facilitation, customs show a steady improvement

across the board but other border control agencies lag behind.

Weakest link paradigm: The challenge is to get right a number

of reforms in parallel and in several areas. This explains a lot of

churning in scores and rank in the middle of the sample.



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The Services Gap

25

0

2

4

6

8

10

12

Low income Lower middle

income

Upper middle

income

%-changein LPI

componentas measured

againstthe highestperformer,2007-2014

Customs Infrastructure Quality of logistics and services

Supply chain efficiency depends

on the quality of private services

moving the goods.

If logistics service delivery is

poor, even good physical

connectivity is not enough.



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Persistent & large differences in border process efficiency

26

The import lead

time for

port and airport

supply chains ismore than twice

as long in

low-performing

countries as inhigh-performing

ones.

Import lead time in days (port/airport)

by LPI quintile

0

1

2

3

4

5

6

7

Bottomquintile(lowest

performance)

Fourth quintile(low

performance)

Third quintile(average

performance)

Secondquintile (highperformance)

Top quintile(highest

performance)

ImportLeadTime(Days)



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Key LPI messages for different income levels

Key message for low-income countries:

Progress in logistics performance is driven by improvement ininfrastructure and basic border management reforms.

Key message for middle-income countries:

Focus moves from infrastructure and border management to

development of logistics services with growing demand foroutsourced logistics.

In more sophisticated logistics environments, the low hanging

fruits have largely been reaped. The new generation of reforms is

more complex, involves many stakeholders, and takes time.

Key message for high-income countries:

The demand for environmentally friendly logistics services is

growing in advanced economies.



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Looking for environmental logistics solutions

28

0%

5%

10%

15%

20%

25%

30%

35%

40%

Low income Middle Income High income:nonOECD

High income:OECD

2014 2012

The percentage of respondents looking for

environmentally friendly shipping alternatives is

growing, and is the highest in advanced economies.

Percentageofrespondentslookin

gfor

greenship

pinga

lternatives



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The LPIs role in the policy dialogue



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What is the role of the LPI?

30

The LPI

Is an overall metric of supply chain efficiency.

Provides information of where a country stands

and a broad indication of problem areas.

Is not a diagnostic tool and needs to be supported

by specific tools designed to perform that function.

The LPI has had a significant impact in raisingawareness and pushing for comprehensive

connectivity and logistics policies, e.g. in

the EU, Kazakhstan, APEC and Indonesia.



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Policies matter to Logistics Performance

Ports

Road/rail corridors

Airports PPP

Infrastructure

Customs, payments etc.:

Simplification & automation

Harmonization & standardization

Modernization & governance of border agencies

Procedures and

Trade Facilitation

Forwarders, truckers, brokers etc.

Regulation of entry

Market structure and competition

Competence and quality of service

Services

Green Logistics

City Logistics

Food securitySustainableLogistics

31

Regulations (customs, services) are increasingly

regional (e.g. EU), but implementation national.



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How the World Bank supports countriesin Logistics policy-making



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World Bank lending projects in logistics

World Bank Group lending in FY 2013 USD 52.6 bn

7-8% of the lending portfolio is logistics-related, e.g. in:

International Trade corridors:

Eastern Europe, Central Asia, Central Africa, India, Nepal, Central

America, East & South Africa

Internal corridors, ports:

Brazil, China, Argentina, Indonesia

Customs & fiscal reforms:

Kazakhstan, Russia, Laos, Philippines, Cambodia

Export development:

Tunisia, Latin America



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World Bank advisory work in logistics

Advisory servicesto national governments and

increasingly to regions, for example, in:

Greece, Eastern Europe, Central Asia

Morocco, Tunisia

Western Africa, East Africa, Zambia, Zimbabwe

Colombia,Argentina, Brazil, Uruguay, Peru, Central America

Indonesia, Vietnam, Philippines, Cambodia, Laos

Increasingly fee for service

34

Concept: Exploit synergies between institutional

reforms and infrastructure investment.



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World Banks related indicators

Doing Business Report Trading across Borders Indicator, a red tape metric

e.g. number of document vs. Supply Chain efficiency

Bilateral Trade Costs Database

Since 2013 with trade divisionof UNESCAP

New cross-country indicators:1. Aggregated trade costs by countries

2. Air Connectivity Index (with FAA and IATA)



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Thank you!

world bank presentation logistics morocco

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