UAE ranks among top 12 countries in World Bank’s Logistics Performance Index, driven by digitalization and sustainable practices
The United Arab Emirates (UAE) has been ranked among the top 12 countries in the World Bank’s Logistics Performance Index (LPI) for 2023. The LPI measures countries’ ability to move goods across borders with speed and reliability, covering 139 nations. The adoption of digital technologies in supply chains, particularly in emerging economies, can reduce delays at ports by up to 70% compared to those in developed nations, according to the report. Opting for environmentally sustainable logistics options can also help keep trade flowing by shifting to less carbon-intensive freight and more energy-efficient warehousing, the report added.
The demand for green logistics is on the rise, with 75% of shippers seeking environmentally friendly options when exporting goods to high-income countries. The top 12 scorers on the LPI are high-income economies, with Singapore at the top of the list with a score of 4.3, a position it has held since 2007 and 2012. Of the top 12 scorers, eight are in Europe, while the UAE, Canada and Hong Kong also ranked among the top 12, all on a score of 4.0.
Policies that can help improve reliability include improving clearance processes, investing in infrastructure, adopting digital technologies and incentivising environmentally sustainable logistics, the World Bank said. The average dwell time for containers spent in ports between May and October last year was three days for India and Singapore, four days for the UAE and South Africa, seven days for the US and 10 for Germany. Emerging economies tend to have shorter port delays than industrialised economies, possibly because of the lingering effects of the 2021-22 supply chain crisis and the leapfrogging of richer economies in port productivity and digitalisation of end-to-end supply chains, the report found.
The Covid-19 pandemic-induced disruptions to shipping and the resulting global supply chain crisis have created a challenging operating environment for companies. Disruptions of global value chains have underscored the crucial importance of logistics systems, with supply chain resilience and its related national security implications emerging as top concerns for governments.
Logistics services were “broadly resilient” for both the top performers and bottom performers in the Logistics Performance Index, despite a more challenging operating environment, the World Bank said. The bottom 10 scorers were mostly low- and lower-middle-income countries. They are either fragile economies affected by armed conflict, natural disasters and political unrest, or landlocked countries challenged by geography or economies of scale in connecting to global supply chains. Afghanistan and Libya had the lowest score (1.9), followed by Somalia (2.0) and Angola, Cameroon and Haiti (2.1).
In conclusion, the Logistics Performance Index helps developing countries identify where improvements can be made to boost competitiveness. The World Bank recommended that policies should be implemented to improve port productivity, modernise customs and use new technologies to enhance supply chain reliability.
