Everyone cannot do everything
The global logistics market has grown steadily over the last decades. The onset of the economic downturn in 2008 resulted in a new assessment of the situation becoming essential, however. Several factors impose themselves on the sector from the outside, but internal processes and strategies need to be taken into account too.
The logistics industry, an important driver of the economy, will by no means go under, that much is clear. Even if consumption habits change, or environmental awareness becomes stronger – meaning that customers start to demand ever more green logistics – people will still always want to buy goods which are not available right on their doorstep.
Speaking of doorsteps – online shopping is one of the new forms of consumer behaviour that is likely to continue to grow in the near-term future. Logistics companies need to reorganise for this, in order to retain their share of the transport volume of goods ordered in this way.
In this context the so-called last mile plays an important role – that is to say, the individual transport of the goods to the ultimate consumer, rather than to a large distribution centre.
Other important measures which will (and have to) be taken by large, medium-sized and small businesses alike is investment in the sustainability of logistics. According to the company Deutsche Post climate change is one of the biggest problems in the world – particularly in Asia, it says, with China and India at the forefront. The reduction of CO2 emissions costs money, and it should be enforced through international regulations. Every logistics business segment – the sea and air modes, and overland transport particularly– is affected.
We must point out here that of course Deutsche Post is by far not the only company which is investing in logistics that are more environment-friendly – and has subsequently used these efforts as an advertising tool to retain customers or acquire new ones.
According to one survey, offering green services is an important decision-making factor for almost 60% of business customers. Market observers anticipate that this percentage will rise sharply over the next ten years.
Individualisation of services
Despite consumers’ new-found environment-friendliness, the price naturally remains one important factor amongst others when placing an order. Therefore the green measures are not sufficient on their own in the fiercely competitive market, but must be complemented by other measures.
Currently, many logistics companies place a high value on the intensification of tailor-made services. This now also applies to small and medium-sized enterprises that concentrate on certain modes of transport or special niche markets. For example, there are more and more companies which only transport objects of art. This is still good business sense, as exhibitions, although shorter, are being held rather more frequently these days than they used to be.
The revolution is still to come
Similar developments can also be seen in larger companies, such as Switzerland’s Panalpina, for example. The latter stressed that the main pillars of its business are global air and sea freight – a specialisation in the broader sense of the word.
This opinion was voiced by Peter Ulber, Panalpina’s CEO, in an interview with the Swissquote Magazine. One of the points he made in said article is that it is important to focus on specific areas of activity – and not to try to offer all things to all customers.
Ulber, however, does not see this as the most important development in the logistics and transport industry, rather he believes that the real revolution has not yet taken place in the trade. He believes that the logistics industry will have to reinvent itself.
Near-shoring to rise
The concept of near-shoring represents one such example. Companies that manage complex international operations will try to bring their production plants back to their homelands, so that their goods can be assembled much closer to the end customer.
Ulber is convinced that companies such as Panalpina will therefore have to be increasingly involved in the final assembly and testing phases in the future.
So, it remains exciting to be in an industry which affects the economy unlike almost any other and thereby influences the prosperity of almost everybody in the world.