Manufacturers and retailers that rebounded from the global recession are cautious about making large investments due to the risks and uncertainties that lie ahead. These risks aren’t only in the form of economic uncertainty, but also involve government regulations, compliance and cargo security. How logistics providers tackled these issues separates those that have a sustainable business model from those that can’t adapt to the changing landscape. Companies that maintained their key talent, streamlined operations, expanded market share and invested in sales and technology during the financial crisis now are posting record profits.
Collaboration with suppliers and service providers is becoming paramount to strategic global supply chains. Instead of worrying only about cost, product quality and service reliability in their supply chains, many manufacturers are thinking about other global risks, such as labor, safety, security and international conflicts.
All the service sectors will be challenged in different ways. The air freight industry is moving toward increased regulation and the possibility of 100 percent cargo screening for freighter aircraft following October’s terrorism scare. How the industry reacts to increased government oversight will define our future. Ocean carriers will rationalize services and slow-steam their vessels.
The ground transportation industry will face safety and capacity challenges. The Comprehensive Safety Analysis 2010 will ensure safety remains a top priority, but it will have a negative impact on capacity and driver recruitment. In addition, drayage companies will have to respond to clean-air initiatives in ports nationwide after the successful implementation of the Los Angeles-Long Beach initiatives.
Importers and exporters will need to evaluate and scrutinize their service providers as never before. They will need to look beyond rates and proposed service offerings. Selecting the right logistics provider with depth and a global infrastructure could be more important than ever.