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Ongoing Supply Chain “Disruptions” Indicated in Latest Ti Survey

According to Logistics Surveys 2017, the express industry has already undergone transformation, not least due to the seismic shifts brought about by e-retail.

By ·
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By ·

Transport Intelligence (Ti) a consultancy based in Bath UK, has just produced a collection of primary research reflecting the latest thinking in the market and the views of senior executives within its Logistics Briefing network.

According to Logistics Surveys 2017, the express industry has already undergone transformation, not least due to the seismic shifts brought about by e-retail.

The report provides up to date analysis of the key trends affecting the industry, split into five surveys investigating the freight forwarding, road freight, express and warehousing sectors as well as the increasingly important topic of environment and ethics in logistics.

While the individual surveys identify a different set of challenges for each of the logistics markets, disruption was one of the most important trends, which was identified across all the segments.

In each case, innovation and disruption was regarded as a ‘double-edged’ sword. A large proportion of respondents in the forwarding sector believed that traditional freight forwarders would lose out to new entrants but at the same time saw certain technological innovations as a way of mitigating the impact of increasing costs. The freight forwarding survey also identifies the trade lanes ,which logistics professionals believe offer the best prospects for volume growth for air and sea freight.

In the European road freight survey, respondents reveal which technologies have the greatest potential to transform their business. It may come as a surprise to some that autonomous vehicles were not the runaway winner (they ranked third), perhaps because many respondents took the “believe it when they see it” view, assessing fully driverless trucks as something of a pipe dream.

The road freight survey also suggests that the road freight market will witness significant fluctuations in road freight rates in the coming year as well changes in the FTL and LTL split. Overall, the survey identifies where growth opportunities might lie in the European road freight sector, thereby providing input into transforming hauliers’ strategies to align these with the upcoming trends and demand fluctuations.

Despite many years of internet shopping, respondents still believe this offers their businesses the best prospects, with strategies still focused on meeting evolving needs. Given the strains which e-commerce can put on the operations of express carriers, how should they best deal with this change in volume mix? Respondents were asked to rank four options and provide their own views as to how to deal with the increasing volumes and time sensitivity.

John Manners-Bell, Ti’s chief executive officer, notes that e-commerce is having an equally important impact on warehousing property. Not only has this trend led to vast investment in new facilities but, according to the survey, smaller locations aimed at distributing e-retail shipments to local consumers are growing in importance.

“Given the amount of publicity which many online booking and quotation platforms have received in the international freight forwarding sector, I was surprised at the amount of respondents who were disappointed in their performance,” he said in an interview.

He adds that 61% of logistics executives who had used these platforms said that performance had been ‘mixed’ and only 14% said that it had performed well in all areas of functionality.

“This suggests to me that the sector still has a long way to go before this technology disrupts more traditional freight forwarding processes even though the survey also suggests that significant progress towards digitization is inevitable in the next five years.”

According to Manners-Bell, next year’s survey will track the development of these platforms, not only to find out how widespread adoption has become, but also to discover if they are living up to expectations in terms of competitive as well as instant pricing.

“Costs across all sectors will continue to rise in 2018, and the most successful companies will be those who are able to mitigate their impact on their profitability,” he said. “Technology will play an important role in this, driving efficiencies. Respondents also expect there to be further mergers and acquisitions activity as the major players seek to consolidate their position in the market and push into specialist (and more lucrative) niches such as perishables and pharmaceuticals.”

The Environment and Ethics in Logistics survey reveals that sustainability has increased in importance as a corporate priority, largely due to companies’ requirements to comply with government regulations and customer demands. However, according to the survey, other benefits accrue to organizations willing to embrace sustainable strategies.


About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]

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