Pakistan Ranks Among the Worst in Logistic Performance Index

Pakistan is ranked at 95 among 167 countries on the aggregated Logistic Performance Index (LPI), trailing behind a number of Asian countries due to lack of spending on infrastructure projects including airports and highways.

India is at 35^th position while Sri Lanka stands at 92nd place in the list. Regional countries including Thailand, Vietnam, Indonesia, Malaysia, and the Philippines are far ahead of Pakistan, according to a report published by the State Bank of Pakistan.

Where’s CPEC?

Luckily, Pakistan’s performance on the infrastructure component of the LPI is likely to improve, particularly in the wake of CPEC-related development of roads, railways, and the Gwadar port. In addition, CPEC is also expected to boost the prospects of the shipping industry, and forward-thinking investors are reportedly keen to explore such opportunities.

Why Logistics Sector Holds Great Value?

A more concerted policy focus is required to tackle the shortcomings reflected in other LPI components. These can be viewed as a subset of the ease of doing business, and may thus be added to the agenda items that the country is looking to address in order to attract more FDI and boost exports.

The efficient logistics lie at the heart of competitiveness, both at the firm and country level. They enable firms to connect with domestic and international markets and affect a country’s prospects of integration within global value chains.

Logistics impact trade, job creation, and economic development. Given its importance, there is a need to track logistics performance and take corrective action as needed.

The Criteria

To this end, the World Bank’s LPI serves as a benchmarking tool that scores and ranks logistics performance. The index can be further categorized into 6 distinct components, namely:

1. International shipments: The ease of arranging competitively priced international shipments
2. Logistics competence: The competence and quality of logistics services
3. Infrastructure: The quality of trade and transport-related infrastructure (for example, ports, roads, railroads, information technology)
4. Customs: The efficiency of customs and border management
5. Timeliness: The frequency with which shipments reach consignees within the scheduled or the expected delivery time
6. Tracking and tracing: The ability to track and trace consignments

World Bank’s aggregated LPI 2012-2018 provides a composite, weighted score and ranking based on four surveys, which minimizes random variations across individual surveys and facilitates comparison across 167 countries.

Moreover, the six components reveal that Pakistan’s weaknesses are broad-based. In four out of six components, Pakistan’s ranking ranges between 100 and 112. In fact, the country ranks last on the ‘Tracking and tracing’ component compared to selected South Asian countries.