Thursday, May 17, 2012

Logistics Performance Index: Nepal ranked 151 out of 155 countries in 2012

The latest LPI ranking shows that Nepal has the fifth worst logistics efficiency in the world. With a score of 2.04, it ranked 151 out of 155 countries in 2012. Chad, Haiti, Djibouti and Burundi have worse logistic performance than Nepal’s.

Compared to previous rankings, Nepal’s performance is sliding downward. In 2007 the ranking was 130 (out of 150 countries) with a score of 2.14 and in 2010 its ranking was 147 (out of 155 countries) with a score of 2.2.

[The three areas where there is improvement in score (but ranking is still low) are customs, infrastructure and logistics competence. Customs clearance time has improved by half a day, and clearance and delivery of exports are to traders’ satisfaction. While the quality of airports, roads, rail and warehousing infrastructure is pathetic, telecommunication/IT has improved with less traders and freight forwarders (29%) indicating it as an issue. The satisfaction with competence and quality of services is average though this is an improvement. That being said, performance on all other indicators is pathetic.]

The ranking in timeliness of shipments in reaching destination within the scheduled or expected delivery is 153 out of 155 countries. The ranking in the ease of arranging competitively priced shipments is 151. The ranking in infrastructure and tracking & tracing is 149.

LPI 2012 Nepal
LPI Rank 151
Score 2.04
Customs Rank 125
Score 2.2
Infrastructure Rank 149
Score 1.87
International shipments Rank 151
Score 1.86
Logistics competence Rank 146
Score 2.12
Tracking & tracing Rank 149
Score 1.95
Timeliness Rank 153
Score 2.21

Nepal has the worst logistics performance ranking in South Asia. Between LPI 2010 and LPI 2012, all countries in South Asia have improved logistics performance ranking except Nepal. India is ranked 46 out of 155 countries, followed by Pakistan at 71, Sri Lanka at 81, Maldives at 104, Bhutan at 107 and Afghanistan at 135.

Logistics Performance Index ranking (out of 155 countries)


LPI Rank LPI Score LPI Rank LPI Score
2012 2010










Sri Lanka

























In South Asia, Nepal has the highest lead time (days) for export via port or airport and land (6 days and 7 days respectively). Lead time is the amount of time between the placing of an order and the receipt of the goods ordered. Similar is the case with import lead time. The number of agencies for export and import (5 each) is the highest in South Asia. Furthermore, the documents required for both exports and imports (6 and 5 respectively) is also the highest in South Asia. Export cost via airport and land supply chains (US$1831 and US$1651) is also the highest in South Asia. Similarly, import cost via airport and land supply chains (US$1957 and US$2322 respectively) is also the highest in South Asia.

Better logistics mean better economic competitiveness and trade performance. It also helps in lowering food prices as “transport and logistics directly affect the price and local availability of food through the performance and resilience of food chains.” The study shows that in developing countries, particularly in landlocked and poor ones, transport and logistics account for 20-60 percent of delivered food prices. The efficiency of a country’s supply chain depends on logistics performance.

High income economies dominate the top logistics rankings, while the economies with the worst performance are least developed countries that are also often landlocked, small islands, or post-conflict states.

So, what is so special about logistics in the top performers? Well, all top performers have developed and maintained a strong public-private partnership and dialogue; good cooperation between policymakers, practitioners, administrators and academics; and a comprehensive approach in the development of transport services, infrastructure and efficient logistics.

The Logistics Performance Index is based on a worldwide survey of operators on the ground (global freight forwarders and express carriers), providing feedback on the logistics “friendliness” of the countries in which they operate and those with which they trade. The ratings are based on 6,000 individual country assessments by nearly 1,000 international freight forwarders, who rated the eight foreign countries their company serves most frequently. It is the weighted average of the country scores on the six key dimensions:

  • Efficiency of the clearance process (i.e., speed, simplicity and predictability of formalities) by border control agencies, including customs
  • Quality of trade and transport related infrastructure (e.g., ports, railroads, roads, information technology)
  • Ease of arranging competitively priced shipments
  • Competence and quality of logistics services (e.g., transport operators, customs brokers)
  • Ability to track and trace consignments
  • Timeliness of shipments in reaching destination within the scheduled or expected delivery time.