Economic and trade growth require an efficient logistics system, which comprises a series of essential activities, from transport,
storage spaces and cross-border authorizations to freight distribution and payment systems which involve a variety of public and
private agents. For a global logistics, having a competitive network represents the backbone of international trade. Unfortunately,
however, compared to other developed countries, many emerging countries have not yet benefited from the advantages in productivity generated by a modern logistics system.
In recent years, improving logistics performance has become a major development objective, because it has a great impact on the economic activity. Therefore, having an increased performance is strongly associated with trade growth, export diversification, the ability to attract direct investments and economic growth. In other words, “trade logistics matters”, concludes an analysis developed by the World Bank (Logistics Performance Index-LPI), a study performed on 1.000 freight forwarders, comparing the logistics sector in 155 states.
The activities undertaken by logistics operators depend on the state of the infrastructure, the procedures related to the commercial activity and the support provided on the trade service market. Therefore, international companies are trying to implement projects which comply with international standards in order to identify whether the level of services they could obtain depends on local conditions. Trade and transport development is essential for countries in terms of competition on the global market: trade agents should be able to carry their assets and services across borders on time and with reduced costs.
The Logistics Performance Index depends directly on the economic results, export diversification and growth rate. In this context, the countries that want to improve their logistics performance index should implement a reform and modernisation process for cross-border management institutions, change their transport policies and make massive investments in the infrastructure which is necessary for an efficient trade activity.
According to the analysis elaborated by the World Bank, the infrastructure, cross-border procedures and services are essential elements in the trade sector. As for the infrastructure or the logistics facilities (such as storage spaces etc.), they depend on the management quality and/or on public-private partnerships. Hence, the quality of the infrastructure is another constraint for emerging countries in terms of logistics performance index improvement. The companies which participated at this study (which develop activities in the air, railway, port or road sector) claim that the quality of the IT and telecommunications infrastructure is also extremely important for the supply of high-quality services.
From the point of view of the services, the quality and competency of freight forwarders tends to be significantly higher than in the case of the services provided. “There is a large connection between the quality of the services and the general logistics performance index compared to the infrastructure. In case of air and maritime transport, the respondents grant more importance to the services suppliers than to the infrastructure. However, in the case of railway transport, companies believe that both the infrastructure and the services provided have a significant role in quality improvement”.
The logistics performance index also incorporates the time necessary to finalize a commercial transaction and this depends directly on the cross-border procedures, especially in the case of imports. Hence, the sustained efforts in reforming cross-border management should focus on bureaucracy, especially in the countries where the logistics sector is under development. According to WB, companies believe that “the time necessary to declare goods is relatively small, compared to the physical inspection of the goods, which increases the time interval in case of imports.” In this context, reforming and modernising the cross-border administrative institutions is vital. The priorities related to trade logistics are set and applied at the level of every country. Hence, in recent years, reforming the transport sector has become a key factor for development, and the traditional efforts made to facilitate trade have focused on the support granted through infrastructure investments, modernisation of cross-border systems and the use of information technology. However, these efforts should also focus on the logistics service market and on coordinating cross-border procedures.
by Pamela Luică
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