More generally, it is important to ensure that improvements in hard and soft
infrastructure keep pace with each other. Soft infrastructure governs the conditions
under which trade logistics operators can access and use hard infrastructure, so it is
generally appropriate to loosen those conditions as physical improvements take place.
This approach ensures that the improved physical infrastructure is used to the
maximum possible extent, which has flow-on benefits for the time, cost, and reliability
of supply chain operations.
Challenge 8: poor internal logistics and domestic logistics capacity
This paper has largely focussed on international trade logistics; that is, the set of
processes that move goods from exporters in one country to importers in another.
However, internal connectivity is also a challenge for some countries in the Asia-Pacific
region, particularly those that are geographically large and diverse, and those that are
archipelagic. For instance, the People’s Republic of China (PRC) is a strong overall
performer in the LPI, but its score primarily reflects the state of play at its major
international gateways. Ensuring connectivity between those gateways and the
hinterland is widely believed to be considerably more challenging. Internal connectivity
is also challenging for Indonesia, where restrictive maritime cabotage practices and
infrastructure problems result in it sometimes costing less to ship goods internationally
(e.g. to Singapore) than to another part of Indonesia. From a supply chain efficiency
point of view, remedying these disparities in logistics performance is clearly an
important priority.
More generally, it is important to ensure that improvements in hard and softinfrastructure keep pace with each other. Soft infrastructure governs the conditionsunder which trade logistics operators can access and use hard infrastructure, so it isgenerally appropriate to loosen those conditions as physical improvements take place.This approach ensures that the improved physical infrastructure is used to themaximum possible extent, which has flow-on benefits for the time, cost, and reliabilityof supply chain operations.Challenge 8: poor internal logistics and domestic logistics capacityThis paper has largely focussed on international trade logistics; that is, the set ofprocesses that move goods from exporters in one country to importers in another.However, internal connectivity is also a challenge for some countries in the Asia-Pacificregion, particularly those that are geographically large and diverse, and those that arearchipelagic. For instance, the People’s Republic of China (PRC) is a strong overallperformer in the LPI, but its score primarily reflects the state of play at its majorinternational gateways. Ensuring connectivity between those gateways and thehinterland is widely believed to be considerably more challenging. Internal connectivityis also challenging for Indonesia, where restrictive maritime cabotage practices andinfrastructure problems result in it sometimes costing less to ship goods internationally(e.g. to Singapore) than to another part of Indonesia. From a supply chain efficiency
point of view, remedying these disparities in logistics performance is clearly an
important priority.
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