The supply chain management industry has been getting a boost, as more logistics companies look for more efficient technology and cheaper means of freighting.
According to market watchers, the global economic downturn has cut the bottomlines of many logistics firms by about 30 per cent in the last year as export traffic slowed.
Some of these firms have been turning to supply chain management services as a solution.
Richard Owens, CEO, Global Customer Solutions, DHL, said: “We have been very involved and we have seen the demand for services rise more than 100 per cent in the projects that we have done.
“They (logistics companies) see this is as a way to refine their processes, take cost out, and refine their mode of transportation. We are now seeing companies that haven’t used anything but air freight … now looking at sea freight.”
While other industries may be taking a breather, logistics firms are seeing potential business growth from the IT and biomedical industry – with more patents coming online and companies looking for more innovative product offerings to lure in consumers. Such growth is also seen to be raising demand for supply chain management services.
For logistics firms, experts said that they need to think longer term because of the evolving landscape and changing customer demands.
“Well, the landscape needs to change, logistics companies need to be more innovative, and of course it needs to change from the demand of customers of logistics companies,” said Rod Strata, industry principal, Transportation & Logistics, SAP.
“Because in many cases logistics companies are the architects of global trade, what we will see is different offerings. We will see some logistics companies transform with much greater service offerings which will transform their profit margins to double-digit growth going forward,” he added.
According to experts, some upcoming trends which logistics firms need to be mindful of going forward, are climate change, as customers demand lower carbon routes. Global developments, such as China’s increasing position as a technological leader, could also alter trade flows.