A DEA-logistics performance index

Abstract

Logistics and transport increasingly play a pivotal role in international trade relations. The Logistics Performance Index (LPI) measures the on-the-ground efficiency of trade supply chains or logistics performance. The aim of this paper is to propose a data envelopment analysis (DEA) approach to compute a synthetic index of overall logistics performance (DEA-LPI) and benchmark the logistics performance of the countries with LPI. Dealing with the six dimensions of LPI, the proposed approach uses DEA as a tool for multiple criteria decision making (MCDM). Furthermore, the paper also analyses the potential differences observed when using different variables, namely income and geographical area. Our findings suggest that the logistics performance depends largely on income and geographical area. High income countries are in the group of best performers, which is highly dominated by the EU.