Global Logistics Market rising optimism

According to the latest results of Transport Intelligence Global Logistics Business Confidence Index, it has shown a significant return of optimism to the market.  Although the index weakened slightly in April from +1.05 to -4.43, there was far more positive sentiment about the future. Overall, the index assessing confidence in the state of the market in twelve months time moved from a score of -26 in February to +4 in April. This contrasts strongly with the results in February and March when respondents expressed overwhelmingly negative expectations of the future. One of the key findings shows that logistics service providers are more optimistic than shippers. Given that manufacturers/retailers will have a better idea of order books and production schedules than their suppliers, the bounce back may not be as strong as some hope.

High growth forecast for China logistics industry

The new China Logistics Industry Report, 2008-2009 states that the development of China’s logistics industry in 2008 can be divided into two periods, rapid growth and decline. Rapid growth period: the total value of social logistics achieved a fast growth of 26.7% in the first three quarters of 2008. With the further influences of global financial crisis in 2009, China’s logistics industry will step in the period of slow growth and structural adjustment, which will create new development opportunities for the third-party logistics. Third-party logistics in China is still in its early development stage, and has a high regional concentration degree, mainly distributing in the regions of YRD and PRD. The Chinese manufacturers seldom select third-party logistics companies, while the foreign-funded manufacturers prefer the third-party logistics companies.

Companies Need More Supply Chain Visibility and Control

Companies don’t have nearly enough control and visibility over their network-wide supply chain operations and metrics.  That’s the major conclusion of a recent survey by The Aberdeen Group. In its report, “Integrated Demand-Supply Networks: Five Steps to Gaining Visibility and Control,” 71 percent of the participants 126 companies surveyed in February and March of this year indicated there were at least two supply chain tiers between them and their customers. According to Aberdeen’s survey report, this fact, along with the complexities of a growing global market, are contributing to a lack of visibility and control for supply chain managers. The survey indicates respondents and their companies were broken down into three categories: Best-In-Class, Industry Average and Laggards. Among other survey results, Aberdeen said Best-In-Class companies are more likely to have decreased the frequency of out-of-stocks, international lead times, and finished goods inventory over the past year than Industry Average or Laggard companies.

2008/2009 Employment Market Survey by Logistics Executive

Logistics Executive Recruitment is conducting it annual survey and would like to invite professionals in the industry to participate in the 2008-2009 Global Employment Market Survey. The survey will take 5-7 minutes to complete and your answers will remain completely anonymous. You will only be required to identify yourself if you wish to receive a complimentary copy of the final survey results. Your responses will not be directly linked to you as an individual. http://survey.logisticsrecruitment.com.au/display.php?s=901099c226b520248&inv=367128

Has logistics sector downturn hit the bottom?

There are a few signs that the downward cycle currently being experienced by the global freight and wider logistics industry may be coming to an end. That is not to say that a recovery is due any time soon, just that the bottom of the trough may have been reached. Over the past few weeks a number of positive stories have emerged, which although providing only anecdotal evidence may give a welcome boost to confidence in the industry such as media reports suggesting that container rates in Asia-Europe trades are increasing, as the capacity which shipping lines have taken out of their fleets has finally had an impact. China, which was an important driver of growth in the industry right up until the last quarter of 2008, has also seen encouraging signs. Better than expected economic and export growth figures suggest that the stimulus package announced by the Chinese authorities has started to work. Chinese domestic airfreight is also believed to be picking up. While it may be premature to announce the start of the economic upturn but there is an increasing body of evidence to suggest that the downturn is approaching its nadir.

China’s logistics industry being rationalised

China is undertaking a series of measures to spur its logistics industry, which has such importance to the national economy. Although it was thought worldwide that China met the challenge of last year’s snowstorm pretty well many commentators suggest that under the heavy weight of snow and sleet, the seemingly strong logistics system ground to a halt. Policy-makers have learned a lesson from the transport crunch. The State Council has devised a revitalization program for the next three years in an effort to make the transport system more efficient, and more importantly, boost the entire logistics industry. It is the first time the government has created such a major package, laying out long-term goals for the industry. And analysts say it could serve as a curtain raiser for future policies in the sector.

RFID Market Still Shows Growth

Analysis from ABI Research shows that the RFID market is growing despite the downturn in the economy. ABI’s report, RFID Annual Market Overview, contends that in 2009, the total revenue earned from RFID transponders, readers, software and services will amount to more than $5.6 billion. The study identifies that some companies are reducing or moth-balling some projects, but overall the market is still growing. The ABI study highlights that RFID technology is the best option for cost savings in the supply chain for businesses. This assumption is only valid if vendors of RFID technology persuade customers that the cost of implementation will give them significant long-term benefits. If the current economic downturn continues past 2009 or if global conditions worsen, businesses may forego new technology if the benefits are not as quantifiable as vendors promise.

Hiring Expectations report by Hudson

According to The Hudson Report, China continues to report the highest expectations, with 30% forecasting headcount growth this quarter but the proportion of respondents expecting to cut staff has risen from 8% in Q1 2009 to 21%. Hong Kong expectations to hire are lowest since The Hudson Report began in Q4 1998, to just 14% this quarter. Singapore expectations are also falling less sharply than in recent quarters: 20% will grow headcount in Q2 2009 compared with 23% the previous quarter. Around half of the employers surveyed in all four markets have cut HR-related costs in the last six months. Reducing headcount is the most widely implemented cost-cutting initiative, followed by lower bonus payments.

Ernst & Young releases report on supply chain management

Ernst & Young has released a report, Global Supply Chain: Balancing Cost Reduction and Performance Improvement, which includes responses from 250 supply executives from global companies. Ernst & Young assert that the slower economy demands increased supply chain efficiency. Cost reduction is an essential agenda item for senior executives, explains Ernst & Young, noting that pressure to improve performance originates in profitability, globalization and other factors. Survey results indicate a divide between what executives require of their supply chains and what they see being delivered. More than 60% of respondents report supply chains are expected to play a key role in building credibility with investors by positively impacting the bottom line. Only half of these respondents are confident that their supply chains are capable of managing the business issues associated with this role. The report continues with the statement that cost cutting alone will not provide growth opportunities. Cost reduction efforts succeed less than one-third of the time, Ernst & Young asserts. High-impact initiatives pay off quickly through cost-reduction efforts, and initiatives that optimize and transform the supply chain provide long-term growth and profitability.

China’s maritime sector

China’s maritime sector is growing from strength to strength. From securing a 5.5% share of world fleet (in DWT terms) in early 2004, it increased its share to 6.77% in early 2005 and has continued its surge subsequently. Maritime infrastructure in China continues to be developed at a breakneck pace in step with ever-increasing trade. Its ports are continuously expanding and engaging in strategic alliances to widen their connectivity. Underlining this tremendous growth, seven Chinese ports are in the list of the world’s top 20 container terminals. Mainland China-based COSCO and China Shipping are two of the world’s top ten container service operators in terms of fleet size and total shipboard capacity (TEUs). The growth of Chinese ports has displaced established ports like Kobe and Yokohama from the list of the world’s top twenty. Moreover, even Hong Kong, the world’s busiest port since 1992 and a beneficiary of the China boom, has been growing at a lower rate than Shanghai and Shenzhen, which experienced increased throughput more than threefold from 1999 to 2004.