What is logistics performance index? What is the LPI?

What is logistics performance index? What is the LPI? Let LEC Group experts know thoroughly about this issue now!

What is logistics performance index? What is the LPI?

Logistics performance index (abbreviated as LPI) is a national logistics capacity index, researched and published by the World Bank in a report called “Connecting to the competition - logistics industry in the economy”. global health ”.

Chỉ số LPI là gì?

If a country wants to improve its logistics industry. That country needs to carry out the modification and modernization of its border management institutes. In addition, it is also indispensable to change the policy provisions on transportation, additional investment in the relevant commercial infrastructure.

Vietnam ranked 48th in the world (LPI) based on the World Bank's 2014 rankings of logistics performance indexes. This is considered a relatively new and difficult field. The main reason is the economic resources from the state budget as well as the resources of enterprises.

Evaluation criteria in LPI index

Currently, there are 6 evaluation criteria in the LPI:

Infrastructure (infrastructure): the infrastructure related to the quality of commerce and transport (ports, railways, roads, information technology).
Competence logistics (competence logistics): capacity and quality of logistics services (transport operators, customs broker).
International shipments (shipments international): easy level when arranging for shipments with competitive prices.
Tracking & tracing: the ability to track & trace shipments.
Customs service (customs): is the effect of the goods clearance process. For example, speed, simplicity, and computation are in advance of other procedures.
Timeliness: timeliness of shipments arriving at their destination.

Chỉ số LPI là gì?

Currently, Vietnam has about 1300 businesses providing logistics services (transportation, forwarding, warehousing, loading and unloading of goods, port services, ...). However, these businesses are mainly concentrated in the city. Ho Chi Minh City (accounting for 70% of the total number of enterprises providing logistics services).

Most logistics service providers in Vietnam are small and medium-sized. Mainly acting as an agent for transnational logistics service providers. The scale of logistics centers is generally quite small, under 10ha and mainly serves a number of businesses in industrial parks or in a province or city. Not yet developed to a scale in an industry or an economic region.

Chỉ số LPI là gì?

In addition to the downside of scale as above. Logistics centers in Vietnam currently lack many specific services to create high added value for customers to use. On the other hand, the labor force in the logistics industry has not been well trained in specialized knowledge and skills.

Another disadvantage that cannot be ignored is the high cost of logistics services. However, the quality of service does not meet the requirements of customers.

According to the report supporting the Ministry of Transport to develop multimodal transport. LPI costs account for 20.9% of Vietnam's GDP. In particular, transportation costs account for about 60% of the total logistics costs of our country. These are considered as barriers to the development of our country's logistics service industry. In addition, our country's LPI index is still ineffective compared to other countries in the world and in the region. The main reason is the lack of trust throughout the supply chain connecting Vietnam and countries around the world.

Chỉ số LPI là gì?

The key problem is due to the inefficiencies in the technology and implementation of logistics activities. Including "lubrication" costs for transportation, asynchronous transportation infrastructure planning. Road transport does not meet the requirements of the owner and the port has not been fully exploited to its full potential.

Based on the analysis of barriers to logistics services in Vietnam. Along with the analysis of LPI index from LEC Group experts mentioned above. We fully realize that capital policies and solutions are needed to help businesses do logistics services. Besides, it is also recommended to provide solutions to encourage and create favorable conditions for enterprises of all economic sectors to invest in building and operating logistics centers. At the same time, developing the demand for logistics services from both sides of the state and enterprises.

If you are looking for a business providing logistics services, professional with reasonable prices. Please contact LEC Group today to receive the best support!

LEC GROUP

Head Office: Road 4, Phu My 1 Industrial Zone, Phu My Ward, Phu My Town, Ba Ria - Vung Tau, Vietnam.

Add: No. 28 Thao Dien Street, Thao Dien ward, District 2, Ho Chi Minh City, Viet Nam.

Hotline: (+84) 909 800 136 & (+84) 901 388 136.

Email: info@lecvietnam.com & thao.nguyen@lecvietnam.com

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