Logistics Performance Index (LPI) 2023

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Context: Recently, the Logistics Performance Index 2023 was released by the World Bank. India’s ranking on the LPI improved by 6 places to reach 38th place in 2023 edition of LPI as compared to 2018 edition of LPI.

About Logistics Performance Index

  • It is an index compiled by World Bank to help countries identify challenges and opportunities they face in their performance on trade logistics and what they can do to improve their performance. 
  • 139 countries are ranked in the 2023 edition of LPI.
  • 2023 edition of LPI only conducted survey on international component of LPI. Earlier editions of LPI, focused on both domestic & international surveys. 

Components of Logistics Performance Index (LPI)

  • Efficiency of customs & border management clearance
  • Quality of trade and transport related infrastructure
  • Ease of arranging competitively priced international shipments
  • Competence and quality of logistics services
  • Ability to track & trace consignments
  • Frequency with which shipments reach consignees within the scheduled or expected delivery time
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Methodology of Logistics Performance Index

  • For Logistics Performance Index: Worldwide survey of international logistics operators on the ground (global freight forwarders & express carriers), providing feedback on logistics ‘friendliness’ of countries with which they trade.
  • For Key Performance Indicators measuring actual speed of trade: Granular high frequency information on maritime shipping and container tracking, postal & air freight activities, collected & made available to LPI by several data partners. These KPIs are not yet included in the construction of main LPI indicators. 

Rankings in Logistics Performance Index 2023

  • India’s ranking improved by 6 places to reach 38th place on the Logistics Performance Index 2023 as compared to the last edition in 2018. 
  • Singapore was the best ranked country on the LPI 2023.

Definition of Logistics

  • Logistics is understood as a network of services that support physical movement of goods, trade across borders and commerce within borders.
  • It comprises transportation, warehousing, brokerage, express delivery, terminal operations and related data & information management. 

Reasons for India’s improvement in Logistics Performance Index

Since 2015, Government of India has invested in trade related soft and hard infrastructure connecting port gateways on both coasts to the economic poles in the hinterland. 

Enhancing  port productivity: Port productivity can be improved by increasing private sector participation in terminal operations, implementing electronic port community systems

Tracking & Tracing solutions: NICDC Logistics Data Services limited applied radio frequency identification tags to containers and offers consignees end-to-end tracking of their supply chain. With the introduction of cargo tracking, dwell-time in eastern Visakhapatnam port fell from 32.4 days to 5.3 days in 2019. On an average dwell time for containers came down to 2.6 days for India. 

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