Feb 3, 2010 8:00 AM AWST

Vietnam logistics improve according to World Bank

Vietnam has been ranked among the top developing economies with significant performance in logistics that transcends the level of per capita income.

In its latest study, the World Bank noted that many countries perform better than what their income level would suggest.

The 10 most significant over-performers include China (27), India (47), Uganda (66), Vietnam (53), Thailand (35), the Philippines (44), and South Africa (28).

Improvements can be seen in customs, infrastructure, international shipments, logistics quality and competence, tracking and tracing and timeliness.

The capacity of countries to efficiently move goods and connect manufacturers and consumers with international markets is improving around the world, but much more progress is needed to spur faster economic growth and help firms benefit from trade recovery, according to a new World Bank survey on trade logistics.

Germany is the top performer among the 155 economies ranked in the Logistics Performance Indicators (LPI), which are included in the report Connecting to Compete 2010: Trade Logistics in the Global Economy.

The study was based on the most comprehensive world survey of international freight forwarders and express carriers.

"Economic competitiveness is relentlessly driving countries to strengthen performance, and improving trade logistics is a smart way to deliver more efficiencies, lower costs and added economic growth," said World Bank Group President Robert B. Zoellick.

"Streamlining the connections among markets, manufacturers, farmers and consumers offers tremendous growth and investment opportunities and should be a top focus for developing country growth strategies."

According to the LPI, high income economies dominate the top logistics rankings, with most of them occupying important places in global and regional supply chains.

By contrast, the ten lowest performing countries are almost all from the low and lower income groups.

Although the study shows a substantial "logistics gap" between rich countries and most developing countries, it finds positive trends in some areas essential to logistics performance and trade.

Some of them include the modernization of customs, use of information technology, and development of private logistics services.

"Following our first survey in 2007, many developing countries have improved their capacity to connect to international markets, which is a key ingredient for competitiveness and economic growth," said Otaviano Canuto, World Bank Vice President for Poverty Reduction and Economic Management.

"But if developing countries want to come out of the crisis in a stronger and more competitive position, they need to invest in better trade logistics."

"Countries with better logistics performance can grow faster, become more competitive and increase their level of investment," said Bernard Hoekman, World Bank Trade Department Director.

"Our research shows that increasing logistics performance in low income countries to the middle-income average could boost trade by around 15 per cent and benefit all firms and consumers through lower prices and better quality services."

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