Logistics is the lifeblood of international trade, and conversely, trade is a powerful driver of economic growth and poverty reduction, according to representatives from the World Bank.
The World Bank has recently released the report "Logistics Performance Index 2023 - Measuring Cross-Border Trade Logistics" (LPI). The report comes after three years of supply chain disruptions caused by the Covid-19 pandemic, which interrupted the transportation process. LPI 2023 surveyed 139 countries on the ease of establishing reliable supply chains. Additionally, the bank assessed structural factors that enhance the quality of logistics services, trade and transportation-related infrastructure, and border control measures of the countries.
Mona Haddad, Global Director for Trade, Investment, and Competitiveness at the World Bank, stated: "Logistics is the lifeblood of international trade, and conversely, trade is a powerful driver for economic growth and poverty reduction. Therefore, our 'Logistics Performance Index' report will help developing countries identify areas for improvement to enhance their competitiveness."
Logistics, also known as the transportation and management system of goods, contributes not only to efficient and safe goods transportation but also ensures seamless connectivity among various parts of the export process.
An economy can only develop harmoniously and smoothly if the logistics chain operates continuously. Hence, the role of logistics in the economy is increasingly being recognized. Logistics has become a driving factor for the flow of economic transactions and is a crucial activity for most types of goods and services.
According to the report, the average transit time for a container on all potential international trade routes is 44 days, with a standard deviation of 10.5 days. This time frame accounts for 60% of the time required to complete international trade transactions. The process of fully digitizing the supply chain, particularly in emerging economies, enables countries to shorten port delays by up to 70% compared to developed countries. Furthermore, the demand for sustainable logistics is increasing, with 75% of product manufacturing units seeking environmentally friendly options, especially when exporting to high-income countries.
"The greatest delays in transportation usually occur at seaports, airports, and multi-modal facilities," according to Christina Wiederer, Senior Economist at the World Bank's Macroeconomics, Trade, and Investment Global Practice, and co-author of the report.
To mitigate this issue, agencies and businesses need to implement policies such as improving customs procedures, investing in infrastructure, adopting digital technology, and promoting sustainable logistics. For sustainable logistics, cargo transport units need to transition to low-carbon transportation methods and manage warehouses in an energy-efficient manner.
Cre: vnexpress
