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Central Asia’s Logistics Performance
Results from the World Bank’s
Logistics Performance Index (LPI)
Ms. Marsha McGraw Olive
World Bank Country Manager for Tajikistan
September 9, 2013
Pillars of Logistics Performance
1. Infrastructure: Ports, road/rail links, dedicated
logistics facilities, airports
Key message:
2. Procedures (customs, payments etc.)
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Simplification, automation
Harmonization, standardization
Modernization and governance of border agencies
Enforcement capacities
3. Services: Forwarders, truckers, brokers etc.
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Regulation of entry
Market structure and competition
Competence and quality of service
Efficiency of
supply chains not
only depends on
infrastructure but
on the institutions
and processes of
trade (e.g.
customs) and the
quality of services
available for trade
+ New concerns such as supply chain security
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Current supply chain system in Central Asia
• The supply chain structure reflects the history and the
legacy of the Soviet Union (SU)
• Decomposition of SU meant that new institutions
had to manage borders; unified railway system
became fragmented
• Emergence of two professions: Freight forwarders
and customs representatives
• Numerous interventions in the supply chain, e.g.
obligation to go through bonded warehouses or use
of customer representatives in Kazakhstan
Key messages:
Break-up of SU has
created a system that
is non-conducive for
efficient logistics and
trade facilitation
Obstacles are
especially detrimental
to smaller landlocked
countries in Central
Asia that have to
trade in transit across
many borders.
One of the tools to assess countries’ logistics performance:
The World Bank’s Logistics Performance Index (LPI)
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What is the Logistics Performance Index (LPI) about?
Timeliness
The Supply Chain Framework
International shipments
Customs
Tracking and Tracing
Infrastructure
Delivery Alongside
Vessel
to Dock
Unloaded
on Dock
Point of Origin
Seller’s Factory
Services Quality
Exporting Country
Frontier/
Border
Delivered to
Buyer’s
Warehouse
Importing Country
LPI Methodology
The LPI measures 6 dimensions of country performance:
1.
Efficiency of the clearance process
2.
Quality of trade and transport infrastructure
3.
Ease of arranging competitively priced shipments
4.
Logistics competence and quality of logistics services
5.
Ability to track and trace consignments
6.
Timeliness of shipment delivery
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Built on more than 5,000 country assessments by over 1000 logistics
professionals worldwide
Primary data gathered for 155 countries
Source of data are suppliers of logistics services (freight forwarders,
express carriers)
Respondents rate logistics performance on a scale of 1 to 5
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Input and Outcome Indicators in the LPI
Source: World Bank, LPI: Connecting to Compete (2012)
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LPI 2012: Overall Results
Logistics friendly
Consistent performers
Partial performers
Logistics unfriendly
LPI 2012: Results for Central Asia
5
Kazakhstan
Key messages:
4.5
Uzbekistan
4
Score (1 to 5)
3.5
Kyrgyz
Republic
3
Tajikistan
2.5
2
OECD
countries
1.5
Upper middle
income
countries
1
Europe &
Central Asia
Region
0.5
0
LPI Score
Customs
Infrastructure International
Logistics
shipments competence
Source: worldbank.org/LPI. No 2012 data for Turkmenistan
Tracking &
tracing
Timeliness
Logistics
performance in
Central Asia
lagging behind
upper middle
income countries
and OECD
members
Kazakhstan a
good performer in
the region
2012 ranks: 86
(KZ), 117 (UZ),
130 (KG), 136
(TJ)
Logistics Performance Score by GNI per capital
Key message: Central Asian countries lag behind the most
developed countries but also Eastern Europe, Turkey + East Asia.
Facilitation and logistics bottlenecks are significant; countries tend
to lag behind in reforms.
Countries with a more European orientation tend to do better
(Ukraine, Georgia).
Source: Rastogi et al., based
on World Bank LPI and WDI
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Intraregional comparisons across LPI dimensions (2012)
Azerbaijan
4
3.5
3
2.5
2
1.5
1
0.5
0
Uzbekistan
Tajikistan
Key messages:
Institutional issues
are at least as
binding as
infrastructurerelated ones.
Belarus
China
Russian Federation
Georgia
Kyrgyz Republic
Kazakhstan
Institutional reforms
(e.g. in customs)
remain a high
priority despite
recent progress.
Affordability of
shipments and the
tracking indicators
tend to be lower in
smaller countries.
Customs
Infrastructure
International shipments
Logistics competence
Tracking & tracing
Timeliness
Source: www.worldbank.org/LPI
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Central Asian Supply Chain Performance
• Substantial fragmentation and vulnerability of existing supply
chains
• Very few companies operate as truly integrated logistics
providers (3PL)
• Logistics operators cannot or are not
incentivized to integrate trade and
customs processing with transportation
and other logistics activities. This
introduces additional steps and
ruptures to the supply chain.
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Infrastructure and Institutions
Existing transport infrastructure does not appear as the main
binding constraint for existing trade flows:
• Transportation costs or delays on average are in line with other
countries.
Institutional issues are more of a concern:
• Low reliability of supply chains acts as a main constraint to
businesses due to excessive fragmentation in design and
services. Companies face challenging condition of operation with
long replenishment cycles, big inventories, and losses.
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Sources of Fragmentation
•
Lack of coordination and integration: With legacy systems of bonded
warehouses, shippers deal separately with freight forwarders, brokers, truckers;
small presence of international freight forwarders
•
Discontinuity in transit supply chains: Limited ability to trace goods in transit;
low predictability of railway delivery of wagons and containers
•
Operational constraints: Dispersed terminal and rail yard layout, need to
undergo a long series of logistics operations (e.g. cross-docking, successive
marshaling to a freight train)
•
Domestic trucking and other services are not up to international standards
•
Remaining trade facilitation constraints for final clearance and transit,
largely coming from legacy of the the bonded warehouse clearance system
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Outlook: LPI 2014
The next LPI Report will be published in February 2014
The next LPI Survey will run from late September to November 2013
The LPI team is especially interested in survey participants (freight
forwarders) from Central Asia!
 If you receive a survey invitation, please help us by filling it out
 For representatives from industry associations: Please help us
spread the word by forwarding our invite to your member companies
Questions on the LPI or how to get involved?
Email the LPI team at [email protected]
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