Recommendation 1: Encourage/promote the development of an EU-wide framework for logistics performance assessment (national and company/3PL level)
The existence and use of a multitude of national logistics performance approaches in Europe has been highlighted in the review presented in last sections. These logistics performance systems obviously reflect national priorities. However, the implementation of EU-wide policies for logistics activities (e.g., Freight Transport Logistics Action Plan) requires monitoring their impact across Europe and within individual EU member states. Moreover, the implementation of such policies affects the organisation, operation and performance of the entire logistics system. It is therefore recommended to encourage the development of an EU-wide framework for national logistics performance assessment that should enable comparison of national logistics performance across the EU and between EU member states and at the same time consider specific national logistics policy priorities.
In addition, the review of performance assessment approaches at company/3PL level has highlighted that there is no specialised performance assessment framework for 3PL service providers. Performance assessment of 3PL service providers is important in the context of outsourcing of logistics activities, as it enables customers to determine service levels in contracts with 3PLs and monitor the performance of 3PLs throughout the contract duration. It is therefore encouraged to develop an EU-wide framework for 3PL performance assessment that should enable customers of 3PLs to set and monitor 3PL service level goals.
The development of an integrated EU-wide logistics performance assessment framework would require an EU-wide harmonisation of objective performance indicators in terms of i) definition, ii) metrics, iii) data collection protocols, iv) reporting. Harmonisation should also be pursued in terms of data requirements (e.g., sample size, sample composition, etc.) for each performance indicator. Logistics costs, as a multi-component performance measure, should especially be harmonised in terms of the categories of costs it comprises.
It is therefore recommended that the European Union undertakes the task of harmonising logistics performance indicators in close consultation with major stakeholders in the European logistics sector. The aim should be to reach for, as broad as possible, a consensus on the i) definition, ii) metrics, iii) data requirements, iv) data collection protocols, v) reporting of the harmonised indicators. It is reasonable that the task of harmonisation should be the responsibility of the European observatory on logistics performance measurement (see Recommendation 2) as a prior action to the development of the EU-wide logistics performance measurement scheme.
More specifically, actions that could be undertaken in this direction include:
Develop a European observatory on logistics performance assessment that will comprise national logistics stakeholders (e.g., national logistics associations, statistical authorities) from each Member State. This network will develop the EU-wide logistics performance assessment scheme; the stakeholders will be responsible for the collection of logistics performance data at national (member state) level. An example of such a network is the Logistics Performance International Observatory (Rantasila and Ojala, 2012); Produce an annual report on the State of European Logistics that will include the logistics performance data collected through the EU-wide logistics performance assessment scheme;
Review the state-of-the-art in European policy at regular intervals (e.g., every 2 years) in order to identify potential changes in the policy priorities that may impose updates/changes to the performance assessment framework (e.g., re-prioritisation of performance categories / indicators, inclusion / omission of performance categories).
Recommendation 2: Shift the focus from single-criterion (e.g. cost-oriented) performance assessment to multiple-criteria performance assessment
One major conclusion of the review of logistics performance systems is that the main (or in some cases sole) focus of performance is on single performance criteria, such as logistics costs (total and/or per logistics activity) and (less frequently) efficiency and effectiveness. This one-dimensional concept of logistics performance is rather limited in light of policy developments which require a broader view of transport and logistics performance, however comprehensively the cost dimensions may be specified. Performance assessment approaches such as the Triple Bottom Line (3BL) approach, which incorporates the concept of sustainability in policymaking and corporate decision-making and considers the three dimensions of social, environmental and financial performance, may constitute the basis of logistics performance measurement in the future. It is therefore recommended to emphasise the importance of a multi-criteria approach for logistics performance assessment both at national and at company level. It is suggested that at least the following performance dimensions be additionally considered:
Environmental sustainability;
Safety and security;
Employment/Labour.
Logistics performance measurement that incorporates multiple performance dimensions should be complemented with a prioritisation process of these dimensions. This is necessary for two reasons. Firstly, national logistics policy priorities may differ between member states; therefore the relative priorities of each state should be incorporated in the EU-wide performance assessment process. Secondly, performance objectives and priorities may also differ between stakeholder categories in each country and across Europe. A multi-criteria approach to logistics performance measurement should therefore incorporate the assessment of the relative importance of the various KPAs and the respective KPIs at member state and at stakeholder level.
Recommendation 3: Encourage the use of objective data in logistics performance measurement
According to the analysis in Sections 5.3 and 5.4, studies on logistics performance measurement at national or cross-country level most commonly employ a survey-based approach. A review of national-level logistics costs studies (Rantasila and Ojala, 2012) shows that around 30% of the studies employ a survey method, 23% are statistics-based and the remaining 47% employ a case-study or some other approach.
The use of data (indicators and metrics) for which objective measurements (i.e., absolute measurements that do not incorporate subjective perceptions of the data providers) can be collected, should be encouraged, especially in survey-based studies (which are more conducive to subjective assessment). The systematic collection and use of objective data in logistics performance measurement can:
Produce robust results of linkages / causal relationships between the variables assessed;
Increase homogeneity and comparability of logistics performance results across countries and facilitate policy evaluation; Reduce systematic biases related to survey design, psychological factors and other subjective traits of the respondents.
The analysis has also revealed that at both national and company level, logistics costs are largely assessed using objective indicators/data. The major categories of logistics costs identified and measured are transportation costs, warehousing costs, inventory carrying costs, administration costs and other logistics-related costs. However, in multi-thematic performance assessment studies, which include more performance dimensions besides costs there is a lack of objective indicators for dimensions such as service level, environmental sustainability, efficiency, safety and security. It is therefore suggested to encourage the use of objective indicators for other performance dimensions.