World Bank flags LAC logistics gap

The World Bank’s Logistics Performance Indicators show Latin America and the Caribbean lagging North America on the transport links that move goods across borders. (lpi.worldbank.org) The World Bank’s newer LPI 2.0 system measures supply-chain speed and connectivity with 21 indicators built from tracked movements of containers, air cargo and postal shipments. It does not publish one single overall ranking. (lpi.worldbank.org 1) (lpi.worldbank.org 2) Those tracking indicators focus on three practical questions: how many international links a country has, how long cargo sits still at ports or terminals, and how much time trade corridors take from one point to another. (lpi.worldbank.org) That matters for Latin America and the Caribbean because the World Bank has been arguing since 2023 that the region is still one of the least integrated in the world, even as companies look for nearshoring locations closer to the United States. (worldbank.org 1) (worldbank.org 2) In an April 1, 2024 World Bank analysis on foreign direct investment and reshoring, Chief Economist William Maloney said countries in the region had been “slow to board the nearshoring boat” and still needed infrastructure and policy upgrades. (worldbank.org) The same analysis said public investment, including infrastructure, is about half the share of gross domestic product seen in Asia or Africa, leaving less room to fix roads, ports and border systems quickly. (worldbank.org) For the Caribbean, the Bank’s logistics work has long pointed to unusually high trade costs. A regional study found the biggest problem was not distance alone, but inefficiencies in customs systems and document preparation. (worldbank.org 1) (worldbank.org 2) That same Caribbean study described air and maritime networks shaped more by competition for inbound tourists than by coordinated regional distribution, a pattern that can leave routes fragmented and volumes thin. (worldbank.org) The World Bank’s logistics team says efficient trade depends on faster border procedures, better infrastructure and stronger cross-border coordination. Those are the same building blocks the region would need to turn proximity to the U.S. into more manufacturing and distribution business. (worldbank.org) (worldbank.org) The data does not say Latin America and the Caribbean cannot benefit from nearshoring. It says the region still has to move goods faster, with fewer stops and fewer delays, before that opportunity becomes routine. (lpi.worldbank.org) (worldbank.org)