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Bridging the logistics gap in developing economies

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A new report by the World Bank Group (Connecting to Compete) reviewed by A1 Worldwide logistics has proven that Advanced economies remain the global leaders in trade logistics and management.

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A new report by the World Bank Group (Connecting to Compete) reviewed by A1 Worldwide logistics has proven that Advanced economies remain the global leaders in trade logistics and management.

Around the world, most advanced global countries have chased logistics-related transformations and investments to build their infrastructure, accelerate and facilitate transportation and trade, or grow or improve current services. Despite this positive progress, the sixth edition of Connecting to Compete paints a decidedly mixed picture. Advanced countries score, on average, 48% higher than lower-income nations when it comes to logistics performance and growth.

Caroline Freund, director of the macroeconomics, trade & investment global practice at the World Bank Group. Says this on the matter; “Logistics services are the backbone of international trade, Good logistics reduce trade costs, but supply chains are only as strong as their weakest link. For developing countries, getting logistics right means improving their infrastructure, customs, skills, and regulations.”

The World Bank Group’s “Connecting to Compete,” report contains the Logistics Performance Index (LPI), which is a bi-annual report that scores over 160 countries on how efficiently their respective supply chains connect local firms to domestic and international opportunities. The 2018 LPI points to emerging concerns like the resilience of supply chains, their growing environmental footprint, and the urgent need for qualified workers.

A1 Worldwide logistics knows that one of the most pressing concerns is a logistics labor shortage for both advanced and developing countries. Developing countries require large numbers of managerial-level workers, while developed nations face a dire shortage of blue-collar laborers, such as semi-truck drivers. High-income countries are 60% more likely than low-income nations to seek logistics options that are eco-friendly. Environment-friendly logistic options are essential because CO2 emissions from transportation are a substantial contributor to pollution. High-income countries are also more proactive than low-income nations when it comes to increasing their preparedness to potential cyber threats.

Out of all the country’s graded by the LPI, Germany has the highest aggregate score over the previous four LPI issues. Nations that are leading players in the supply chain have ranked highest in logistics performance. Countries that rank lowest tend to be those that are low-income, isolated, fragile or facing conflict political unrest. Among the more moderate to middle-income group countries, large economies such as India and Indonesia and developing economies such as Vietnam stand out as top performers.

“With international trade becoming more dispersed through global value chains, good logistics are more important than ever,” said Christina Wiederer, a World Bank Group economist and report co-author. “Small disruptions to a supply chain can spread rapidly to other countries and regions.

‘Connecting to Compete’ and its Logistics Performance Index help governments understand the link between logistics, trade, and growth, and what policies are necessary for success.”

The report and its Logistics Performance Index are tools created to help governments benchmark their progress on trade logistics across critical criteria, including the quality of trade-related infrastructure, the price of international shipments, logistics competence and quality, and the frequency with which shipments reach their destination on time.

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