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Logistics Performance and Freight Sector in Jordan

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European Journal of Scientific Research
ISSN 1450-216X / 1450-202X Vol. 152 No 4 April, 2019, pp. 516-527
http://www. europeanjournalofscientificresearch.com

Logistics Performance and Freight Sector in Jordan

Mohammad M. Hamed
Professor of Civil & Transportation Engineering
School of Natural Resources Engineering & Management
Department of Civil & Environmental Engineering
German Jordanian University, Amman 11180, Jordan
E-mail: mohammad.hamed@gju.edu.jo

Abstract

Logistics performance and its impact on international trade and competitiveness of

countries have been attracting a great deal of attention. The World Bank Logistics
Performance Index has been widely used since 2007 as a tool to measure and compare the
performance of the logistics sector among countries and regions. This paper addresses the
performance of the logistics sector in Jordan using the LPI’s six sub-dimensions over a
span of eight years. Results clearly indicate that Jordan’s LPI score has dropped
significantly in 2018 when compared with 2016 score. Challenges to the logistics sector are
clearly reflected in the overall LPI score value and its sub-dimensions. The results show a
decline in sub-dimensions: efficiency and effectiveness of the clearance process by customs
and other border control agencies, ease and affordability of arranging priced shipments,
competence in the local logistics industry (e.g. freight forwarders, transport operators,
customs brokers) and timeliness of shipments in reaching destination has been significant.
Ease of arranging competitively priced shipments sub-dimension came out to be the
weakest forcing the overall international LPI score down. The paper presents a number of
actions authorities could take to improve the logistics performance over the coming years.

Keywords: Logistics performance, Logistics Performance Index (LPI), Transportation

sector, logistics facilities, inland ports

1. Introduction
Logistics performance, supply chain management, and trade and transport facilitation have been
attracting the attention of users, governments and researchers. They have significant consequences on
international trade between countries and economic blocks. In general, poor logistics performance can
significantly hinder international trade and impact negatively the competitiveness of any country. Poor
infrastructure, complex customs rules and regulations and lack of transparency between different
public entities are likely to slow the movement of goods within and across countries. Although the
contribution of the logistical sector to the GDP of any economy is somewhat small (shepherd (2011),
its instrumental role in supporting trade activities cannot be unnoticed (Gani, 2017). This contribution
is likely to grow with high growth in international trade (Gani, 2017).
Logistics performance has many definitions in the literature (Chow et al. (1993), Mentzer and
Konrad (1991), Fugate et al. (2010) and Langley & Holcomb, 1992)). Furthermore, many measures
have been reported to measure logistics performance. Recently, Abu Bakar and Jaafar (2016) addressed
the logistics performance measures and developed a benchmark for the logistics industry from the
users’ perspective. However, not all clusters of industry were included.
Logistics Performance and Freight Sector in Jordan 517

Trade and Transport facilitation (TTF) definition has had also a number of definitions in the
literature. The World Trade Organization (WTO) defines TTF as: “the simplification and
harmonisation of international trade procedures… in collecting, presenting, communications and
processing data required for the movement of goods in international trade”. Wilson et al. (2005)
applied four indicators to define TTF. Those include port efficiency, customs services, prevailing rule
and regulations, and use of e-commerce.
The link between logistics performance and trade facilitation has been addressed in the
literature by many researchers (Arvis et al. (2007 and 2010), Hoekman and Nicita (2010)). The impact
of trade and transport facilitation on trade has also been addressed by OECD (2012). The study
reported that “… the most significant trade facilitation measures are information availability,
harmonisation and simplification of documents, automated processes and risk management,
streamlining of border procedures and good governance and impartiality…”
The quality of the road network and IT infrastructure has been addressed. Dee et al. (2007)
reported that the level of service of infrastructure is associated with significant increases in the volume
of trade. In fact, Nordas et al. (2006) concluded that higher times to process exports and imports were
correlated with reduced trade volumes. Legislations and regulatory frameworks governing the flow of
goods in a particular country significantly affect the competitiveness of that country and the logistics
performance of that country (Hollweg and Wong (2009), Mati et al. (2014), Guner and Coskun
(2012)). Whereas Haughwout (2001) argues that the transport system infrastructure plays a key role in
the productivity and the cost of businesses.

1.1. Logistics Performance Index

The World Bank has developed and has been publishing the Logistics Performance Index for nearly all
countries since 2007 (Arvis, et al. 2014). This index is measured on a scale of 1 (1 being low) to 5 (5
being high). The index is the average of scores covering six sub-dimensions (on a scale of 1 to 5) of
logistics performance (Arvis, et al. 2014). To deal with potential sampling errors, the index scores are
calculated with eighty percent confidence intervals (Arvis, et al. 2014) over the standard error of index
scores across all responding countries (Arvis, et al. 2014). The LPI is a tool used to measure the
logistics performance of any country. Both the efficiency and effectiveness of logistical services and
national infrastructure are key elements of the national competitiveness of any country (Mustra, 2011).
Furthermore, they facilitate trade and transportation between countries (Marti et al. 2014). The LPI is a
weighted average of six key sub-dimensions to benchmark countries logistics performance (source:
World Bank ( https://lpi.worldbank.org )
1. Efficiency and effectiveness of processes by customs and border agencies at the
borders.
2. Quality of transport-related and IT infrastructure
3. Ease and affordability of handling shipments in and outside the country
4. Competence in the local logistics services industry
5. Ability to track and trace shipments throughout the logistics chain
6. Timeliness of shipments in reaching the final destination
Recently, Marti et al. (2014) studied the degree of influence each of the LPI sub-dimensions
has on trade. The study utilized the well-known gravity model (Tinbergen, 1962) to carry out the
analysis. The study reported that improvements in any of the sub-dimensions of the LPI are likely to
cause an increase in the volume of trade. The impact of LPI on a number of fronts have been studied in
the literature (Guner and Coskun (2012), Min and Kim (2010)). In fact, Hoekman and Nicita (2010)
developed a tool combining both the LPI and the “Doing Business” Index to address the influence of
both tariff and nontariff barriers on trade. Similar work has been carried out by Puertas et al., (2013).
Cemberci et al. (2015) addressed the association between the Global Competitiveness Index (GCI) and
each of the LPI sub-dimensions. The study reported that in order to enhance the GCI, significant
518 Mohammad M. Hamed

improvements in the transport system, tracking and tracing, and timeliness are needed. Galkin et al.
(2017) addressed the influence of consumer behavior on the logistics system performance. The study
indicated that consumers’ choices influence the redistribution of material flows in the logistics system.
The association between the quality of logistics performance and trade has also been addressed
by Korinek and Sourdin (2011). Through the estimation of gravity models, the study indicated that
higher quality logistics services are positively correlated with higher bilateral trade. The study also
concluded that all aspects of logistics services, including customs procedures and regulations have a
significant impact on trade more than do distance or freight costs. According to Fugate et al. (2010),
comparison of logistics sector performance with others is likely to create customer value and logistics
differentiation.
The main objective of this research effort is to identify the different constraints that impede the
flow of goods between Jordan and other countries. More specifically, the paper will examine the six
sub-dimensions of the LPI. Unlike past research (Felipe and Kumar (2012) and Hertel and Mirza
(2009)) who used cross-sectional data (one year LPI data for a number of countries), this paper will
address the logistics performance sector in Jordan over the last eight years. The aim is to capture the
component(s) that are hindering the progress of the logistical sector. Furthermore, the paper will
suggest ways to improve the logistics performance and Jordan’s competitiveness in international trade
and services.

2. Logistics in Jordan
2.1. Transport Infrastructure
During the last two decades, Jordan adopted ambitious economic reform and structural adjustment
programs. The average GDP over the last four years (2015-2018) was around 2.2%. Figure 1 shows
Jordan’s GDP in USD for the time period 2010-2018. According to the World Bank*, Jordan’s economy
“... remains burdened with ongoing uncertainty in Syria, slow revival of economic cooperation with Iraq,
and an economic slowdown in the Gulf Cooperation Council (GCC). In addition, the economy is subject
to a slow pace of structural reforms that is impeding a strong recovery in growth...”.
The transport sector is a key component of the infrastructure of Jordan and has a significant
impact on the level of economic development of the country. The transport sector plays an instrumental
role in the country’s economy, accounting for about 8.4% percent of the country’s GDP in 2017.
Figure 2 shows the evolution of the transport sector contribution as a percent of GDP for the time
period 2010-2017.

Figure 1: Jordan’s Gross Domestic Product (GDP), 2010-2017

Source: central Bank of Jordan annual reports

*https://www.worldbank.org/en/country/jordan/publication/economic-outlook-april-2018
Logistics Performance and Freight Sector in Jordan 519

Figure 2: Contribution of transport sector as a percent of GDP, 2010-2017

Source: Jordan Ministry of Transport annual reports

2.2 Transport Roadway Network

Figure 3 illustrates the evolution of the Jordan’s roadway network for the time period 2010 to 2017. In
2018, the total length of road network reached around 8000 Km of paved roads compared with 7601
Km in 2005 (5.2% over 13-year time-period).

Figure 3: Roadway network length (km), 2010-2017

7600
7483
7500

7400 7377
7339 7348
Road Length (km)

7299
7300
7234
7204
7200
7100
7100

7000

6900
2010 2011 2012 2013 2014 2015 2016 2017
Year

Source: Ministry of Public Works & Housing annual reports

Table 1 shows the types of land transport freight modes over the time period 2010 to 2017. The
average yearly growth rate of the fleet over this time period is around 2.8%. This growth rate seems to
resemble the growth rate in GDP over the same time period.
520 Mohammad M. Hamed

Table 1: Evolution of Jordan’s Land Freight Transport Fleet

Vehicle Category Usage 2010 2011 2012 2013 2014 2015 2016 2017
Private 73434 70487 76141 77944 80805 85018 89371 92783
Small Trucks
Public 2407 2237 2325 2362 2369 2400 2420 2393
Mid-Size Trucks Private 24461 27940 24390 25235 26315 27660 29101 30533
(4-10) Ton Public 11797 11696 11732 12362 12798 13607 14505 15186
Large Trucks more Private 3778 3638 3776 3776 3837 3912 4000 3929
than (10) Ton Public 13843 13694 14044 14426 14894 15547 16331 16746
Private 211 190 190 205 197 205 174 167
Tanker/ Truck
Public 917 533 599 873 667 779 528 520
Private 65 63 61 60 59 58 51 51
Truck
Public 1238 1235 1223 1207 1126 1108 1006 1005
Private 673 618 651 629 580 572 564 526
Truck
Public 18834 18652 18674 18842 19190 19486 19744 20018
Trailer 453 440 469 482 493 509 565 622
Semi-Trailer 20955 21389 22027 23006 23840 24853 26015 26910
Total 173066 172812 176302 181409 187170 195714 204375 211389
Source: Ministry of Transport yearly reports

With the absence of a railway network, the trucking fleet is the backbone of the land freight
sector in Jordan. It should be pointed out that about 55% of the trucking fleet is owned by individuals.
In addition, a high percentage of the total number of the fleet has been in service for over 12 to 15
years. Travel times to haul a container from the port of Aqaba to Amman is generally high, reflect
inefficiencies in the trucking fleet. This clearly hinders both imports and exports of goods and increase
overall costs. Only a small percentage of the total fleet meets the strict requirements of the EU. The
Ministry completed a national master plan for railways. The Master Plan is important to Jordan's
economy as a whole. The proposed railway network with a total length of 1086 Km is vital for the land
transport and logistics sectors. The proposed network sets the stage for major investments in the
infrastructure and superstructure of the rail sector (source:
http://mot.gov.jo/DetailsPage/FutureProjects.aspx?PID=3 ).

2.3. Road Freight Traffic

Table 2 shows the evolution in the number of transit goods imported through the port of Aqaba. The
table shows a significant decrease in the number of transit goods destined to other countries. For
example, the number of transit goods to Iraq fallen from 1.4 Million Ton in the year 2011 (74.4% from
the total in 2011) to zero Ton in 2016 and 2017. Clearly, the security situation in Iraq has had its toll on
the number of transit good destined to Iraq via Aqaba port. The significant decline is noticed with
transit goods destined to Syria and Lebanon. Again, the war in Syria is to blame for such a decline.
Any transit goods destined to Lebanon by land freight must pass through Syria.

Table 2: Transit goods imported via Aqaba port & destined to other countries (Ton)

Country of Destination 2010 2011 2012 2013 2014 2015 2016 2017
Iraq 111993 1414330 198124 182394 88422 26957 0 0
Syria 53127 29625 23208 29887 38625 13343 0 0
Saudi Arabia 147356 155284 161277 147160 121234 103021 74849 74830
Lebanon 2131 2610 2829 2022 2315 1478 0 0
Kuwait 12773 18228 23123 17143 73529 80955 46019 8293
Yemen 273 0 0 0 0 400 0 0
UAE 4478 6576 7200 10915 11949 8181 6084 1882
Others 267082 275357 257843 275305 300769 167146 55305 64433
Total (Ton) 599213 1902010 673604 664826 636843 401481 182257 149438
Source: Jordan Ports Corporation reports, Aqaba
Logistics Performance and Freight Sector in Jordan 521

In Jordan, there are a total of three civil aviation airports: Two international airports in Amman,
Jordan’s capital and the third airport located in the city of Aqaba. Figure 4 shows cargo movements for
all three airports for the time period from 2010 to 2017. In 2017 the total number of cargo passing
through all airports was 112426 Ton. The majority (98%) of which is handled by Queen Alia
International Airport. The growth rate in total cargo handled between 2016 and 2017 was 8.8% which
is around four times the yearly GDP growth rate. However, the average yearly growth rate covers the
time period 2010 to 2017 is around 2.7%. Cargo handling at the main airport in Jordan is facing fierce
competition from Cairo and Gulf airports, mainly Dubai airport.

Figure 4: Total Air Cargo handled by three airports in Jordan (Ton), 2010 - 2017

160000
136579
140000
120000 112426
102327 104750 103369
Air Cargo (Ton)

92777 96240
100000 90197
80000
60000
40000
20000
0
2010 2011 2012 2013 2014 2015 2016 2017
year

Source: Civil Aviation Regulatory Commission (CARC)

2.4. Jordan Logistics Performance

The land transport and logistics sector in Jordan is facing many challenges. Over the last decade, there
have been a lot of emphases to build road links in the country without addressing the creation of a
contemporary transport and logistics infrastructure and services.
Table 3 shows the World Bank overall LPI for a number of countries with different income
status for the time period 2010 to 2018. It is evident that countries (Germany, USA, Sweden, Austria,
Japan, Denmark, UK, Finland, etc) which play instrumental role in the world trade have a high
performance logistical system. In 2018, Jordan’s LPI rank is 84 with LPI score value of 2.69. This is a
major drop compared with Jordan’s rank (67) and LPI (2.96) in 2016. In general, the LPI for Jordan
has been fluctuating over the eight-year time period. In 2012, Jordan’s LPI rank was 102 with LPI
score value of 2.56.

Table 3: Logistics Performance Index and Rank ( ) for Jordan and other selected countries

Country 2010 2012 2014 2016 2018

Egypt 2.82(67) 3.18(49) 2.97(62) 2.98(57) 2.61(92)
France 3.84(16) 3.9(16) 3.85(13) 3.85(12) 3.84(17)
Germany 4.2(1) 4.23(1) 4.12(1) 4.03(4) 4.11(1)
Greece 3.2(42) 3.24(47) 3.2(44) 2.83(69) 2.96(54)
Italy 3.74(19) 3.76(21) 3.69(20) 3.67(24) 3.64(22)
Jordan 2.69(84) 2.96(67) 2.87(68) 2.56(102) 2.74(81)
Kuwait 2.86(63) 3.15(53) 3.01(56) 2.83(70) 3.28(36)
Lebanon 2.72(79) 2.72(82) 2.73(85) 2.58(96) 3.34(33)
Oman 3.2(43) 3.23(48) 3(59) 2.89(62) 2.84(60)
Qatar 3.47(30) 3.6(30) 3.52(29) 3.32(33) 2.95(55)
Saudi Arabia 3.01(55) 3.16(52) 3.15(49) 3.18(37) 3.22(40)
522 Mohammad M. Hamed

Country 2010 2012 2014 2016 2018

Sudan 2.43(121) 2.53(103) 2.16(153) 2.1(148) 2.21(146)
Syrian Arab Republic 2.3(138) 1.6(160) 2.09(155) 2.6(92) 2.74(80)
Tunisia 2.57(105) 2.5(110) 2.55(110) 3.17(41) 2.84(61)
Turkey 3.15(47) 3.42(34) 3.5(30) 3.51(27) 3.22(39)
United Arab Emirates 3.96(11) 3.94(13) 3.54(27) 3.78(17) 3.63(24)
United States 3.89(14) 3.99(10) 3.92(9) 3.93(9) 3.86(15)
MENA Region 2.78 2.89 2.5 2.58 2.6
Source: World Bank (https://lpi.worldbank.org/international/global)

Figure 5 shows the overall LPI for Jordan with 80% confidence interval. Examining the LPI
score values with the intervals reveal that the drop in LPI score in 2018 to 2.69 is a significant drop.
Clearly, the fluctuation in the LPI value (weighted average of all sub-dimensions) is a direct result of
inefficiencies in one or more of the LPI sub-dimensions.

Figure 5: Jordan’s LPI score for the period 2010-2018 with 80% confidence 80% intervals (min=1, max=5)

3.40
3.17
3.20 3.05
3.00 2.91 2.87 2.86
2.96
2.87
2.80
2.74 2.69
2.60 2.56 2.70 2.74
2.40 2.57 2.52
2.20
2.25
2.00
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Year

Source: World Bank (https://lpi.worldbank.org/international/global )

Figure 6: Jordan’s LPI’s sub-dimensions score (a) Customs (b) Infrastructure (c) Logistics Competence (d)
Tracking and Tracing (e) Timeliness (f) International Shipment

Customs Infrastructure
2.77
2.8 2.8 2.69 2.72
2.6 2.55
2.49 2.59
2.6
2.31 2.6 2.48
2.4 2.27
2.2 2.4
2010 2012 2014 2016 2018 2010 2012 2014 2016 2018
(a) (b)
Logistics Performance and Freight Sector in Jordan 523

Logistics Competence Tracking and Tracing

2.94 2.89
3 4
2.49 2.55 2.96
2.55 2.67 2.77
2.5 2.17 3 2.33
2 2
2010 2012 2014 2016 2018 2010 2012 2014 2016 2018
(c) (d)

Timeliness International Shipment

3.63.39 3.46 3.53.11 3.17
3.34 2.88 2.96
3.4 3.18 3
3.2 2.44
2.92 2.5
3
2.8 2
2010 2012 2014 2016 2018 2010 2012 2014 2016 2018
(e) (f)
Source: World Bank (https://lpi.worldbank.org/international/global )

Figure 6 illustrates Jordan’s LPI sub-dimensions for the eight-year time period.
Examining these sub-dimensions for the last years (2018 and 2016), it is evident to see why
Jordan’s overall LPI score value and rank dropped significantly in 2018. Sub-dimensions
relating to the efficiency and effectiveness of the customs clearance processes and other border
control agencies, the ease and affordability of arranging priced shipments, the competence in
the local logistics industry (e.g. freight forwarders, transport operators, customs brokers) and
timeliness of shipments in reaching destination showed a decline in 2018 when compared with
2016. The major drop was in the sub-dimension “ease and affordability of arranging
international shipments” (3.17 in 2016 compared with 2.44 in 2018). The remaining two sub-
dimensions namely: quality of transport and logistical services and IT infrastructure for
logistics and the ability to track and locate all kinds of shipments had a lower score in 2018
when compared with the year 2016. Below is a discussion of some of the sub-dimensions that
caused a significant drop in Jordan’s overall LPI.

3. Discussion
Jordan's Logistics Performance Index score value for 2018 is lagging behind countries like UAE,
Qatar, Oman, Egypt, KSA, Kuwait and Lebanon (Table 3). Challenges to the logistics sector are
clearly reflected in the overall LPI score value and its sub-dimensions. Clearly, all sub-dimensions of
the LPI must work in harmony to create high-performance logistics sector in Jordan.

3.1. Sub-Dimension: Efficiency and Effectiveness of the Clearance Processes by Customs

Figure 6 illustrates that this sub-dimension showed a significant decline in 2018 when compared with
2016. This is a clear indication of high times to trade and complete trade (import, export, and transit)
transactions. Most likely customs procedures are not fully streamlined at the borders. Although Jordan
has made significant advances in streamlining of customs processes and procedures at Jordan borders
with Syria, Iraq, and KSA, more work still needed to achieve greater efficiency and effectiveness by
524 Mohammad M. Hamed

streamlining and harmonizing customs procedures to meet international standards. According to World
Bank data, it takes on average 4.6 days (time to complete trade transaction at the border) to clear direct
exports through customs and 5.3 days to clear direct imports through customs. These times are well
below the numbers for the Middle East & North African Region (6.4 days for exports and 10 days for
imports). However, it takes about 1.7 days in the UAE to clear direct exports through customs. The
export processes in Morocco and Tunisia take 3.5 and 3 days respectively. There must be a significant
decrease in the variability of clearance times.
This sub-dimension also indicates the depth of effectiveness of the Trade and Transport
Facilitation strategy in Jordan. Although the Ministry of Transport created a Secretariat for Trade and
Transport Facilitation (STTF) and set up a National and Technical Committees within STTF, the
impact of STTF is still clearly unfelt. The STTF should in part identify key issues that need to be
addressed to improve the logistics environment in Jordan.

3.2. Sub-Dimension: Ease and Affordability of Arranging Priced Shipments

The drop in this sub-dimension is very significant (from 3.17 in 2016 to 2.44 in 2018). This drop had a
major impact on the overall LPI value and Jordan’s rank. In fact, the ease of arranging priced
shipments is the weakest LPI sub-dimension for Jordan. Jordan’s rank for this sub-dimension is 119
out of 160 countries for 2018. In 2016, Jordan’s rank in this sub-dimension was 49. Despite
authorities’ efforts to grant incentives to truck operators to renew their fleet, very few operators
upgraded their fleet. The situation in both neighboring Syria and Iraq and the closure of borders with
these two countries in the last few years has halted most of the truck-fleet movement. In addition,
Domestic energy prices clearly impacted the cost of moving goods from the main port in Aqaba to the
rest of the country. In Jordan, diesel fuel accounts for over 40% of total freight costs.
The inland freight cost of containers and other general cargo from Aqaba to the rest of the
country is high. In fact, the inland freight cost from Aqaba to Amman, the Capital, is about 25% of the
total sea freight cost from Europe to Aqaba. Jordan's high freight transport costs serve as barriers not
only to increase trade flows but also to attracting foreign direct investment (Devlin and Yee (2005)).
These drawbacks are likely to make it difficult for Jordan to become a regional trade and transport hub.

3.3. Sub-Dimension: Competence in the Local Logistics Industry

The quality of logistics services and operation dropped from 2.89 in 2018 to 2.55 in 2016. This sub-
dimension measures the overall competence and quality of logistics services and operational quality of
the transportation operations offered in Jordan. Jordan’s rank in this sub-dimension is 93 out of 160
countries. Clearly, not a good position to be in. Again, this sub-dimension has a significant impact on
Jordan’s overall LPI score. The competence and quality of transport and logistical services are
influenced by a number of elements in the logistics sector. These include: road network, rail network,
air transport services, maritime transport operations, warehousing/trans-loading and distribution
facilities, freight forwarders services, processes and procedures of customs agencies at the borders,
quality/standards inspection agencies (e.g. Jordan Food and Drug Administration), customs brokers,
and trade and transport associations and shippers.
The freight forwarding industry is not well-developed in Jordan. There is a need to bring local
freight forwarding activities towards international standards. Jordan logistics providers are not large
companies and they are not growing both nationally and internationally. There are restrictions to
market entry. As such, it is not easy to attract Foreign Direct Investments (FDIs). Having leading
international firms in Jordan is likely to create competition, but also the transfer of technology and
expertise to the Jordanian logistics sector. Authorities must create a real partnership with the private
sector (freight forwarders Association, Jordanian Logistics Association, Chamber of Commerce, etc) to
develop the freight forwarding and maritime industry. Improved IT capabilities along with investment
Logistics Performance and Freight Sector in Jordan 525

in improved management and human resources capabilities are likely to create more efficient and
effective logistics services to traders.

3.4. Sub-Dimension: Timeliness of Shipments in Reaching a Destination

The timeliness sub-dimension of international deliveries is down to 3.18 in 2018 from 3.34 in 2016.
Jordan’s rank for the year 2018 in this sub-dimension is 76 out of 160 countries. This sub-dimension
measures the reliability of the overall supply chains by measuring how frequently shipments reach
trader in accordance with scheduled delivery times. A number of factors are likely to be blamed for
higher delays in Jordan’s logistics sector. These may include pre-shipment inspection, border crossing
procedures, prevailing logistics services, nature/type of transported goods, planning and management,
political instability and the war in neighboring countries, fragmented trucking industry, old and
inefficient truck fleet, frequent workers strikes at key transport facilities and ports and sea freight
transshipments. It has been reported in the literature that maritime transshipment has the highest weight
for the delay (Arvis, et al., 2014).

4. Recommendations & Concluding Remarks

Manufacturing firms look for: access to key markets, adequate skills at competitive costs, high quality
infrastructure, effective and efficient logistics services. Jordan’s overall logistics performance through
the LPI and all its six sub-dimensions has witnessed fluctuations over the last eight years. There is
evidence of a decline in sub-dimensions: efficiency and effectiveness of the customs clearance
processes and other border control agencies, ease and affordability of arranging priced shipments,
competence in the local logistics industry and timeliness of shipments in reaching all destinations has
been significant. “Ease of arranging competitively priced shipments” sub-dimension came out to be the
weakest forcing the overall international LPI score down.
Authorities should adopt practical measures to upgrade the transport fleet and facilitate the
movement of goods within the country by providing tax incentives. In addition, authorities should lay
the ground to support investments in the railway, logistics cities and logistics services sector. Both the
public and private sectors must form partnerships to move forward with the logistics sector.
To improve the overall logistics performance and boost Jordan’s competitiveness, international
know-how, training, technology, and expertise are needed. Furthermore, both trade and transport
facilitation and customs procedures and processes must be revisited to reach international levels. These
border crossing facilities should include a cargo terminal, a passenger terminal, marshalling areas,
parking areas, and storage facilities. Well-functioning logistical and transport sector is a key element of
national competitiveness (Mustra 2011). Improvements in the administration of borders significantly
influence imports even more than exports (Korinek and Sourdin, 2011).
Jordan can and has the potential to be a regional transport and logistics hub. More work is
needed however to reduce transport times of deliveries across the country, minimize transport and
transit costs and fees, develop inland ports at key locations, build large logistics-oriented facilities and
transport centers, simplify and harmonize all administrative documentation and customs procedures for
transit traffic, provide support and capacity building needed to people working in the freight
forwarding and logistics firms, introduce greater integration of IT into the logistics and maritime
shipping, and adopt key indicators for trade and transport facilitation process. The use of Trade and
Transport Facilitation indicators should enable authorities to better assess which trade facilitation
elements deserve immediate attention. All this should be carried out through a well-structured transport
and logistics strategy. The strategy should include all Trade and Transport Facilitation policies. Cleary,
the proposed railway network when implemented will make Jordan a major transit hub.
In general, the availability of skilled work force in the logistics sector in Jordan is scarce. This
clearly leads to lacking management skills, especially at tactical and strategic levels. Logistics cities
526 Mohammad M. Hamed

and inland logistical ports facilities are key elements of the logistics sector infrastructure. Authorities
could open up investment avenues in this area and attract more FDI.

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