A DEA-Logistic Performance Index



A DEA-Logistic Performance Index

Authors

Leandro García, Universidad De Valencia, Luisa Martí, 2Universidad Politécnica De Valencia, Juan Carlos Martín, Universidad De Las Palmas De Gran Canaria

Description

The aim of this paper is to propose a data envelopment analysis (DEA) approach to compute a synthetic index of overall logistic performance (DEA-LPI).

Abstract

Logistics and transport increasingly play a pivotal role in international trade relations. The Logistics Performance Index (LPI) measures the on-the-ground efficiency of trade supply chains, or logistics performance. In the period 2007-2014, the World Bank has produced four different LPIs in the years 2007, 2010, 2012 and 2014. The LPI is built on the basis of a worldwide survey carried out on companies responsible for the transport of goods and for the facilitation of trade globally. The aggregate index is calculated by analysing six main components using the following indicators: (1) customs; (2) infrastructure; (3) international shipments; (4) logistics quality and competence; (5) tracking and tracing; and (6) timeliness. The 2014’s edition covers 160 countries. The aim of this paper is to propose a data envelopment analysis (DEA) approach to compute a synthetic index of overall logistic performance (DEA-LPI) and benchmark the logistic performance of the countries with LPI. Dealing with the six dimensions of LPI, the proposed approach uses DEA as a tool for multiple criteria decision making (MCDM). Since DEA measures the relative efficiency of decision making units (DMUs), in our case, one hundred sixty countries in the sample, and identifies a set of corresponding efficient DMUs called a reference set that can be used as benchmarks for improvement of inefficient DMUs, it is capable of providing clear guidelines for benchmarking of national logistic performance. A further analysis of the impact of each of the components in the DEA-LPI can be made. Furthermore, the paper will also analyse the potential differences observed using five world regions, name list Africa, South America, Far East, Middle East and Eastern Europe.
Keywords: Logistic performance; Freight transport; Data envelopment analysis (DEA); LPI; LPI components.

Publisher

Association for European Transport