World Bank report shows disparities in global trade logistics

Industry News | | MIC Customs Solutions |

Gaps exist between rich and poor nations when it comes to logistics performance and trade, according to a new report.

There are still disparities between developed and developing nations when it comes to trade logistics, a new report from the World Bank has shown.

The Connecting to Compete document found that most countries across the globe have now pursued reforms and investments related to logistics in order to improve infrastructure, develop modern services and, ultimately, facilitate transport and trade.

However, the most advanced economies remain the global leaders in trade logistics, the report showed. Indeed, the highest-income countries scored, on average, 48 per cent higher than the lowest-income nations when it came to logistics performance.

World Bank Group spokesperson Caroline Freund explained that 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 regulation," she added.

The Connecting to Compete report includes a Logistics Performance Index (LPI) and 2018's ratings highlighted global concerns with the resilience of supply chains, environmental footprints and the availability of labor.

High-income countries were most likely to be looking for logistics services that are environmentally-friendly. They were also more likely than low-income nations to be preparing for cyber attacks, perhaps including seeking out new measures of protecting their customs data.

Germany had the highest aggregate score over the past four LPI releases, while - unsurprisingly - the lowest scores were registered for countries that are isolated and facing conflict or unrest, particularly if they are also low-income.

Interestingly, labor shortages were found to be posing a challenge for both developed and developing nations. The former are facing a shortage of blue-collar workers such as truck drivers, while the latter are in need of managerial level workers, the report discovered.

Co-author of the document and World Bank Group economist Christina Wiederer said: "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."

Earlier this year, the Organisation for Economic Co-operation and Development found that trade among G20 nations increased for the eighth consecutive quarter in the opening three months of 2018, with exports up by 5.3 per cent and imports rising by 5.8 per cent.