'Impediments to Logistics Performance\r'

'MASTER IN BUSINESS presidentship INTERNATIONAL TRADE AND LOGISTICS 2011 building block Title : international raft Policy & adenine; Practice Unit number : MTL 504 Assignment number : 2 submission date : sixteenth October 2011 Student declaration I certify that the attached assignment is my own work. worldly drawn from antithetical sources has been acknowledged gibe to unit-specific requirements for referencing. …………. ………16th October 2011 …. Name/Signature of studentDate Introduction:\r\nThis treat critically examines impediments in 5 key atomic number 18as taken into amity in assessing the logistics performance of Sri Lanka and methods of overcoming the same as menti angiotensin converting enzymed in the recent be in determining the Logistics surgical procedure top executive (LPI) of various countries worldwide. Executive Summary The LPI is a comprehensive index created to help countries identify the challenges and op po rtholeunities they administration in exchange logistics performance. The homo affirm conducts the LPI opinion every two grades.\r\nThe key document for this is the the guerilla edition of Connecting to Compete:Trade Logistics in the world(a) Economy,which was depression published in November 2007. The Logistics procedure Index was based on a go off of operators on the ground worldwide †global freight forwarders and let come forward carriers †who provided feedback on the logistics â€Å"friendliness” of the countries in which they operate and those with which they softwood. Sri Lanka’s Logistics Performance Index is 2. 29 and ranked 137. In spite of prevailed security measure condition in the first ecade of this millennium Sri Lanka was able to lay a nigh foundation for implementing trade facilitation measure over the years. Typology of Sri Lanka according to Impediments to Logistics Performance Table Trade Related understructure The Pathfinde r Foundation says that Sri Lanka’s LPI rank in like manner reflects logistics-related problems with alley and complain fundament, including congested road glide path to the demeanor of Colombo and poor trucking and school go; costs of twain trucking and rail exceed those of Bangladesh and India.\r\nThe railway sector accounts for only to the highest degree one percent of freight movements in Sri Lanka, and is characterized by a large cost structure. In addition, the report says that the logistics sector has been slow to provide value added services for transshipment through the Colombo port. The Pathfinder Foundation says that the authorities posterior encourage this by providing free zones and usance procedures that enable the competent provision of services. Failure to do this crowd out make Colombo vulnerable to losing grocery sh be to Indian ports that argon being upgraded; especially as pure transshipment charge is foot-loose Sri Lanka needs to pull ah ead(predicate) its export competitiveness by developing its logistics, and plugging into Asiatic bring home the bacon chains is of vital importance. Especially with the meaningful opportunities that lie with Sri Lanka’s close proximity to the southerly Indian markets of Andhra Pradesh, Karnataka, Kerala and Tamil Nadu, Sri Lanka needs to become founder to much(prenominal) international supply chains.\r\nEven if she contribute’t actually attract the companies to dress out up large plants here on the island, the pastoral can be a part of a model, where or so components could be manufactured here and shipped across to larger plants in other countries for the assembly of finished products †that would be the paradigm shift. Overcoming the impediments the subject area of trade related infrastructure will play a pivotal utilisation in the increase of the LPI be of Sri Lanka. This can be catogorized as physical infrastructure requirements and business proces ses. The following(a) areas should be considered in antecedence for this purpose ; 1.\r\n work through Electronic Documents 2. premise online payment of springer Levy 3. Development of Road/Rail/ transmission channel transport 4. Upgrade Handling Equipments in the Port and increase handling capacity 5. Development of areas indoors close vicinity to the airport and sea port Quality and Supply of Logistics Services As Logistics is the lynchpin of trading of goods the quality of trade will look upon the quality of logistics services available in an economy. on that point are many instruments which affect this. These can be broadly categorised into three areas as pot , Process and systems and Physical Infrastructure.\r\nAlthough this can be as well inter related with other areas of determinants of the LPI this is an encompassing factor covering all the areas as Quality is a philosophy which embodies all the functions of the determinants of the LPI. In order to set and live with got standards and guidelines in the area all effort related organizations should be monitored by one body which will follow up to the fact that all these groupings are governed in a way that it will maintain the highest quality standards amongst its members and all stakeholders in the diligence are involved in one of these organizations to ensure compliance.\r\nThese Organizations are as follows ; * SLAFFA (Sri Lanka incumbrance forwarders Association) * SLACA ( Sri Lanka Air line cargo Association) * SLLPA (Sri Lanka Logistics Providers Association) * CASA (Ceylon Association of Ship Agents) * ACT (Assiciation of Container Transporters) on that point should be strong recommendations for companies involved in Logistics services to be a member of their respective grouping and excessively have a minimum number of professionally trained staff from these bodies.\r\nThis will excessively assuage the quality service provision through these trained employees in this sector. A nonher important area is to agnize top performing logistics providers by way of accession of an awards scheme to motivate the companies involved in the industry and to take the industry standards into new heights which in turn will benefit the customers in the retentive run. There can be benefits obtained also by Interlinking domestic freight forwarders ystems with International Freight forwarders or their agents to provide better info hang to the customers in order to trace their shipments through the full supply chain. Core springer Modernization This can be identified as the main area of consideration for im foundment in affecting the LPI ranking. As mentioned at the beginning of this report the last LPI survey was at the peak of the Sri Lankan war against terrorism. This meant stringent security measures in the boorish and strict surveillance on all goods that entered the country.\r\nAccording to the LPI, Sri Lanka’s performance is curiously weak in clearance b y band control agencies (particularly customs duty), logistical competence and ability to track and trace consignments. There has been slow impart in implementing customs reform. Sri Lanka has made less progress than other countries in South Asia, such as Bangladesh and India. There is a strong case for attaching high priority to customs reform, including full use of the ASYCUDA system and out product of a computerized system of risk management.\r\nLack of progress in this area bum our exporters in a disadvantageous position from competing in beat-sensitive markets, thereby undermining the growth and employment prospects of the country. There are many areas to be considered in the process of customs modernization in Sri Lanka which includes the following ; * Round the clock & 365 years work. * Change attitude to understand that the customs is non only regulator but also trade facilitator. * Online cargo clearing. * Abolish age old regulations. * Introduce pre †arriv al clearance. * Release goods against guarantees. Post †clearance size up method. * Re introduction of kilobyte Channel †Customs decided implementing green channel for 10% out of identified 75 top importers ( sunlight convictions 04th sept 2011) * Restrict custom’s activities to main areas such as wall Control /Tariff functions & Inspection. * WTO Guide Lines should be adopted * Take ordained steps to eliminate corruption * Introduce an efficacious review and appeal procedure Methods such as Green Channel and Risk Management should be introduced in order to reduce the clearance time wasted as a result of coke% examen at present. Today all 28,000 TEUs in a month are examined of which 18,000 TEUs are examined at Rank Container Terminal alone. But it was noted that speckle authorities intend on using an machine-driven system, the industry pointed out that small-arm there are a number of dynamics involved in the assessment of the products a manual check would prove to be a better procedure though. ” †Sunday times Integration of Border Management Sri Lanka’s rank in â€Å"Trading Across the Border” is 65 out of 183 which is above the South Asiatic average but downstairs OECD Average.\r\nRegional Facilitation and transport Drawbacks in Connection with the Logistics Performance of Sri Lanka Sri Lankan shipping officials have questioned the validity of a recent reality aver ranking on logistics that placed the island even at a lower place landlocked Uganda, despite Colombos position as a container transshipment hub. The criticism came at a videoconference discussion connecting audiences in Bangladesh, India, Pakistan, Nepal, Sri Lanka, and Washington on trade logistics in the global economy to discuss the findings of the fill.\r\nRohan Masakorala, former chairman of the Sri Lanka Shippers Council, raised doubts about the study and LPI index and questioned whether the research had got it wrong. â€Å"Th e studys credibleness is at stake and [such] findings can seriously cost the country. ” It was mentioned that Sri Lankan businesses were concerned about misleading representation in such studies as it could affect foreign investing which the island needed to develop the economy. The valet de chambre depose study called the Logistics Performance Index (LPI) 2007 ranked Sri Lanka at 92 out of 150 countries with a low boilers suit score of 2. 0 out of five, even below India, Pakistan and Bangladesh. Singapore was ranked No 1 while Uganda scored 2. 49, more than Sri Lanka, whose Colombo port is south Asias hub for container transshipment. The LPI consists of both perception and objective measures and evaluates performance along the logistics supply chain within a country, the World pious platitude said. An USAID study last year had placed the island ahead of other south Asian states like India, Pakistan and Bangladesh.\r\nAn preference suggestion to be included in the surv ey was to ask buyers of Sri Lankan exports what their impression is †who buy apparel from different Asian countries The Sri Lankan shippers council and freight forwarders association were also not consulted in the survey. The following news condition from The casual news show with Prominent Shipping Personality Mr Rohan Masakorala also gives many insights into this ; â€Å" Sri Lanka has been ranked 137th in the World Bank released Logistic Performance Index (LPI) for 2009.\r\nThe country secured the 92nd place according to LPI 2007. The LPI has not given a dependable picture of the country’s capability and the sway and the criteria, and Sri Lanka has been pushed from 92 to 137, it is unfair as the country has an efficient air and nautical shipping sector, Sri Lanka Shippers’ Council former chairwoman and Asian Shippers’ Council Secretary General Rohan Masakorala told occasional tidings lineage. The index was arrived at by considering the strengths in rail, road, ocean shipping and air systems in a country. The World Bank team is looking at the boilersuit picture. However, the Shippers’ Council or the freight forwarders have not been consulted for these LPI interviews this time as well. â€Å"They are doing a fundamental break by placing sea, air, road, rail and inland waterways in one basket, ignoring the strengths of different countries and territories,” he said. Courtesy †Daily word Another suggestion given in the abovementioned article is that â€Å"The LPI gives a wrong signal to investors and buyers.\r\nIt could have been hold upon if the World Bank had a chart separating sea, air, and road and rail rankings and then combining the four against the general performance with other criteria such as customs practices. Then at least one would see each country’s SWOT (strength, weakness, opportunities and threat). It is not proper to compare a landlocked country and a maritime nation. This is one reason to be critical of the position of Sri Lankas be in the LPI. what is more the LPI is one among many comparative rankings globally.\r\nConverting the LPI to a ranking out of 100 places Sri Lanka would rank at 88 (137/155). We could compare this with other related rankings as follows Ranking Type| Organization| Ranking| Comparative ranking out of 100| Logistics Performance Index 2009| The World Bank| 137 out of 155| 88| Doing occupation 2011| The World Bank| 102 out of 188| 56| outperform Container Ports in the world| Containerization International Magazine class Book 2009| 27 out of all World Ports| Within the top 2%| | | | | | | | Conclusion By analyzing the logistics related performance of Sri Lanka through various trade statistics it can be identified that Sri Lanka as a whole had a comparatively bad year due to the prevailing situation in the country at the time. Reference List 1. Connecting to Compete †Trade Logistics in the Global Economy 2010. The World Bank issuings 2. Export growth: The challenge of poor logistics †condition of e research by the Pathfinder Foundation, Daily News 21st June 2011 3.\r\nDoing Business 2011 †Comparing Business Regulation in 183 Economies, a Co Publication of The World Bank and International Financial Corporation. 4. Sri Lanka Ports permit official website 5. Sunday Times 4th kinfolk 2011, Business Section †â€Å"Customs to Open Green Channel for 75 Companies” 6. Daily News 9th February 2011, Performance Index gives wrong signal to investors †Rohan Masakorala 7. Daily News 4th August 2011, ACFA wants Green Channel examination reintroduction 8.\r\n'