World Bank names one country best in logistics
How software matters

World Bank names one country best in logistics

Germany has once again claimed the top spot in a World Bank report that measures a country’s logistics performance and ties it to economic growth.

Deutschland repeats as No. 1

For the second report in a row, Germany has taken the top spot in the World Bank’s biennial ranking of countries in logistics performance.

When measured against benchmarks like logistics competence and skills, the quality of trade-related infrastructure, and the price of international shipments, the World Bank gave Deutschland a 4.2 on a scale of 5. It was followed by Sweden, Belgium, Austria, and Japan. Only a handful of countries scored above 4.

‘’I think what this report does is provide an excellent indicator, though it is just one, of how easy it is to get goods into a country and then how easy it is to move those goods around and also what their IT capabilities are since it looks into areas like tracking and tracing,’’ said Geoff Taylor, General Manager of AEB’s operations in the UK.

Uwe Henning, Director of Business Development for International Customs at AEB, said Germany's location, quality of infrastructure, history in logistics, and technological leadership in the field, all played a role in the ranking.

''This what we do and we are very good at it,'' he said.

Image courtesy of World Bank Group
Image courtesy of World Bank Group

The bank’s report, Connecting to Compete, highlights a country’s logistics performance and ties it to their economic growth and competitiveness. It says, inefficient logistics raise the cost of doing business and reduce the potential for integration with global value chains. The toll, according to the bank, can be particularly heavy for developing countries trying to compete in the global marketplace.

“Logistics are the backbone of global trade,” said Caroline Freund, Director, Macroeconomics, Trade & Investment Global Practice at the bank. “As supply chains become more globally dispersed, the quality of a country’s logistics services can determine whether or not it can participate in the global economy.”

The report says Governments can use the LPI to better understand the link between logistics, trade, and growth, and what policies they can enact to globally compete.

''There are few indicators of a growing economy that are better than imports and exports,'' said Taylor. ''If imports and exports are going up so is your economy. They go hand-in-hand.''

Image courtesy of World Bank Group
Image courtesy of World Bank Group

How software can help

Mark Brannan, International Business Development Director at AEB, said the report underlines how companies that do business in countries that rank low in logistics performance can mitigate difficulties through the use of software that can soften the blow or even eliminate a problem.

‘’A company cannot do much to impact the state of a certain country. But they can do something to control their own circumstances,’’ said Brannan. ‘’For example, we have tracking and tracing software that will make it easy for them to manage where their goods are and recognize whether there will be any delays.’’

In fact, many of AEB's software solutions solve problems the report may have companies concerned with, depending on what countries they do business in and where those countries ranked with the World Bank. 

AEB’s customs management products feature end-to-end IT integration, smart automation, easy connections to customs brokers, and cross-enterprise collaboration.

Some key AEB software includes:

Monitoring & Alerting: It offers next-generation shipment tracking. You define the milestones in your supply chain and then get proactive alerts when delays or unplanned events occur.

Customs Broker Integration: Customs Broker Integration digitizes the collaboration with your customs brokers, saves costs, provides legal safeguards and, above all, accelerates the entire customs process.

Transport & Freight Management: This digitizes all operational processes in collaboration with your transport service providers, including consignment consolidation, order assignment, the creation of carrier-specific labels, and tracking and tracing of your shipments.

Image courtesy of World Bank Group
Image courtesy of World Bank Group

High and low performers

The World Bank report shows a clear gap between high-income and low-income countries in logistics performance. The score of high-income countries is 48% higher, on average, than low-income countries.

“Across the board, we have seen most countries investing in logistics-related reforms, especially in the areas of building infrastructure and facilitating trade,” explains Jean Francois-Arvis, Economist at the World Bank Group and report co-author. “Despite these efforts to modernize services, developing countries face many remaining challenges. This explains a persistent gap between high- and low-income countries in terms of logistics performance.”

But income, population, and even economic size were not the sole determinant of a country’s LPI score. Nations with access to sea ports or large international transportation hubs tended to do very well.

Sweden, the Netherlands, Singapore, and the United Kingdom were all in the top 10 and all are home to regional offices for AEB.

Ted Roth, General Manager of AEB Sweden, said Sweden's 2nd place spot can be attributed, in part, to its status as a country advancing global trade, including related technology.

‘’Sweden has made great improvements regarding last-mile delivery and is one the leading countries to explore fossil free trucks that are also self-driving,’’ he said.

Richard Groenendijk, General Manager at AEB Netherlands, said the Netherland’s position as a major global trader and its obvious geographic advantages also contribute to its score.  According to the bank, the Netherlands is the ninth largest export economy in the world, exporting $435 billion of goods each year.

''We have a natural port,'' said Groenendijk. "We can move a huge amount of cargo in and then move a huge amount out to any place in Europe.''

Surprisingly, the world’s two largest economies, the United States (14th) and China (12th), did not make the top 10 for logistics performance.

''That's a surprise when you look at it on paper,'' said Taylor. ''But it's not a surprise when you look at what has been going on. They are both protective of their own country's products.''

Image courtesy of World Bank Group
Image courtesy of World Bank Group

Some other interesting findings in the report included:

  • There is currently a labor shortage of logistics professionals in both developed and developing countries. Developed countries need more blue-collar workers, such as truck drivers, while developing countries seek more managerial-level workers.
  • More countries perceive cybersecurity threats a risk to logistics. However, while 78% of high-income countries have increased their preparedness, only 26% of low-income countries have done so.
  • Given that 23% of all energy-related CO2 emissions can be attributed to transport, the environmental sustainability of logistics is an important emerging trend. Strong performers in logistics are the most likely to seek eco-friendly shipping options.