Indonesia soars 17 levels in World Bank’s logistic performance index

• Indonesia’s position in the Logistic Performance Index (LPI) rose 17 levels within two years, ranking the country 46th out of 160 countries. The LPI is an index released by the World Bank every 2 years and it measures trade logistics performance within a country.
• In the 2018 edition report released on 24 Jul 18, the bank analyses 167 countries based on six indicators, namely the efficiency of customs and border management clearance, the quality of trade and transport-related infrastructure, the ease of arranging competitively priced international shipments, the competence and quality of logistics services, the ability to track and trace consignments, and the frequency with which shipments reach consignees within the scheduled or expected delivery time.
• Of all these indicators, Indonesia’s customs indicator scored the lowest with 2.67 points, positioned at 62nd from all surveyed countries. Indonesia’s highest score was in the timeliness indicator with 3.67 points at 41st position. It is noted that Indonesia has made progress in all 6 indicators, in line with the Indonesian government’s push for infrastructure development and other related matters, such as the improvement of dwell time in Indonesian ports (which has now fallen below four days).
• The report states that among the lower-middle income countries, large economies such as Indonesia, as well as emerging economies such as Vietnam stand out as top performers by showing a significant jump to a higher rank. Thailand, Vietnam and Malaysia all rank above Indonesia, with Vietnam overtaking Indonesia.
• This is a problem because weak connectivity causes relatively high logistics costs, thus implying that Indonesian products and services are not as competitive compared to its regional counterparts.

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