Archive for the ‘Logistics’ Category

The state of European logistics – most trucks running at half capacity

March 9, 2009

When it comes to sustainability issues related to supply chain practices; two areas are often brought to the forefront as areas of opportunities: packaging and logistics. As for logistics, a recent report (Are Trucks Taking Their Toll) by Dutch environmental research consultancy CE Delft suggests that there is plenty of room for improvement in this area.

According to CE Delft; overall utilisation of the tonne-km capacity of an average truck (Heavy Goods Vehicle) is just about 45%, and most data show decreasing utilization numbers. In explaining this trend; CE Delft offers a few alternative scenarios:

  • Buyers with a high focus on just-in-time delivery
  • Logistics providers with focus on efficient time management rather than efficient transport

Seen from the buyer side, this thesis is confirmed by the recent logistics survey (in Swedish) conducted by the Swedish logistics operator Posten. More than 50 percent of the respondents Posten surveyed would not consider environmentally friendlier transports if these transports would cause delays or increase the time of delivery.

As with many questions relating to sustainability; responsibility is being shunned by the users, pushing the responsibility onto governments. The problem in Europe is that most logistics cross multiple borders and pushing the responsibility onto the EU and/or national governments is a sure fire way of burying an issue instead of dealing with the actual problem – which in this case if truck utilization. Efficient logistics is still a far way away; Swedish Minster of Transport Åsa Tortsensson hits the nail when she describes the state of European logistics in Svenska Dagbladet (in Swedish):

“There is not an efficient road or rail network through Europe; there are 27 national solutions.”

Posted in Logistics | 3 Comments »

Air Freight in Free Fall, Backing 22.6 percent in December 2008

January 29, 2009

Earlier today, The International Air Transport Association (IATA) released international scheduled traffic results for December 2008 (as well as the full year). And the results for December were not even close to what was expected.

“The 22.6% free fall in global cargo is unprecedented and shocking. There is no clearer description of the slowdown in world trade. Even in September 2001, when much of the global fleet was grounded, the decline was only 13.9%,” said Giovanni Bisignani, IATA’s Director General and CEO.”  Air cargo carries 35% of the value of goods traded internationally.

For the full year international cargo traffic was down 4.0 percent (as compared to the 4.3 percent growth of 2007). IATA accounts that the collapse in the airline industry’s freight business is a reflection of 20-30% declines in export and import volumes (which have been reported across Asia, North America and Europe).

In a forecast for 2009, IATA expect airlines/carriers to lose USD 2.5 billion and concluded that there is dire need form major structural changes to the industry. What this will mean to supply chain professionals is yet to be seen (Ariba’s Rachel Rutkoski recently posted on this subject on Supply Excellence), but ensuring that you’ve got your risks covered; especially when it comes to shipping/cargo/logistics; will be a must-do in everyone’s 2009 playbook.

Posted in Global trade, Logistics, Supply Chain Management | 1 Comment »

Who Wants a Green Supply Chain?

October 20, 2008

I think that all of us agree that environmental and sustainability initiatives have been front and center for many management teams in the last few years; but the question is how these inititatives will fare in the face of todays economic downturn.

A former colleague of mine used to say that green initiatives will be a non-issue in the future; I believe his view was that the market would find a common view on these issues and that the problem would solve itself, yet most reports on the issue all point in the same direction; green initiatives might be good for the planet, but as a business opportunity (or differentiator) it’s as good as a dead duck.

Take the results of the recent “2008 3PL Provider CEO Perspective” (a well researched short take on the report can be found WSJ MarketWatch. Although the 3PL industry has really taken up the gauntlet and established environmental responsibility as part of their corporate strategies few actually track any performance in the area and few (if any) of the CEO’s surveyed believe that the initiatives are significant in winning new business (or even retaining the existing customers).

But one interesting aspect of the findings is that many of the initiatives have come into focus not because the customers wanted it; instead many are primarily instigated from inside, as part of the companies corporate social responsibility initiatives.

The question is; especially in these times of economic downturn; will this trend have the perseverance to really reshape logistics (and other parts of the supply chain) or will customer demands for lower prices knock environmental issues down the corporate agenda. I; for one; hope that this will not happen and that the ethics and morality (as displayed by the urge for companies to establish CSR-agendas) will prevail over the short term goal of lower costs.

Posted in Business, green procurement, Logistics, Supply Chain Management | 2 Comments »

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