The World Bank s Logistics Performance Index (LPI) and drivers of logistics performance

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1 1 The World Bank s Logistics Performance Index (LPI) and drivers of logistics performance Lauri Ojala, University of Turku, Finland Dilay Çelebi, International Transport Forum Roundtable on Logistics Development Strategies and their Performance Measurement 9-10 March 2015, Queretaro MEXICO

2 Geographical location of Turkey 2

3 Billion USD Index value Turkey's Foreign Trade World Trade Index

4 4 Logistics Performance Index Customs Infrastructure Ease of arranging shipments Quality of logistics services Timeliness Tracking and tracing Connecting to Compete, Trade Logistics in the Global Economy World Bank (2014)

5 Turkey s logistics performance Customs Infrastructure Ease of arranging shipments Quality of logistics services Tracking and tracing 3.77 Timeliness

6 For every 10% increase in the LPI of a typical exporter, bilateral exports increase by more than 69%. For every 10% increase in the LPI of a typical importer, bilateral imports increase by 54%.

7 Trade impact of logistics performance The LPI Score of selected regions Europe & Central Asia Turkey Malaysia High income: OECD Germany

8 10 Trade impact of logistics performance The LPI Score of selected countries IMP +14% Europe & Central Asia EXP +18% Turkey Malaysia High income: OECD Germany ITF Secretariat based on LPI and Korinek & Soudin (2011), To What Extent Are High-Quality Logistics Services Trade Facilitating?, OECD.

9 11 Trade impact of logistics performance Logistics competence IMP +52% Europe & Central Asia EXP +154% Turkey Malaysia High income: OECD Germany ITF Secretariat based on LPI and Korinek & Soudin (2011), To What Extent Are High-Quality Logistics Services Trade Facilitating?, OECD.

10 Policy Actions Customs Infrastructure Ease of arranging shipments Quality of logistics services Timeliness Tracking and tracing Indicators Qualitative Quantitative

11 The efficiency of customs and border management clearance

12 hours Reduced variability of clearance times

13 hours Reduced variability of clearance times

14 Improvement of border facilities 38% decrease in export time variability from 2010 to % of customs transactions have been computerized. More than $200,000,000 is invested for modernization of border gates under BOT model.

15 The quality of trade and transport infrastructure

16 Construction of new transport links The percentage of road investment in GDP has almost doubled in the last 5 years, reaching up to 5.9 billion Euros in 2011 Road Investment as %GDP

17 Supporting dominant modes of transport International Trade by Mode of Transport Air 11% Other 10% Road 23% Sea 55% Rail 1%

18 Promoting low cost transportation modes diesel fuel accounts for over 60% of total freight costs More than 90% of semi-trailers are not craneable and cannot be loaded onto standard intermodal trains.

19 Drivers of Logistics Performance: Case Study Ease of Arranging Competitively Priced Shipments DEU USA ITA MYS CHN TUR ROM BGR AZE Score Rank

20 Quality of logistics services

21 Supporting logistics industry and private sector Competence and Quality of Services Consignees or shippers Trade and transport associations Quality/standards inspection agencies Customs agencies Freight forwarders Turkey Average UMI Europe & Central Asia Malaysia Germany

22 Drivers of Logistics Performance: Case Study Findings Ability to Track and Trace Consignments DEU USA ITA MYS CHN TUR ROM BGR AZE Score Rank

23 Promoting utilization of ICT in Logistics Services In the last couple of years, Turkey has experienced Increased utilization of computerized border clearance systems. Introduced e-government services and e-signatures to facilitate Improved telecommunications services to support logistics Encouraged development of CIT service providers to support the Promoted companies for utilization of state of the art tracking and Developed public information platforms for sharing trade and Strongly disagree Strongly agree

24 Timeliness of shipments in reaching destination Ease of arranging shipments

25 World Bank sources indicate that a one-day delay in delivery times causes a 1% decrease in the volume of trade Reducing transport network system vulnerability In 2012, 90 % of the trucks on Slovenia-Italy Ro-La lines had Turkish plate Trucks tend to have long waiting times at major Ro-La lines, even up to 4-6 days

26 Findings Variability is one of the main factors of efficiency of the customs and border clearance. Capacity management is vital for infrastructure efficiency. A superior transport infrastructure supports vital transport systems, including access roads to terminals and seaports, and intermodal services. A thriving private sector is one of the leading factors in providing high quality logistics services.

27 35 Lauri Ojala Turku School of Economics, Finland Rehtorinpellonkatu 3 FIN TURKU Lauri.ojala@utu.fi Dilay Çelebi İstanbul Technical University Faculty of Management Maçka, Turkey celebid@itu.edu.tr Roundtable on Logistics Development Strategies and their Performance Measurement 9-10 March 2015, Queretaro MEXICO