6. Frequency with which shipments reach the consignee within the scheduled or expected delivery time <mark>Respondents rate up to eight countries along those six dimensions. The countries are selected according to the country of operation of the respondent. The country selection engine combines randomness and trade patterns. The LPI tells how easy (perceived) it is to establish efficient and reliable connections between trading countries. Conceptually, the LPI is a revealed supply chain accessibility metric. The LPI expanded on the concept of logistic friendliness introduced by Daley and Murphy [1999]. These authors were measuring through surveys the attractiveness of cities in the United States, as regional hubs of logistics activities.</mark> <mark>The choice of a survey-based instrument was in part dictated by necessity. When the LPI was created, "hard" supply chain data was scarce, and hardly comparable across economies. Initially, the LPI survey covered lead time to trade or in customs for different modes, with focus on the respondent’s country of operation. Yet the dispersion of results for a given country was higher than the perception-based LPI, and global surveys were found inadequate to measure lead time or delays. The LPI survey was discontinued after the 2023 edition to focus on more general attributes of logistics.</mark> <mark>The Logistics Performance Index (LPI) is the primary supply chain benchmark for policymakers and has motivated reforms since 2007. The LPI has been used as a component indicator in several high-level dashboards including the Sustainable Development Goals or those of the World Economic Forum.</mark><sup>5</sup>

# <mark>Moving towards Big Data</mark>

<mark>The perception-based approach had shortcomings. L</mark> PI scores reflect a quantification of qualitative perceptions on an ordinal scale and are thus subject to noise. Sampling is nonrandom since respondents choose whether to participate, possibly leading to selection bias. This creates difficulties when comparing small changes between countries and within countries over time. An additional issue relates to year-on-year comparisons, which suffer from the limitation that respondents grade performance on a qualitative scale that could be affected by indexing issues, meaning that respondents’ standards of what constitutes “high” or “low” efficiency and quality of logistics services can differ. In <mark>each edition, several countries could not be featured in the LPI as too few assessments from logistics service providers based outside the country in question were obtained. Survey fatigue was a growing issue.</mark> <mark>In recent years, supply chain data has changed from scarce to abundant. Digitalization of supply chains expanded swiftly. Shipments are tracked from origin to destination in many industries and across borders. This has been driven by the rapid digitalization of logistics processes (e.g., Internet of Things) and the growing need for traceability, in parallel with the fast pace of automation in public agencies (e.g., port community system, customs automation). Consequently, global datasets are available, albeit mode-specific.</mark> The 2023 edition introduces quantitative key performance indicators (KPIs), based on shipment tracking datasets, measuring the speed of trade around the world. The KPIs are derived from millions of international movements of containers, aviation shipments, or postal parcels. KPIs measure delays at ports, airports or assess international connectivity (e.g., number of international connections). These

> 5 See <u>https://sdgs.un.org/goals</u> and <u>https://www.weforum.org/publications/the-global-enabling-trade-report2016/</u>

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