Financial and economic turmoil has cast dark clouds over the global trading landscape. The entire supply chain will be under pressure in 2009, and the logistics sector’s evolution could be quite profoundly affected.
As shippers buckle down, “doing more for less” will be a mantra for logistics service providers. We will be tasked with injecting more value into already lean and efficient supply chains. Cost-cutting and process re-engineering aimed at conserving scarce resources will come into even sharper focus in 2009.
Slowing demand will see inventory fulfillment strategies built around smaller and more frequent shipments. Time-definite services are well matched to this market need.
We also expect more origin diversification for product sourcing particularly as southern China’s potency as the world’s factory moderates. More production will migrate to North China and to highly capable neighbors such as Vietnam. India’s production capability also will continue to rise, and Indonesia’s resurgence could continue.
The winners will seamlessly integrate these shifts into their networks and the pallet of services they offer.
Shippers and logistics operators must think strategically and work collaboratively during these tough times. They can then emerge stronger when the market turns, equipped to mine what will likely be a rich vein of opportunities.