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Logistics Performance Logistics Performance –– Kazakhstan and Central AsiaKazakhstan and Central Asia

SUPPLY CHAIN CHALLENGES FOR NATIONAL SUPPLY CHAIN CHALLENGES FOR NATIONAL COMPETITIVENESS COMPETITIVENESS

Round TableRound Table

GenevaGeneva, , SwitzerlandSwitzerland22 DecemberDecember 20092009

Oleg [email protected]

mailto:[email protected]

http://www.thegio.net/kazakhstan/kazakhflag.jpg

Logistics Performance Index (LPI) 2007 Evaluates 150 countries by 7 parameters with 5-point scale

• Customs• Infrastructure• International Shipments• Logistics Competence• Tracking and Tracing• Domestic Logistics Costs• Timelines


Logistics Performance Index (LPI) 2007 Central Asia is at the bottom

Rank Country LPI Customs InfrastructureInternational shipments

Logistics competence

Tracking & tracing

Domestic logistics costs

Timelines

30 China 3.32 2.99 3.2 3.31 3.4 3.37 2.97 3.68

103 Kyrgyzstan 2.35 2.2 2.06 2.35 2.35 2.38 2.8 2.76

129 Uzbekistan 2.16 1.94 2 2.07 2.15 2.08 2.91 2.73

133 Kazakhstan 2.12 1.91 1.86 2.1 2.05 2.19 2.81 2.65146 Tajikistan 1.93 1.91 2 2 1.9 1.67 2.33 2.11

150 Afghanistan 1.21 1.3 1.1 1.22 1.25 1 3.13 1.38


Logistics Performance Index (LPI) - 2009Changes from previous studyPreliminary data

Customs control procedures

Got Worse ImprovedAbout the same

52%

16%

21%

17%

45%

48%

28%

59%

68%

45%

0%

56%

20%

14%

10%

Afghanistan

Kazakhstan

Kyrgyzstan

Tajikistan

Uzbekistan



Other control procedures at the borders


22%

33%

32%

5%

51%

74%

50%

59%

68%

35%

4%

17%

8%

27%

14%

Afghanistan

Kazakhstan

Kyrgyzstan

Tajikistan

Uzbekistan


Logistics Infrastructure


0%

9%

14%

3%

22%

94%

31%

68%

37%

43%

6%

59%

18%

61%

35%

Afghanistan

Kazakhstan

Kyrgyzstan

Tajikistan

Uzbekistan



Telecommunications / IT Infrastructure


0%

0%

5%

18%

0%

41%

22%

66%

18%

23%

59%

78%

28%

64%

78%

Afghanistan

Kazakhstan

Kyrgyzstan

Tajikistan

Uzbekistan



Quality and availability of logistics services


31%

0%

14%

14%

5%

69%

17%

59%

31%

73%

0%

83%

26%

56%

23%

Afghanistan

Kazakhstan

Kyrgyzstan

Tajikistan

Uzbekistan



Logistics legislation


0%

0%

12%

21%

3%

100%

24%

71%

29%

85%

0%

76%

17%

50%

13%

Afghanistan

Kazakhstan

Kyrgyzstan

Tajikistan

Uzbekistan



Corruption in logistics


18%

35%

39%

39%

40%

82%

47%

53%

33%

50%

0%

18%

8%

28%

10%

Afghanistan

Kazakhstan

Kyrgyzstan

Tajikistan

Uzbekistan



Logistics Performance Index - 2009Ranking of neighbors by Kazakh freight forwarders*Country

Clearance (customs and other)

Competitive pricing

Quality of logistics services

Tracking and tracing

Delivery on time

Average score

Russia 3.98 2.59 3.52 3.86 4.27 3.64China 3.21 3.33 3.25 3.31 3.44 3.31Kyrgyzstan 2.63 2.94 2.72 3.61 3.92 3.16Uzbekistan 2.56 3.33 2.51 3.24 3.71 3.07Tajikistan 2.53 3.02 2.71 3.25 3.52 3.01

* Preliminary dataInterviewed 300 freight forwarders in 5 Central Asian countries

3.643.31 3.16 3.07 3.01

0

0.5

1

1.5

2

2.5

3

3.5

4

Russia China Kyrgyzstan Uzbekistan Tajikistan


3.573.24 3.22

2.75 2.662.12

0

0.5

1

1.5

2

2.5

3

3.5

4

China Kazakhstan Russia Uzbekistan Tajikistan Afghanistan

Logistics Performance Index - 2009 Ranking of neighbors by Kyrgyz freight forwarders*Country


Competitive pricing



Delivery on time

Average score

China 3.48 3.52 3.62 3.02 4.22 3.57Kazakhstan 2.86 3.13 2.95 3.09 4.16 3.24Russia 2.82 3.14 2.89 3.18 4.05 3.22Uzbekistan 2.21 2.95 2.26 2.48 3.86 2.75Tajikistan 2.06 3.00 2.29 2.38 3.56 2.66Afghanistan 1.63 2.33 1.61 2.00 3.05 2.12



2.97 2.912.68 2.64 2.63

2.16

0

0.5

1

1.5

2

2.5

3

Russia China Kyrgyzstan Tajikistan Kazakhstan Afghanistan

Logistics Performance Index - 2009 Ranking of neighbors by Uzbek freight forwarders*Country


Competitive pricing



Delivery on time

Average score

Russia 2.76 2.79 2.94 3.18 3.18 2.97China 3.13 2.91 2.72 2.81 3.00 2.91Kyrgyzstan 2.38 2.91 2.50 2.49 3.12 2.68Tajikistan 2.39 2.66 2.50 2.50 3.13 2.64Kazakhstan 2.32 2.85 2.33 2.61 3.06 2.63Afghanistan 1.73 4.09 1.35 1.74 1.88 2.16



Best document to define regional logistics master plan isCAREC TRANSPORT AND TRADE FACILITATION STRATEGY (ADB, 2008)

MONGOLIA

PEOPLE'S REPUBLIC OF CHINA

PAKISTAN

AFGHANISTAN

TAJIKISTAN

KAZAKHSTAN

UZBEKISTAN

TURKMENISTAN KYRGYZ REPUBLIC

RUSSIAN FEDERATION

IRAN

ULAANBAATARASTANA

ASHGABAT

XINJIANG UYGUR AUTONOMOUS REGION

INDIA

Urumqi

N

BISHKEK

AZERBAIJANBAKU

CAREC-1a,c

1a

1c

CAREC-2CAREC-1CAREC-5

CAREC-4a

CAREC-2

2a

2b

CAREC-6a

CAREC-1b

CAREC-6b,c

6a

6b,c

3a

3b

CAREC-6a,b

CAREC-3b

CAREC-3

CARE

C-6c

CARE

C-5

Tashenta

N

TASHKENT

DUSHANBE

KABUL

UlaanbaishintO lg iy

Hovd

YarantTakeshiken

Hexi

L ianyungangTurpan

KashiU lukeqiati

IrkeshtamSary-Tash

Karam ik

Kushat

Kurgan-Tube

Nizhni PianjSherkhan

Kunduz

Torkham

Karachi

Troitsk

Fedorovka

Karaganda

Moyinty

Aktogay

Shu

Druzhba Ala Shankou

Alm aty

KhorgosHuochengLugovaya Chaldovar

Naryn

Torugart

Chuanwulu Shankou

Agstafa

YevlakhAlyat

Turkm enbashi

Turkmenabad

AktauBeyneu

Karakalpakya

Nukus

Uchkuduk

Navoi

Sam arkand

DjizakKhavast

Khujand

Kanibadam

KokandAndijan

Kara Suu

Osh GulchaA latBukhara

RubtsovskBelagash

Sem ey

Charskaya

Taraz

ShymkentArys

SaryagashChukursay

Syrdaryinskaya

Kara Balta

Tursunzade

Shargun

Term ezHairatan

Mazar-i-Sharif

Herat

Islam Q ala

Aksarayskaya AtyrauM akat

Orenburg

Iletsk

Kandagash

AyniIstaravshan

M ary Tash GuzarBaisun

Kum kurgan

Tianjin

Kandahar

Jalalabad

Gwadar

Port Qasim

Kumla Pass

Balykchy

Khorong

CA

REC

-4b

Zamyn-Uud

Sukhbaatar

Astara

Band

ar-A

bbas

Sarahs

CAREC-3a

Zaranji

Cha

baha

r

Delaram

Aral Sea

CaspianSea

Arabian Sea

PersianGuff

Karachi/Gwadar

Bandar-Abbas

Chabahar

}

}

Kyzyl-Orda

Aktobe

Erenhot

Naushki

1a,bKuytun

Sarakhs

1b

1cLandi Kotar

Arababad

Gulam Khan

G erdez{

Banda

r-Abb

as

6b

1b

M ONGOLIA

AZERBAIJAN

AFGHANISTAN

PEOPLE'S REPUBLIC OF CHINA

KAZAKHSTAN

KYRGYZ REPUBLIC

TAJIKISTAN

UZBEKISTAN

0 100 200 300 400

Legend:

Kilometers

International boundaries are not necessarily authoritative

CAREC Participating CountriesCAREC 1: CAREC 2:CAREC 3:CAREC 4:CAREC 5:CAREC 6:Feeder Corridors:

Includes-6 Corridors-85 investment projects-68 TA projects


Key national programs for transport and logistics development

• Kazakhstan: Transport Strategy. 2015– Development of transit landbridge– Development of logistics centers in major population centers and

key Border Crossing Points• Tajikistan: National program for development of Transport is

focused on road infrastructure and rolling stock. 2010-2025De-facto: – Tajikistan diversifies transport routes to overcome the dependency

on Uzbek transit– Afghan transit of non-lethal materials– FEZ Sugd and Nijnij Pianj as future logistics centers– Need to develop logistics of agricultural produce

• Kyrgyzstan: Strategy of transport sector development is focused on road infrastructure and maintenance. 2007-2010– Rehabilitation of key road, including 2 corridors to China– Logistics and marketing centers for agricultural produce


http://www1.ocn.ne.jp/~infinite/PeacePath_Flags_Data/TajikistanF.gif


http://upload.wikimedia.org/wikipedia/commons/archive/b/b8/20050610114613!Kyrgyzstan_flag_300.png

Logistics Triangle ConceptBut, several alternative triangles were proposed by different teams

Astana

Almaty

Horgos Dry Port

(Eastern Gates)

Taskala-Ozinki Dry Port

(Western Gates)

Aktau-BeineuPort


International Road Corridor Western China – Western EuropeMultibillion US dollar project (2009 – 2013)

Astana

Almaty


Customs Union Russia – Belarus – Kazakhstan (from 2010)Regional physical distribution patterns in the North will change

Astana

Almaty

Astrakhan

Samara

Yekaterinburg Omsk Novosibirsk


Role of professional associations in development of demand for value added logistics services

Professional organization Country Web

European Logistics Association EU www.elalog.org

Eurasian Logistics Association Russia www.eala.ru

Logistics Association of Volga Region Russia www.logovolga.ru

Ukrainian Logistics Association Ukraine ula-online.org

US

UK

Russia

Council of Supply Chain Management Professionals cscmp.org

Chartered Institute of Logistics and Transport www.ciltuk.org.uk

National Logistics Association www.nla.ru

Establishment Central Asian Logistics Association can be the next step in development of logistics and supply chain

management in the region


Key challenges in Supply Chain Management• Weak and fragmented logistics private sector

(small organizations, no cooperation between professionals)• Too much focus on fixed assets, too little on lean operations• High property prices and availability of capital in 2004 -2007

followed by financial crunch => redundant and expensive warehousing space

• Little understanding of inventory value => excessive inventory, limited use of LTL/LCL and other lean logistics operations

• Different from EU, and not properly examined logistics cost structure (high transport, customs and unofficial payments, relatively low labor and warehousing, etc.) often make global best practices not very relevant

• Logistics management is focused on customs and border crossing issues, supply chains are long and disjointed (many inventory holding points, change of transport documents, physical transloading, etc.)


Logistics Performance Logistics Performance -- Central AsiaCentral Asia

SUPPLY CHAIN CHALLENGES FOR NATIONAL SUPPLY CHAIN CHALLENGES FOR NATIONAL COMPETITIVENESS COMPETITIVENESS

Round TableRound Table

GenevaGeneva, , SwitzerlandSwitzerland22 DecemberDecember 20092009

Oleg [email protected]

mailto:[email protected]


Logistics Performance – Kazakhstan and Central Asia SUPPLY ... · Logistics Performance –...

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