Logistics has rapidly grown in the recent years not only in terms of scope but also of significance for companies and economies. It has evolved from a concept covering only transportation and physical distribution to a wide interdisciplinary field of study that is involved in all activities and functions related to product and information flows such as warehousing and storage, cargo handling, distribution, terminal operations, customs brokerage, and data management, among others. As logistics grows, so are the challenges to keep it efficient and reliable. For this reason, it is essential for companies and countries to encourage innovation and collaboration to make logistics effective, sustainable, and resilient. To understand the role of innovation in improving logistics performance, the study examined the relationship between the Logistics Performance Index (LPI) scores of European Union member states and new innovations introduced by enterprises in the Transport and Storage sector. Further analysis was also conducted on the impact of the productivity of innovative enterprises on LPI scores. Using correlation analysis, the study found that a country’s number of enterprises with innovations (i.e., new methods of providing service, new supporting activities for processes, and improved logistics) and number of enterprises engaged in collaborations are significantly correlated with its LPI score. Moreover, a linear regression analysis conducted showed that the labor productivity of innovative enterprises has a significant impact on LPI scores. These results mean that encouraging innovation and collaboration in firms within the Transport and Storage Sector have positive effects in improving LPI scores.

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