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How do you measure and improve the logistics performance index of your country or region?

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Logistics performance index (LPI) is a tool that measures how efficiently and effectively a country or region can move goods across borders and within its territory. It is based on six dimensions: customs, infrastructure, international shipments, logistics quality and competence, tracking and tracing, and timeliness. The LPI can help you identify the strengths and weaknesses of your logistics system, benchmark your performance against other countries or regions, and design strategies to improve your competitiveness and resilience. In this article, you will learn how to measure and improve the LPI of your country or region.

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Douglas Souza

Logística | E-commerce | Fulfillment
Tam Nguyen

Expand To USA And SEA Seamlessly | Help 500+ Biz Save Money From Making Costly Shipping Mistakes |2nd Gen Family…

1 Why is LPI important?

The LPI is important because it reflects the quality and efficiency of your logistics system, which affects your trade performance, economic growth, and social development. A high LPI score means that you can move goods faster, cheaper, and more reliably, which gives you an edge over your competitors and increases your market access. A low LPI score means that you face higher costs, delays, and risks, which reduces your trade potential and attractiveness. The LPI also helps you monitor your progress and impact of your reforms and investments in logistics.

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Douglas Souza

Logística | E-commerce | Fulfillment
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Entender a importancia do índice de Desempenho Logístico (LPI) é o primeiro passo para medir e melhorar seu país ou regi?o. O LPI é uma medida chave que avalia a eficiência, confiabilidade, pontualidade e custo-efetividade dos servi?os logísticos em uma determinada área. Ele influencia diretamente a competitividade econ?mica e o desenvolvimento de negócios.

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Tam Nguyen

Expand To USA And SEA Seamlessly | Help 500+ Biz Save Money From Making Costly Shipping Mistakes |2nd Gen Family Business | Podcast Host | Speaker | Author
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Another valuable indicator is the ratio of logistics costs to national GDP. A higher logistics cost relative to GDP signifies a less efficient logistics system. For instance, Vietnam's logistics costs account for approximately 20% of its GDP, whereas Germany, boasting one of the world's most effective logistics infrastructures, has logistics costs around 7% of its GDP. This stark contrast underscores the importance of efficient logistics systems in economic performance.

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2 How to measure LPI?

The LPI is calculated by the World Bank every two years based on a survey of logistics professionals who rate the performance of their countries or regions on a scale of 1 to 5 for each dimension. The survey covers over 160 countries or regions and collects data on both domestic and international logistics. The LPI is the weighted average of the six dimension scores, with higher scores indicating better performance. You can access the LPI data and rankings on the World Bank website or download the LPI app.

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Douglas Souza

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Medir o LPI envolve coletar dados em várias áreas-chave, como infraestrutura logística, eficiência dos processos alfandegários, qualidade dos servi?os de transporte e competência dos servi?os de rastreamento e monitoramento. Estes dados s?o ent?o analisados e comparados com os padr?es internacionais para determinar a posi??o do país ou regi?o no ranking do LPI.

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3 How to improve LPI?

In order to improve the LPI, a comprehensive and coordinated approach is required to address the multiple factors impacting your logistics system. Simplifying and harmonizing customs procedures and regulations can reduce the time and cost of clearing goods at the border. Investing in transport infrastructure, diversifying international shipment options, and optimizing shipment modes can all enhance the connectivity, reliability, flexibility, and affordability of your logistics network. Additionally, investing in human resources, technology, and innovation to strengthen logistics quality and competence can improve the skills and standards of your logistics providers. Furthermore, adopting digital platforms and tools to enhance tracking and tracing capabilities can increase visibility and security of cargo movements. Finally, reducing variability and uncertainty of logistics operations can help improve timeliness in delivery times.

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Douglas Souza

Logística | E-commerce | Fulfillment
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Melhorar o LPI requer uma abordagem multifacetada que envolve investimentos em infraestrutura, moderniza??o dos processos alfandegários, treinamento de pessoal, implementa??o de tecnologias de rastreamento e monitoramento, e colabora??o com parceiros comerciais para facilitar o comércio internacional. Além disso, é importante abordar quest?es como transparência, integridade e eficiência na gest?o logística.

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Tam Nguyen

Expand To USA And SEA Seamlessly | Help 500+ Biz Save Money From Making Costly Shipping Mistakes |2nd Gen Family Business | Podcast Host | Speaker | Author
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Improving Logistics Performance Index (LPI) demands collaboration not just from logistics partners, but also governments. Investing in infrastructure with a forward-looking approach, projecting demand 20-30 years ahead, leads to superior roads and expedited customs processes. For instance, Singapore's customs clearance averaging 1 minute per shipment has propelled it as a leading port in Asia. Additionally, investing in skilled human resources is vital. Higher-quality talents enable the adoption of advanced technology, improve tracking and tracing capabilities, and ultimately drive down logistics costs.

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4 How to monitor LPI?

Monitoring the LPI is essential to evaluate your performance, identify your gaps, and track your progress. To do this, you can compare your LPI score and ranking with other countries or regions of similar characteristics, analyze your score and ranking by dimension to understand strengths and weaknesses, review changes and trends over time to assess the impact of reforms and investments in logistics, and solicit feedback from logistics stakeholders and users to validate and complement your LPI data and insights.

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Douglas Souza

Logística | E-commerce | Fulfillment
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O monitoramento contínuo do LPI é essencial para acompanhar o progresso ao longo do tempo e identificar áreas que precisam de melhoria. Isso pode ser feito através da coleta regular de dados, realiza??o de pesquisas e avalia??es, e análise dos resultados para identificar tendências e padr?es.

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5 How to learn from LPI?

Learning from the LPI is essential to leverage opportunities, overcome challenges, and increase competitiveness and resilience. To do so, you can access the LPI reports and publications which provide detailed analyses and recommendations on global and regional trends and issues in logistics performance. Additionally, joining the LPI community of practice connects you with logistics experts and practitioners who share their knowledge and experience on best practices and lessons learned in logistics. Furthermore, participating in the LPI events and webinars provides a platform to exchange ideas and views on the latest developments and innovations in logistics.

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Douglas Souza

Logística | E-commerce | Fulfillment
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Aprender com o LPI envolve n?o apenas identificar áreas de melhoria, mas também estudar as melhores práticas de países ou regi?es com desempenho superior no índice. Isso pode envolver benchmarking, troca de experiências e colabora??o com especialistas e institui??es internacionais para implementar estratégias comprovadas de melhoria logística.

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6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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Douglas Souza

Logística | E-commerce | Fulfillment
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Além das medidas específicas para medir e melhorar o LPI, é importante considerar o contexto econ?mico, político e social do país ou regi?o, bem como as necessidades e expectativas dos stakeholders envolvidos na cadeia logística. Um enfoque holístico e colaborativo é essencial para alcan?ar melhorias sustentáveis no desempenho logístico.

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How do you measure and improve the logistics performance index of your country or region?

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1 Why is LPI important?

2 How to measure LPI?

3 How to improve LPI?

4 How to monitor LPI?

5 How to learn from LPI?

6 Here’s what else to consider

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