Thursday, December 8, 2011

The future of Logistics

According to a report by Mckinsey&Co, the coming decade will be dominated by growth in logistics. According to the report, around 80 percent of goods in the world will be manufactured in a country different from where they are consumed. The current figure is 20 per cent, which means a potential four-fold growth in shipping volumes in just ten years. Logistics is the sector on which the global economy will increasingly rely. It also means that logistics will no longer be a mere facilitator of economic growth, but will increasingly drive the direction of economic development.

On one side of the balance we have developing countries like India and China, which will continue their export-driven growth with a substantial improvement in infrastructure, where as on the other side growth in the developed countries will be driven by continuous process-integration, greater technological advancements and  environmental friendly ways of getting products to desired destinations.

The goals of the logistics industry is clear : deliver faster, deliver more, deliver further and ultimately deliver cleaner.There is also the other challenge facing logistics providers, to deliver better – when required, wherever it is required, with complete end-to-end management.

The eastward shift in the focus of logistics company's principal operations is not just because of exports but also due to increase in consumption because of rising GDP's and increased household expenditure. As the developing world looks seeks more cost effective solutions to facilitate international shipments, third party logistics will come to the fore. This will require increased collaboration between the logistics operation and the company.
The element to affect logistics considerably, in the next decade is the ongoing advance of technology. “As outsourcing creates greater integration between clients and logistics companies, systems will need to offer seamless transactions,” says Iyad Kamal, “especially as online, mobile, and other auxiliary technologies converge.” In practice, this will mean logistics providers will have to offer an IT infrastructure that offers their customers instant access to information. Also, GPS will take the forefront in tracking, reducing order cycle time.
 Moreover, the logistics industry needs to come up with greener solutions in order to become sustainable. Not only will customers be making more informed choices based on sustainability, but carbon reduction is likely to a legal requirement in the next decade. In logistics this will mean use of hybrid vehicles; as companies such as Aramex has done with the introduction of the Toyota Prius cars in Amman, Jordan. It will also mean better use of public transport.

Most importantly of all, though, the logistics industry won’t simply at the receiving end of business development in the next ten years, it will be in a prime position to drive it. Logistics can dramatically impact the global economy, remaining at the forefront of technological advancement and sustainable practices.

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