2019 GLOBAL LOGISTICS PLANNING GUIDE
WHAT’S AHEAD FOR 3PLs, EDCs, PORTS, CARRIERS, BANKING/FINANCE AND AIR CARGO LOGISTICS
At the core of every successful business is a well-oiled logistics machine ensuring operational efficiencies, product accuracy and maximizing business at every turn. It’s the blueprint of every business and its power should never be underestimated. Without logistics, there’s no foundation. But there is a catch that goes beyond logistics implementation for successful business initiatives, and that comes in the form of truly knowing the various types of industry-specific logistics needs, how they operate and, most importantly, how they ultimately tie together.
Carefully planned and thought out, this can be the determining factor between networking and business opportunities, navigating an evergreen market, and maintaining the steady flow of the supply chain in the midst of political changes that directly impact the products your business offers. The reputation of one’s business is found in the groundwork of operations. Industry competitors can gauge a company’s success miles away.
Think of logistics planning as you would a crisis plan–without it your business reputation is put at risk and the potential for losing solid customers is too high, and that’s the ultimate goal for our 2019 Logistics Planning Guide.
We gather the golden nuggets of logistics planning from industry leaders such as Pervinder Johar of Blume Global, Port of Rotterdam Business Consultant Vincent Campfens and CEO of A.P. Miller-Maersk Søren Skou. The key insights provided in this year’s planning guide will prepare your operations on a granular level, addressing every aspect while providing alternatives and key figures to consider as the global trade industry kicks off another year.
Port trends for 2019 are already taking shape as the industry continues to see increased joint ventures and tandem efforts for mutual visions combined with record-breaking growth rates for 2018 from ports such as the South Carolina Ports Authority’s (which saw an impressive 15 percent growth for November 2018). The real question is how are they doing it from a logistics perspective amid the tariffs and market unpredictability? President and CEO Jim Newsome spelled it out: use timeliness and resource options to the advantage of operations. What might work one month might prove unsuccessful for the next. Keep options and eyes open for shifts and opportunities. Have a backup plan.
“While the U.S. economy remains strong, there is increasing evidence that U.S. beneficial cargo owners advanced shipments from Asia in an effort to avoid tariffs,” says Newsome, who carefully added, “The first calendar quarter of 2019, however, is much more uncertain in terms of outlook and considering strong volumes achieved in the same period in 2018.”
Port automation and the integration of technology solutions are trends that took charge in 2018 that show no sign of slowing down in 2019. The Port of Rotterdam cites proactive measures through technology solutions and gauging industry changes as key factors to success. Business Consultant Vincent Campfens puts it into perspective in the article, “42km of Connected Complexity: Operating in the Digital Future.”
“Being a smart port is much more than merely introducing awesome new technology into a port to make it safer, more efficient and more sustainable. It is also about looking further ahead in time, making strategic choices to ensure that the port still exists in the future, whilst responding to changes in climate, politics, technology, industries and cargo flows. One of our recent strategic choices is a targeted commitment to digital innovation.”
ECONOMIC DEVELOPMENT COMMISSIONS
Global Economics Prospects predicts a two-year plateau in overall global growth starting in 2019. That doesn’t mean economic development opportunities are not still very much alive and can be leveraged through a realistic, holistically charged strategy. E-commerce alone is shifting big businesses and their customer relationships, increasing product demand and reaching consumers beyond company regions. Alibaba Group announced its initiatives with the government of Rwanda in November and claimed they will utilize the digital economy to support exporters and local producers and their relationship with Chinese consumers.
Global agreements spur economic development and e-commerce success.
“We have already seen tremendous attention from Chinese consumers on Alibaba’s platforms in high-quality Rwandan products such as our top-tier single estate coffee, and we are confident that local products and travel experiences will continue to receive interest and support from the more than half a billion consumers on Alibaba’s platforms,” states RDB Chief Executive Officer Clare Akamanzi. “Alibaba’s travel services platform, Fliggy, and the RDB will also work together to promote Rwanda as a tourist destination through a Rwanda Tourism Store for booking flights, hotels and travel experiences and a Destination Pavilion where Chinese consumers can learn about visiting the country.”
With Amazon-standard expectations, it’s imperative that during the development and planning periods companies incorporate logistics solutions that tie together all modes of the supply chain, eliminating the possibility of leaving out a vital piece to the supply-chain puzzle.
Quantity and quality are two characteristics we are taught to choose between, especially in business. Maersk, the world’s largest ocean carrier, proves that through strategic planning, looking ahead and considering environmental factors to foster growth and success that support both. Additionally, the company values the need to take a step back and confront the challenges while developing solutions that align with the vision and work with what’s anticipated in the next decade. At the end of the day, companies must keep the customer experience at the center of logistics efforts and consider integration efforts for resource utilization. Forward-focused logistics solutions are the name of the game.
Maersk confirmed the strategy of integration logistics to kickstart 2019. The company is leveraging the services from Damco’s Supply Chain and combining them for Mearsk-branded products.
“We are taking further steps in the transformation of our business on a structural level and how we go to market, enabling us to offer more solutions to our customers in a simpler way,” CEO of A.P. Miller-Maersk Søren Skou said. “Our employees play a key role in making this happen and therefore we are at the same time empowering our frontline organization who is closest to our customers.”
Taking it even further, the company recently announced its goal of net zero carbon shipping by 2050. But some wonder why focus on 2050 with 2019 right around the corner? Forward thinking. Quality. Proactive efforts that alert industry players they are ready for the anticipated increase in shipping volumes, without delay. By preparing their vessels in advance, they eliminate potential logistics hiccups.
“The next five to 10 years are going to be crucial,” Skou predicts. “We will invest significant resources for innovation and fleet technology to improve the technical and financial viability of de-carbonized solutions.”
Electric caravans, increased regulations and revolutionizing the air cargo industry as a whole are on the horizon for 2019. The air cargo industry kicked off the new year preparing for growth to be at a stand-still. Industry reports are predicting a reduction from 4.1 percent to 3.7 percent and a total of 65.9m tonnes for 2019–one of the slowest growth rates on record since 2016. Not all hope is lost, however. With carefully crafted logistics in place, industry players can weather the market shifts and still generate successful initiatives. It’s all about looking at the big picture and identifying what is working in your company’s favor during uncertain times.
“We had expected that rising costs would weaken profitability in 2019,” explains Alexandre de Juniac, the International Air Transportation Association director general and chief executive. “But the sharp fall in oil prices and solid GDP growth projections have provided a buffer. So, we are cautiously optimistic that the run of solid value creation for investors will continue for at least another year. But there are downside risks as the economic and political environments remain volatile.”
Resources for airlines to leverage do indeed exist, but they are found within the framework of technology innovations and the relationships sustained and strengthened with other industry leaders. A great example is the automation efforts implemented by Sabrewing Aircraft Co. in the Alaska market. With Anchorage leading as the busiest cargo hub, the company continues to weigh out options that provide solutions for increased efficiencies within a realistic goal. The theme of technology solutions and efforts toward automation makes yet another appearance.
“I thought, there needs to be another solution, a solution that’s much closer at hand and that’s how the thought of cargo came about,” says Sabrewing co-founder and CEO Ed De Reyes, “because cargo—there’s still a lot of requirements that are placed on air cargo carriers and air cargo manufacturers—but it’s a little bit lower hanging fruit, so to speak, from the fact that we’re not flying passengers. What is it that we can do now? What are we capable of doing now and let’s build on that instead of trying to build a system that’s going to rely on massive amounts of, at this time, nonexistent infrastructure.”
Keeping the books clean requires visibility and awareness of dollars coming and going out. Once again, in the theme of digital solutions, if you want that granular level of transparency, leveraging technology solutions in 2019 is imperative, especially for large-scale businesses. Supply-chain management and financing logistics are two of the most important factors when considering logistics planning.
“In 2019, the most agile and resilient supply chains are the ones that are going to be the most successful,” says Blume Global CEO Pervinder Johar. “Natural disasters, economic flux and rising tariffs are going to remain a concern for the supply chain industry and therefore the C-suite may reconsider its current manufacturing strategies and its global operations. To help inform these decisions, companies should combine external and internal data. Predictive analytics uses historical data and machine learning to identify and anticipate certain outcomes that become increasingly valuable as the volume of data increases. When properly analyzed, this data is helpful for identifying patterns and areas for optimization, to fuel better planning and resource utilization.”
Consider implementing a seamless management system that your business can rely on to eliminate risks, such as invoice and vendor fraud, inventory stockpiling and increased inefficiencies. In doing so, companies can track products, customer purchases and deliveries all while monitoring and maintaining their supply chain.
“Predictive analytics will become highly useful to optimize resources within the supply chain in 2019,” Johar predicts. “In late 2018, Gartner identified eight strategic technology trends for the supply chain and how they can provide a competitive advantage. Combined with AI and machine learning, data is the driver for predictive capabilities—with it, future performance can be optimized based on historical results. This data is powerful and has the potential to positively impact every aspect of the supply chain, from sourcing and compliance to production and quality control. Embracing the value of technologies such as predictive analytics is essential for a strong foundation, upon which to build a digital supply chain.”
Infosys Consulting released the 22nd annual Third-Party Logistics Study this year, proving key insights and trends to keep a watch for in 2019. Of the insights, the study revealed that maintaining balance and consistency in an ever changing market is one of the biggest challenges for the logistics industry, pertaining to 3PLs specifically. The study revealed that 91 percent of providers cite 3PLs as a resource for improved operations and logistics.
Examples of this include Seacoast Capital and its $10 million investment in Deliver-It for their consumer base, and Volvo announcing that it will own and operate, in addition to providing, the first commercial use for its automated trucks for a mining company. More big name companies are considering 3PLs as solid logistics solutions for commercial expansions.
Other leading 3PLs, such as global freight forwarder Team Worldwide, utilized global expansion efforts and strategy as a means to improve customer relationships in 2018. General Manager Brian Purugganan explained that implementing such strategies allows his company to invest in supply chain management solutions for customers, providing a way to meet individual expectations. Team Worldwide expanded the company to a new Seattle-based branch for increased customer reach that was set to open in December 2018, laying the foundation for success in 2019.
“The opening of Team Seattle is a strategic part of our domestic and global expansion,” says Team Worldwide CEO Jason Brunson. “Seattle is an important ocean gateway to and from the U.S. It will allow us to better support the needs of our customers in the Northwest and will also help expand our cross-border services with Team Worldwide, Ltd. in Canada.”
Economic Development: What’s Next for Global Growth?