PH leaps 17 places in 2023 WB logistics index

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PH leaps 17 places in 2023 WB logistics index
Image by Gerd Altmann from Pixabay
  • The Philippines leaps 17 notches to 43rd place out of 139 economies in the World Bank Logistics Performance Index (LPI) 2023
  • The country posted an index of 3.3 this year, an improvement from 2.9 in the last report in 2018
  • It recorded improvements in five of the six LPI criteria, with timeliness improving the most
  • In the international shipment criteria, the Philippines dropped 10 places
  • Singapore dislodged Germany in the overall ranking, back at the top with a score of 4.3
  • End-to-end supply chain digitalization, especially in emerging economies, is allowing countries to shorten port delays by up to 70% compared to those in developed countries while demand for green logistics is rising

The Philippines leaped 17 points to 43rd place out of 139 economies in the latest World Bank (WB) Logistics Performance Index (LPI) 2023.

In the seventh edition of the LPI report entitled “Connecting to Compete: Trade Logistics in the Global Economy,” the Philippines scored an index of 3.3 this year, an improvement from 2.9 in the last report in 2018.

Singapore dislodged Germany in the overall ranking and is back at the top after three editions with a score of 4.3.

The latest LPI comes after three years of unprecedented supply chain disruptions during the COVID-19 pandemic, when delivery times soared.

The 2023 edition includes an extended dataset consisting of the survey-based LPI and new key performance indicators (KPI) measuring the actual speed of trade around the world.

The report ranks countries based on key criteria of logistics performance, including border clearance efficiency (customs), infrastructure quality, timeliness of shipments, ease of arranging competitively priced international shipments, competence and quality of logistics services, and ability to track and trace consignments, assessed at the country level on a 5-point scale.

WB global director for trade, investment, and competitiveness Mona Haddad in a statement said the LPI “helps developing countries identify where improvements can be made to boost competitiveness.”

Timeliness

The Philippines improved the most in timeliness, ranking 49th with an index of 3.3 from 100th place in 2018 with a score of 2.98; and in tracking and tracing at 21st place with a index of 3.9 in 2023 from 57th previously with 3.06.

In the criteria of border clearance efficiency, the Philippines likewise rose to 59th place (2.8 index) from 85th in 2018 (2.53).

The country climbed to 47th place in infrastructure quality with a score of 3.2 in 2023 from the previous 67th place with 2.73.

With an index of 3.3 in logistics competence, the Philippines jumped to 46th place in 2023 from 69th place with a score of 2.78.

In the criteria of international shipments, the country performed sub-par from the last report, dropping 10 ranks to 47th place with an index of 3.1 from 37th with 3.29 previously.

New KPI

The 2023 report also provides new KPI derived from large global tracking datasets or big data covering shipping containers, air cargo, and parcels. These big data were sourced from MDS Transmodal, Cargo iQ, Universal Postal Union, TradeLens, and Marine Traffic.

The Philippines’ shipment tracking data are as follows:

• Turnaround time at port (2022) – one day (median), 1.3 days (mean)

• Import consolidated dwell time (May-October 2022) – 6.4 days (median), 5 days (mean); port dwell time – 6.2 days (median), 4.9 days (mean)

• Export consolidated dwell time (May-December 2022) – 4.7 days (median), 3.3 days (mean); port dwell time – 4.6 days (median), 3.2 days (mean)

• Aviation import dwell time (time from advisory to the consignee of the freight’s arrival to delivery, second quarter 2022) – 2.9 days (median), 2.4 days (mean)

• Delivery time for postal parcels (2019) – 18.9 days (median), 13.7 days (mean)  

According to the latest LPI, end-to-end supply chain digitalization, especially in emerging economies, is allowing countries to shorten port delays by up to 70% compared to those in developed countries. Moreover, demand for green logistics is rising, with 75% of shippers looking for environmentally friendly options when exporting to high income countries.

“While most time is spent in shipping, the biggest delays occur at seaports, airports, and multimodal facilities. Policies targeting these facilities can help improve reliability,” said Christina Wiederer, Senior Economist with the World Bank Group’s Macroeconomics, Trade & Investment Global Practice and the report’s co-author.

On average across all potential trade routes, 44 days elapse from the time a container enters the port of the exporting country until it leaves the destination port, with a standard deviation of 10.5 days.

That span represents 60% of the time it takes to trade goods internationally, WB noted.

Apart from Singapore, economies in the top 10, which comprised high-income economies, are Finland, Denmark, Germany, Netherlands, Switzerland, Austria, Belgium, Canada and Hong Kong.

The bottom 10 scorers, on the other hand, are mostly low- and lower-middle-income countries and are either fragile economies affected by armed conflict, natural disasters, political unrest, or landlocked countries challenged by geography or economies of scale in connecting to global supply chains. Afghanistan and Libya have the lowest score, followed by Somalia, Angola, Cameroon, and Haiti. – Roumina Pablo