Logistics industry predictions
The logistics industry has been hit particularly hard by the latest economic downturn, especially in the Eurozone, which has been slow to recover. Simply put, people are buying less, so they are shipping less. This has led to changes in the logistics industry that are unlikely to ‘change back’ even when the global economy recovers completely.
Key operating costs, especially fuel, will continue to rise for the foreseeable future. Lowered birth rates in the western economic sphere add to the trend of increasing labour costs. Labour shortages will become a greater problem over the next 10 years, with the price of labour in the road transport industry set to rise by almost 50% in that time according to many studies.
Thankfully DMG Freight Services have recognised the changes in the market and have put provisions in place to ensure our customers do not pay the price of the current changes . If you require freight forwarding services for your commercial goods then contact www.dmg-freight.com today to see how we can save you time and money.
The only way forward is to increase profitability in those areas that can still be made more efficient
In the short term, some organisations are seeking to effectively increase the scale (and thereby the efficiency) of their operations by participating in partnerships or joining cooperative networks. Others are attempting to enter new markets or emphasising premium services.
In the long term, fuel price rises will force all parts of the logistics industry, but land freight carriers in particular to reduce energy use. Key advances will be needed in green fuels and more efficient vehicles. It will be more efficient to utilise rail transport for part of a shipment’s journey. Over the road freight may once more become mostly from warehouse to rail station and from station to destination.
The shift to larger, more efficient deliveries will likely be countered by the retail and manufacturing industries shifting to a low-inventory model for their own efficiency, and demanding smaller and more frequent deliveries.
All factors combined suggest that the cost of overland shipping will rise sharply in the next decade, and those who can improve their efficiency will be able to maintain higher margins.