New Articles

Digitalization Helps to Simplify Daily Tasks for Truck Drivers


Digitalization Helps to Simplify Daily Tasks for Truck Drivers

There is no doubt that truck drivers have tough tasks in road transportation. Not just driving, but the drivers are also responsible for loading, unloading products, securing cargo, and checking their status, filling all necessary documents. But the profession is not what it used to be many years ago. Today, there are plenty of opportunities and innovative solutions that alleviate a driver’s workload. State-of-the-art trucks, with the latest technological solutions, cameras, and automatic systems as well as increased safety and comfort features, all those things allow drivers to focus on the road and complete deliveries on time.

To overcome the problems of drivers, Girteka’s fleet is now using a simple tablet with all features. A solution known as telematics collects information of driving performance, the status of trailer and cargo, fuel consumption, localization etc., and can also be used in terms of communication with transport managers or company departments, responsible for information flow, document preparation or even accounting.

The digitalization of services and processes inside the company is a great benefit for the driver. Through an easy-to-use tablet and dedicated system, the driver can keep track of his activities, communicate with the transport manager, plan future routes, navigate, generate documents, and analyse his driving performance. It offers drivers a simple, easy-to-use list of activities, including pre-departure inspections, permission purchases, instruction reports, trailer information, and reporting problems.

With tablet computers installed in trucks, transportation managers can provide all the information drivers need, from the route of the next shipment to instructions, changes, or just tips. And as some of them can be triggered by the data or a certain situation, instant support is provided.

Furthermore, the solution provides all necessary and required information regarding drivers’ working hours and rest times according to the latest Mobility Package regulations. In this way, drivers are always up-to-date and able to check their status, work, and rest hours, and plan their schedules accordingly. This information is supported by Artificial Intelligence (AI) tools to prevent errors and ensure the best conditions for drivers.

The above digital solution will not require any paper documents. Ordering logistics services, establishing routes, trucks, and trailers, coordinating with drivers, setting up loading and unloading times, providing confirmation documents at every stage, and invoicing are still quite complicated processes.

Freight forwarders such as DHL and Sennder have also implemented new techniques to enhance truck driver experiences. In February 2023, DHL Supply Chain, part of Deutsche Post DHL Group, launched DHL Driver Self Service, a digital offering that reduces the time it takes for truck drivers to check in and out of facilities, driving greater operational efficiency and an improved driver experience. DHL Driver Self Service fully automates the load check-in/check-out process. In select facilities, DHL and non-DHL drivers can scan QR codes to complete necessary paperwork using their mobile phones or tablets when passing the entry gate.

Similarly, sennder introduced a driver app to centralise communication between sennder, the carrier, and the driver all in one place. The driver app saves time and speeds up payments. Its advantages include easier GPS integration, it makes coordination easy, keep drivers up to date, no more check-in calls, automated arrival and departure times and get paid faster.

Furthermore, LKW Walter launched TruckerPoints, a driver bonus program in its LOADS TODAY app. Activities such as uploading documents and activating GPS are rewarded with TruckerPOints. Points can be redeemed for vouchers from LKW Walter’s partners, including Amazon and Allegro.

In a climate with increasing competition between carriers and challenges to recruit and retain drivers, investments in technology solutions that make the trucking job easier will continue to offer a competitive advantage for carriers and boost productivity and drivers’ efficiency.


Nissan Ariya electric vehicle

Nissan Plans Supply Chain for Electric Future

Assuming that the automotive supply chain will return to its pre-2020 profile is dangerous. Change is happening even faster than the vehicle manufacturers had planned for. Nissan for example has just been discussing the future of its supply chain architecture as part of what it calls its “Ambition 2030”. This outlines what the Nissan product line-up will look like.

The latest announcement is that “Nissan will increase the number of models to meet the growing needs of customers for exciting and diverse electrified vehicles, introducing 27 new electrified models, including 19 new EVs, by fiscal year 2030. As a result, the electrification mix across the Nissan and INFINITI brands by 2030 is projected to increase to more than 55% globally, up from the previous forecast of 50%.” For Europe the figure is even higher with 98% of vehicles to be electric vehicles (EV).

In discussions with journalists, Ashwani Gupta, Nissan’s Chief Operating Officer commented that these ambitions meant that the company would need to augment its existing production EV production at the plant in Smyrna, Tennessee with new capacity to build electric drive-trains at the neighbouring plant at Decherd.

Nissan is also looking for a second battery plant to complement its existing supplier Envision AESC, which also has a battery production facility in Smyrna. This might be the new plant that Envision AESC is building in South Carolina partly designed to serve BMW production at Spartanburg. Part of the logic behind these announcements as they affect the US is to manage the impact of the Inflation Reduction Act. This is designed to force companies such as Nissan to build both whole vehicles and components in the US rather than importing them.

What this example from Nissan illustrates is that the EV supply chain is being conceived of by large vehicle manufacturers within a similar architectural concept as the internal combustion supply chain, with the power-train production capacity neighboring the assembly facility. Presumably this means that the types of logistics services that Nissan will require will not be too different either, with capabilities such sequencing and line-feed co-ordinating the flow of components into and around the assembly plant. Major components will be moved from the suppliers by road freight. The EV supply chain also looks remarkably local. How sustainable? This is a good question.


Logistics execs see a 2023 Recession as ‘Likely’ or ‘Certain’

  • Only 11% say manufacturing footprint in China is the same as before COVID
  • Execs see big benefits for Africa from Free Trade Agreement (AfCTA)
  • China & India rank top 2 of world’s 50 leading emerging markets

Nearly 70% of global logistics executives say they are bracing for recession amid higher costs, slowing demand, and ongoing supply chain disruption arising from China’s battle to contain COVID, Russia’s war in Ukraine, and the impact of climate change.

Ninety percent of the 750 industry professionals surveyed for the 2023 Agility Emerging Markets Logistics Index also say their shipping, storage and other logistics costs remain well above the pre-pandemic levels they were at in early 2020.

The Index  ̶  compiled by Ti Insights, leading analysis and research firm for the logistics industry  ̶   ranks China number one, however only 11% of respondents say their company’s manufacturing footprint is the same as before COVID.

“Carriers and shippers are feeling the effects of higher energy prices, tight labor markets and broader inflation even though freight rates have fallen and ports have cleared cargo backlogs,” said Agility Vice Chairman Tarek Sultan. “Three years after the start of the pandemic, there is still a lot of volatility in supply chains. Now there’s fresh uncertainty as consumers and businesses pull back on spending and hiring.”

“It is not possible to overstate the challenges faced by emerging markets countries in the past couple of years,” said Prof. John Manners-Bell, founder of Ti Insights and data platform GSCi. “Geo-political tensions have combined with financial uncertainty and the lingering effects of the pandemic to create an ever more complex business and investment environment. The role that the Agility Emerging Market Logistics Index plays in providing insight into this volatile and uncertain environment landscape is more critical than ever.”

The survey and Index are Agility’s and Ti Insight’s 14th annual snapshot of industry sentiment and ranking of the world’s 50 leading emerging markets. The Index ranks countries for overall competitiveness based on their logistics strengths, business climates and digital readiness — factors that make them attractive to logistics providers, freight forwarders, air and ocean carriers, distributors and investors.

China and India, the world’s two largest countries, held their spots at No. 1 and 2 in the overall rankings. UAE, Malaysia, Indonesia, Saudi Arabia, Qatar, Thailand, Mexico and Vietnam rounded out the top 10. Turkey, No. 10 in 2022, dropped to 11th. No. 24 South Africa and 25 Kenya were highest among countries in Sub-Saharan Africa.

Arabian Gulf countries – UAE, Qatar, Saudi Arabia and Oman — again offered the best business conditions. Malaysia, with the 4th best environment for business, was the only non-Gulf country in the top 5.

China and India were tops for domestic and international logistics. India jumped four spots to No. 1 in digital readiness, followed by UAE, China, Malaysia and Qatar.

Farther down, there was more volatility in the rankings than in any prior year of the Index.  Conflict, sanctions, political tumult, economic missteps and continued COVID fallout damaged the competitiveness of Ukraine, Iran, Russia, Colombia, Paraguay and others. Among countries leaping forward in certain categories: Bangladesh, Pakistan, Jordan, Sri Lanka and Ghana.

2023 Index Highlights


  • Net-Zero – 53% of logistics executives say their companies have committed to net-zero emissions, and another 6.1% say their businesses have achieved net-zero.
  • Climate Change – Half say climate change is a concern their businesses must plan for, while another 18% say it is already affecting them.
  • Emerging Markets – 55% say they will be more aggressive in emerging markets expansion and investing or leave their existing plans untouched despite fears of recession.
  • Digital Forwarding – Respondents say the biggest advantage is improved tracking and visibility; the biggest disadvantage is error/exception management.
  • Ukraine – 97% indicate that their businesses have been hurt by higher costs or other supply chain challenges as a result of the Russia-Ukraine conflict.
  • China – There is an even split between companies planning to reduce their reliance on Chinese sourcing and those planning to expand in China. But only 11% of respondents say their company’s manufacturing footprint is the same as before COVID.
  • Gulf Economies – Innovation, technology and good conditions for small businesses are seen as the most important factors in lessening Gulf countries’ reliance on oil and gas.
  • Africa – Logistics executives see big benefits for Africa from the African Continental Free Trade Agreement (AfCTA), despite slow implementation.


  • In the Middle East and North Africa, overall rankings were: UAE (3); Saudi Arabia (6); Qatar (7); Turkey (11); Oman (12); Bahrain (14); Kuwait (15); Jordan (16); Morocco (20); Egypt (21); Tunisia (32); Lebanon (33); Iran (36); Algeria (41); Libya (50).
  • Rankings in Sub-Saharan Africa: South Africa (24); Kenya (25); Ghana (29); Nigeria (34); Tanzania (37); Uganda (43); Ethiopia (45); Mozambique (46); Angola (48).
  • Overall Index rankings in Asia: China (1); India (2); Malaysia (4); Indonesia (5); Thailand (8); Vietnam (10); Philippines (18); Kazakhstan (22); Pakistan (26); Sri Lanka (30); Bangladesh (35); Cambodia (38); Myanmar (49).
  • Rankings for Latin America: Mexico (9); Chile (13); Brazil (19); Uruguay (23); Peru (27); Colombia (28); Argentina (31); Ecuador (39); Paraguay (40); Bolivia (44); Venezuela (47).
  • In Europe: Russia (17); Ukraine (42).
Amazon Sheds Staff but not so much in Logistics

Amazon Sheds Staff but not so much in Logistics

Amazon is reducing the size of its workforce by 18,000 people. Widely reported in the press but apparently not formerly reported to investors, the e-retailer’s CEO, Andy Jassy, seems to have made the announcement in a blog post to his staff. He stated that the planning review for the year had “been more difficult given the uncertain economy and that we’ve hired rapidly over the last several years. In November, we communicated the hard decision to eliminate a number of positions across our Devices and Books businesses….Between the reductions we made in November and the ones we’re sharing today, we plan to eliminate just over 18,000 roles”.

As Andy Jassy mentioned, Amazon had already indicated in November that it needed to reduce its head count by around 10,000 due to under utilization of capacity. However, the present message is not just more pessimistic in terms of the number of people who will lose their jobs but also focusses on parts of the business other than the logistics infrastructure. It seems that most of the job losses will be Amazon Stores, the ‘People, Experience, and Technology’ organization and the ‘Devices and Books business’. The clear indication is that Amazon had hired too many people.

However, from the perspective of logistics, this consolidation should not be over-done. Although Amazon has been rationalizing some of its networks and even selling-off some property, it is still expanding its fulfilment centres and transport resources. Indeed, it is noticeable that Andy Jassy does not mention logistics in his identification of parts of the business that will lose staff. Perhaps as far as logistics is concerned, it is more accurate to suggest that Amazon is re-calibrating its rate of expansion.

What is clear is that activity in the e-retail sector generally has fallen back, with FedEx’s CEO estimating that online retail spending in the US has fallen from a height of 22% in 2021 to around 18% of total retail spending. It appears that Amazon is able to absorb this, with organic growth sustaining asset utilization in its logistics infrastructure. However, others might not be so lucky.

india's logistics

India’s National Logistics Policy: What Next?

An overview of India’s National Logistics Policy. Why, What and Next Steps. By Raghu Ramachandran, Business Analyst and Founding Partner of 13 Colony Global.

“At a time when the opportunity exists to be an alternative to the Chinese market, India requires a government more attentive to the country’s infrastructure needs and active deregulation to encourage Foreign Direct Investment (FDI) for the economy to grow at projected pre-pandemic rates in the near future. Only a nationwide structural – including labor and licensing – and consistent long-term reforms, along with spending on infrastructure will attract investments into India.”

This excerpt was taken from a whitepaper, written[1] in November 2020, discussing the Indian Logistics Market which was coming up for air after the pandemic induced shutdown of March 2020.

I quote this as a pre-amble to the National Logistics Policy of India – outlined as a need to reduce logistics costs by the finance minister in her 2020 budget – that was unveiled in September 2022.

Over the past several years (pre-pandemic), the Indian Government rolled out a series of measures starting with a nationwide Goods & Services Tax (GST) and electronic waybill for transportation providers who crossed state borders, which reduced corruption and expedited transit times. Along with those, doors were opened for additional funding including foreign direct investment for the logistics industry, by highlighting its dependence on basic infrastructure.

In 2017 a Logistics division was formed within the Department of Commerce, with an explicit mandate to develop an “integrated logistics sector.” This meant policy changes, improvement in existing procedures, identification of bottlenecks and gaps, and the introduction of technology in this sector. There have been sector specific development initiatives introduced for roads, highways, ports, and better air connectivity.

In the past year the federal government rolled out a master plan (Gati Shakti) to reverse the chronic delays and abandonment of major infrastructure projects by coordinating the development and rollout of them across different departments and in collaboration with the states. All these reforms – fiscal and process – laid the foundation for the roll out of the National Logistics Policy.

A key catalyst is the post Covid re-alignment of the supply chain and the very real possibility that India would be left behind the Southeast Asian countries as most manufacturers and multi-nationals moved towards a China+1 strategy. An ambitious multi step approach to reduce the logistics costs and improve India’s logistics performance index ranking to those of the developed countries was the basis for a logistics policy. While most developed countries have a low logistics cost to GDP ratio, the Indian costs have been in the 14 to 18% range for years.

The Indian government provided several incentives for increasing manufacturing and invested in road, air, and port infrastructure. However, with a lack of a coordinated end-to-end supply chain and logistics perspective, and the siloed investments, there remained huge challenges and increasing costs for the growing number of multinationals who had established operations to meet the Indian consumer’s needs.

Apple, with its global supply chain, is increasing its manufacturing outside China, and with India being an untapped market, saw it fit to expand operations in country. Auto manufacturers from Japan and Korea started this trend years earlier, and along with them, the parts suppliers. The early entrants improvised their logistics while the more recent manufacturers like Mercedes seek to reinvigorate the supply chain network to developed country standards.

While the pandemic exposed the challenges with cross border just-in-time replenishment, India faced an internal challenge with a supply chain network on different technology and communication platforms with minimal integration. The comprehensive plan of the recently unveiled logistics policy was influenced by the Confederation of Indian Industry’s (CII) strategic vision and key enablers for a successful logistics sector.

The main thrust of the plan is to provide a unified digital platform that the logistics sector can leverage and ease the processes for manufacturers including exporters and importers. The objective is to ensure end-to-end visibility to all parties and reduce inefficiencies. A forum through an ease of logistics services (e-logs) platform is also part of the plan ensuring that any operational issues are flagged for government agencies to resolve.

Besides the digital thrust, the logistics plan addresses, and encourages leveraging an integrated multi-modal network. A greater emphasis is placed on a shift and an increased use of an underutilized rail network, built with an emphasis on passenger transport and less for freight movement. Along with rail, inland water transport, coastal shipping, and use of pipelines to move bulk liquid is also part of the plan.

Along with transport, specific plans to meet the needs of 15 of the largest users of transport and logistics are being addressed with an effort to build a national grid of multi-modal logistics parks, with private investments taking the lead, around the key manufacturing and port locations. In sync with the logistics parks, standards, and guidelines – including clearances, for the expansion and development of warehousing industry and a system to rank and rate them – the plan also seeks to ensure there is an adequate pipeline of skilled resources to achieve the reduction in logistics costs and improvement of the LPI rank.

To paraphrase, the logistics plan is composed of

  1. Unified digital platform
  2. Integrated multi-modal network with an emphasis on using rail, inland ports etc.
  3. Standardization of physical assets including warehousing and containers
  4. Supply Chain Skills development

While there is uniform appreciation for the logistics plan, the challenge remains in the execution and rollout of the policies. The Indian logistics market suffers from mediocrity in comparison to the markets they compete with for attracting suppliers and manufacturers. The average turnaround time of the Indian ports is 20 to 40 hours behind the global average and the existing port infrastructure, not to mention the inland port structure, must be upgraded.

The business structure of the railroad is geared towards passengers and unless more freight corridors with greater high value goods, rather than bulk commodity cargo, and better transit times are established, they will continue to lag the fragmented road freight market. Only around 25% of freight, almost all bulk commodity, moves via rail currently. For an institution for whom customer experience has never been a priority, the Indian Railways needs to be fast, reliable, and flexible to accommodate the enterprise customers.

Admittedly it is difficult to assess the impact of Gati Shakti, Bharatmala, Sagarmala and myriad other efforts related to streamlining Infrastructure and lowering the logistics costs as a % of GDP. However, the combination and coordinated execution of these policies while removing bureaucratic hurdles is the key to a successful implementation of the National Logistics Plan[2].

[1] Economy, e-commerce, Growth: The Indian Logistics Sector, Sept 2020 Raghu Ramachandran, 13 Colony Global

[2] The information in this brief was gathered from Government Press releases, briefing documents, news articles


Mounting Signs of Economic Slowdown Affecting the Global Logistics Market

According to the IMF, the global economy continues to face steep challenges. The anticipated 2023 slowdown will affect many economies, with countries accounting for one-third of the global economy poised to contract in 2023. The global logistics sector will not evade the downturn.

According to Bloomberg Intelligence’s 2023 outlook for North American truck and rail companies, boom times are coming to an end as cooling economic activity and demand are expected to dent growth in 2023. According to accountancy firm BDO this week, mergers and acquisitions in the UK logistics sector have declined for the third successive quarter amid fragile market conditions.

FedEx Freight confirmed last week that it is bringing in furloughs in some US markets. The move is due to ‘current business conditions impacting volumes’. Parent company FedEx has been cutting costs in anticipation of reduced demand for the next several quarters. FedEx reported that US deliveries were down by around 10% in the three months from June to August 2022 compared with a year earlier.

Also, this week, Amazon is reported to be planning the largest layoff in company history, cutting around 10,000 jobs. The job cuts will mostly be from its devices business, but the company is also planning major cuts to its retail division. Amazon has recently scaled back its logistics operations in recent months, delaying or closing more than 60 warehouses. This may have a knock-on effect on Amazon Freight, a third-party logistics operation that in the UK and Europe runs a network of 6,500 trailers and 13,000 carrier partners.

Shipping container platform Container xChange reported this week that recession and excess inventory has seen shipping prices fall and ports are now clogged with empty containers. The company blamed a decline in consumption at a time when retailers have an excess of inventory. Container freight volumes at the largest US ports were down 3.8% in September 2022 compared to the same month in 2021. The total volume of loaded containers handled by nine major ports amounted to 2.67m TEUs in September 2022, down from 2.77m in September 2021 and 2.85m in September 2020.

Global air freight traffic fell 10.6% year on year in September 2022, causing a corresponding reduction in freight rates. The September figures published by the International Air Transport Association (IATA) confirm that the slowdown in air freight activity is continuing. Global air freight volumes were down 10.6% on their September 2021 total at 20.33bn ton-kilometres overall and 10.6% down, too, in the purely international sector.

In October, DSV, a leading freight forwarder, reported a ‘reduced growth rate’ for its airfreight business in the third quarter as rates declined and consumer demand dropped amid economic uncertainty. Also in November, DPDHL reported that global demand for freight has started to slip and ‘there is no longer any doubt that the world economy is facing difficult times’. Freight volumes fell 12% in DHL Global Forwarding’s air freight business in the third quarter, while sea freight volumes were down 9%.

It is clear that we are entering a period of economic slowdown, with headcount and assets being trimmed to match demand. Those companies with flexible business models will no doubt fare better than most. How long the economic malaise will last remains to be seen.


Air Freight Tracker Q4 2022: When the US Recovers, Air Freight Rates will Recover

The balance of supply and demand in early 2023 will be a mix of mediocre or flat demand combined with strengthening supply, according to Ti Insight in its latest data report – Air Freight Tracker Q4 2022.

In 2023 freight rates will continue to weaken and this will end when the American consumer decides, according to data from Ti Insight’s knowledge platform GSCI, featured in its latest report – Air Freight Tracker Q4 2022 – which takes an in-depth look at the demand drivers of air freight, from a muted consumer economy in the US to Asia-Pacific production.

The extraordinary conditions of the past two and half years have ended, with the notable exception of China. However, the effects of the policies remain in the form of inflation that has resulted in higher interest rates and higher prices.

Key findings & data from GSCI:

–        The US consumer: The way that US consumer demand moves will have a disproportionately high impact on air freight demand, especially in Q3-Q4 2023. Internet-retail volumes in markets such as the US have fallen-back noticeably, affecting both the domestic and international operations of the big air express companies.

–        Inventory: In both electronics and US retail, inventory levels have increased over the past several quarters. In container shipping the so called ‘peak season’ failed to arrive, with demand flatish in Q3 and Q4. This is a strong signal that retailers perceive that their inventory levels are at least adequate and possibly too high- going into Christmas. This is a strong signal that air freight rates will be under downward pressure in Q4 2022 to at least Q1 2023, and very probably following quarters.

–        Asia-Pacific production: The forecast for demand from semiconductor manufacturers suggests that demand will fall between 10-15% year-on-year in Q4 2023. This represents a marked slowing from the perceived wider market trends at the beginning of the year. The result is a much weaker air freight demand environment, especially across and around the Pacific.

–        China & its COVID policies: China’s COVID policies are continuing to depress activity of all kinds, especially air transport. This reduces both the supply of and demand for air freight capacity. However, if China were to return to something like normality, then the implications for the wider global air freight market would be significant with renewed demand surging onto the market.

–        Passenger air travel: The appetite for passenger air travel is returning, yet in many regions the volume of air transport operations is not yet at 2019 levels. However, the trajectory looks promising and there is a real prospect that early 2023 will see the belly freight market returning to the very well supplied conditions seen previous to 2020.

–        Express carriers expand: All of the three large express carriers have expanded their fleets over the past two years, whilst airlines such as Emirates retain enlarged freighter capability. There have also been significant new entrants, such as Maersk and CMA CGM who have engaged substantial fleets of freighters. All of this suggests that the supply side will be very accommodative in 2023 and beyond.

–        Jet fuel: At present it might be tempting to assume that prices will remain high. However, they weakened noticeably through Q2-Q3 2022, so further weakening in the face of any recession in the US and low growth in China should not be ruled-out. Although the war in the Ukraine is perceived to have affected oil prices, the effects of this should not be exaggerated. Oil is more fungible than gas.



M&A in the E-commerce Logistics Landscape

With the boom in e-commerce post-pandemic, incumbent logistics players have been making mergers and acquisitions to improve their e-commerce offerings in a growing market.

Some of UPS’ most recent acquisitions are predominantly focused on strengthening UPS’ e-commerce last-mile services. For example, in May 2022 UPS acquired last-mile technology provider Delivery Solutions, a software-as-a-service delivery orchestration platform which enables retail omnichannel delivery options. According to UPS, Delivery Solutions’ leading technology helps merchants offer their customers more flexibility and an engaging online purchasing experience as they increasingly look for an experience-driven omnichannel strategy.

UPS also acquired Roadie, a technology platform that enables local same-day delivery with operations throughout the U.S., in 2021. Roadie often provides service for shipments not compatible with the UPS network because of their size and perishable nature, and often because they are in shopping bags without the packaging required to move through the UPS system.  The Roadie technology platform is purpose-built to connect merchants and consumers with contract drivers to enable efficient and scalable same-day local delivery services nationwide.

Similarly, DHL Supply Chain has set out to improve and scale its e-commerce fulfilment services through several acquisitions. In 2022, DHL acquired a majority stake in Monta, as well as a minority stake in Link Commerce.

DHL’s minority acquisition of Link Commerce expanded the company’s reach into Africa. Link Commerce offers a white-label solution for doing online-sales in emerging markets. Retailers can plug into the company’s e-commerce platform to create a web-based storefront that manages payments and logistics.  Through the acquisition, DHL hopes to build a broader client base globally using a business built in Africa. Sellers can also use the Link Commerce platform to create a web-based storefront that manages payments and logistics. This is particularly valuable to sellers looking to sell to African consumers as Link Commerce will handle the payment hurdles in the region, allowing US and UK sellers to grow and scale. In 2019, Link Commerce brought more than 200 US and US sellers online to African consumers in 34 countries. Link Commerce now functions for DHL under its e-commerce platform DHL Africa eShop.

Furthermore, DHL’s majority acquisition of Monta was intended to create a partnership to serve small and mid-sized webshops in e-fulfillment and online sales. Monta, located in Netherlands, has a workforce of 1,000 people and 14 fulfilment locations. At the time of its initial announcement of partnership with DHL, Monta served 1,500 SME e-sellers through a range of software-enabled fulfilment services and warehouse management software. Through this acquisition, DHL looks to widen its customer base to include more SMEs by utilising both Monta’s e-fulfilment capabilities and DHL’s existing international logistics infrastructure.

Overall, incumbents have been throwing money into acquisitions to gain market share of a rapid growing e-commerce vertical, but there are questions around whether this will continue into 2023.

There have been conflicting reports regarding whether M&A activity in the logistics sector has been slowing during 2022. According to BDO M&A activity in the UK, the largest e-commerce logistics market in Europe, significantly slowed in Q3 2022 as companies assessed the impact of the war and soaring inflation. Several sector bankers have also cautioned that logistics M&A is slowing significantly in the North America region. This has also seen reduced funding for e-commerce start-up companies, which incumbents often look at acquiring.

As the global economy enters a pronounced slowdown and inflation rises at historic rates, it remains to be seen whether M&A activity in this market will continue at the same pace as the beginning of the pandemic.


Are Freight Companies Working Towards Decarbonization?

The World Benchmark Alliance (WBA) published the Climate and Energy Benchmark on the Transport Sector two days ago. It analyses 90 companies, including 25 airlines, 17 shipping companies, nine rail operators, six road transport firms and 33 multimodal companies.

The WBA assesses and ranks high-emitting companies on critical issues supporting decarbonization and the energy transition. The report examines current and future decarbonization plans and their past and present performance to determine their alignment with the Paris Agreement goal of limiting global warming to 1.5° Celsius and their contributions to a low-carbon transition.

According to the assessment, 85% of the companies have fleets that will be unable to operate in a low-carbon future, and only 7% of the companies have publicly stated plans to phase out fossil-fuel-powered modes of transportation.

The report says: “Investment in R&D is critical to ensuring that new technologies can come to market more quickly, as is working in partnership with suppliers and developers such as vehicle manufacturers or fuel producers. However, 94% of companies do not provide any meaningful data on research and development into low-carbon vehicles and fuels.” It adds: “A few companies are using their influence to push for infrastructure solutions, improved climate policy, or customer behavior change.”

Aside from decarbonization, the study looked at the implications for workers and customers as a component of ensuring a low-carbon transition that leaves no one behind. The 90 transport companies employ an estimated 9.6m people worldwide, but only 43% have a publicly available policy statement to protect their workers’ health and safety. Furthermore, only three companies provide quantitative data on worker health and safety.

Nonetheless, some businesses stand out as examples of good practice. Maersk is one of the few companies that has made it a policy to work with trade associations on climate issues. It reviews its membership status annually to ensure that its trade associations comply with the Paris Agreement.

According to the benchmarking, some solutions that transportation operators will need to implement, such as alternative fuels and cleaner vehicles, are still in the early stages of development.

Despite the challenging landscape described by the WBA’s Climate and Energy Benchmark, some decarbonization initiatives are being implemented gradually.

For instance, in June 2021, the International Maritime Organization (IMO) adopted a series of agreements on regulations around the “carbon intensity” of shipping. More details and adopted strategies can be found in Ti’s Logistics & Supply Chain Sustainability Report 2021.

Another recent example is the Green Corridor to support sustainable shipping. The Memorandum of Understanding (MoU) was signed by the Port Authorities of Rotterdam and Gothenburg last week.

The ports will use the agreement to strengthen their ongoing collaboration on decarbonization and digitalization. In addition, it will establish a common framework for cooperation as part of the Green Corridor initiative to promote the use of alternative fuels to meet the Paris Agreement’s goals.

However, as well illustrated by the WBA’s key findings, engaging people in the transition requires a concerted effort, and a lack of action by companies could jeopardize the low-carbon transition’s success.

For more in depth information, download the Logistics & Supply Chain Sustainability Report 2021. The report addresses the impact of Covid-19 on the race to decarbonize. It examines the current impact of road, air and sea freight on environmental targets and the measures each market must adopt to reach net zero. It also contains a breakdown of the findings of the Ti and Foundation for Future Supply Chain’s 2021 Sustainability survey and comparative environmental profiles for leading logistics providers.

Supply chain strategists can use GSCi – Ti’s online data platform – to identify opportunities for growth, support strategic decisions, help them stay abreast of industry trends and development, as well as understand future impacts on the industry.

Visit GSCI subscription to sign up today or contact: Michael Clover for a free demonstration: | +44 (0) 1666 519907


Inventory Levels Surge as Demand Drops Away

As an increasing number of listed companies release their quarterly results, the full effects of the global slowdown are becoming clear. Whilst a minority of companies – especially in the automotive sector – are still plagued by shortages, most are struggling to clear bloated stocks caused by over-ordering.

Sportswear manufacturer Nike has been the latest to report slowing demand for many of its lines which has led to its inventories increasing by 44%, according to Reuters. Investors worry that to clear this stock there will be a program of mark downs and this, combined with a slowdown in discretionary spend by customers, will result in lower margins. This is also a problem for US retailer, Bed Bath & Beyond. Its gross margin was affected by an accelerated inventory clearance, whilst it also had to contend with an increase in port fees due to the levels of congestion still being experienced.

The yo-yoing inventory levels in the retail sector – both in the US and Europe – have been caused by the classic ‘whiplash’ effect of under-ordering, leading to amplified shortages throughout the supply chain, followed by over-compensation. As a result of the lag between placing the orders and their delivery – several months later – products are piling up even as inflation and interest rate rises cause demand to fade. Inflexible sourcing practices have failed to keep pace with the market. As Richard Hayne, CEO of Urban Outfitters, put it, ‘We got hit by what I guess I would call a ‘sonic boom’ of inventory because we had tried to make earlier and earlier purchases.’

In the consumer electronics sector, weakening global markets have led Apple to tell its suppliers to reduce production volumes of its iPhone14 with implications throughout its supply chain, not least for semiconductor manufacturers. The global demand constraints will be sector-wide and as Nabila Popal, research director at IDC, commented, “High inventory in channels and low demand with no signs of immediate recovery has OEMs panicking and cutting their orders drastically for 2022.” Upstream implications are exemplified by statements from two chip manufacturers: Micron said that it was reducing its capital investment in production in 2023 by 30% and Kioxia (formerly Toshiba Memory) stated that it was also adjusting down production by around 30%. The glut of chips – in some sectors of the market at any rate – is expected to lead to a 15-20% cut in pricing.

The situation in the automotive sector is rather more complicated. Whilst finished vehicle production has been impacted by the same whiplash effects as seen in other industries, many companies are still seeing supply chain shortages, especially of semiconductors. Part of the reason for this is the long lead time taken to design and build chips to meet regulated and certified industry standards. The longer design cycles mean that older style chips are typically used which have lower margins for the chip manufacturers. Hence there is little incentive for them to prioritize their production over more lucrative, faster speed chips. That being said, some auto companies have one a better job at sourcing sufficient chips than others. Mercedes, Volkswagen, Hyundai, BMW and Volvo all say that the problems are in the process of being resolved. Others such as General Motors, Ford, Honda and Bosch (a tier 1 supplier) see shortages continuing into 2023.