The future of TTS logistics

The opportunities and challenges of the future

The future of TTS logistics will be shaped by longer transport distances, intensifying competition and the development of new, innovative logistics concepts. Two issues of special significance are increasing globalization and the growing demands of important customer sectors. For instance, the automotive industry itself will set up innovative supply-chain structures and new manufacturing concepts, forcing logistics companies to take action. For this reason, successful, innovative logistics companies must be able to accept these developments or to take the initiative in order to gain valuable competitive edges.

Longer transport distances resulting from globalization

The logistics sector has been shaped in recent years by the spread of globalization. As a result of this development, the average length of transport distances has been growing longer and longer. In addition, logistics companies have been forced to follow customers who have employed offshoring strategies - that is, the relocation of production to far-off low-wage countries. In this process, the necessary route potential must be created. In addition, strategic, operational and legal issues are becoming increasingly complex. Actions like the European Union’s enlargement to the east are adding fuel to this development.
Particularly in the transport sector, longer transport distances and times are being created. In Eastern Europe, the sometimes poor infrastructure and service culture pose their own special challenges for transport companies - e.g., in the form of difficult customs clearing. The overall risk associated with a transport is growing. The changed geographic market structures are also forcing logistics-service providers to rethink their network strategies. Today, relocations from major logistics and transshipping centers in the Benelux countries to destinations in the east are already being undertaken.
As globalization spreads and competitive pressure grows with it, companies will also face demanding business-related requirements. They will have to avoid empty runs, to design schedules as efficiently as possible and to minimize transshipping frequency and times as well as personnel costs and damage to goods. All operational planning must be optimized, inventories reduced and administrative costs cut as much as possible. Amid all of this, the needs of customers must always be met - e.g., in terms of on-time service, delivery reliability, degree of service, low pricing, short order-processing times, flexibility, availability, capacity utilization and productivity. In recent years, the share of empty runs in long-distance shipping has been lowered by about 10 percent.
Furthermore, concerns about the environment have been growing for years now - and, in the process, an increasing aversion to environmentally damaging road transports has emerged. As a result, somewhat forgotten means of transport like inland waterway shipments are becoming increasingly attractive. The transport volume of inland goods shipments has risen 45 percent since the 1990s.

The situation of small and mid-sized companies

The world’s Top 100 logistics companies are growing by an average of 3.7 percent a year, nearly twice that of the entire market, and are squeezing out smaller competitors. The development is creating a major challenge for small and mid-sized companies. At the same time, such companies now have a good opportunity to offer unique, complex and holistic logistics packages in submarkets and niches.

Transport is more than shipping a product from Point A to Point B

New supply concepts like just in time and just in sequence put special demands on logistics. Just in time and just in sequence are concepts in which deliveries of one or several goods are performed at a precisely set time or in a particularly defined order.
As a result, the schedules of logistics-service providers are increasingly shaped by the customer’s production requirements. Even loading sequences and feasible transshipping capacities are determined by external needs.
At the same time that customers are placing increasing demands on logistics companies, the public desire for environmentally friendly technologies and processes is growing as well. The logistics sector is responding to this development by increasingly using combined transports. In this effort, the sector is turning to comparatively environmental friendly means of transport - e.g., in the form of rail shipments.

Recommended reading

Transport Logistics: Past, Present and Predictions | Baluch 2005

References

Die TOP 100 der Logistik | Klaus / Kille 2006
dhl - discover logistics - course - services - tts_future