February 2008 | News | Global Logistics

Global Logistics

No tags available

While many eyes remain fixed on Far East sourcing and offshoring activities, Central and Eastern European (CEE) countries are stealing glances as steady growth in logistics investment and development continues.

The logistics industry in CEE and Russia is expected to grow rapidly over the next five years, according to recent Datamonitor research, with nominal logistics and warehousing spend to reach $369 billion by 2012. This growth will primarily be driven by fast growing domestic markets as well as increasing commercial exports.

One area where funding and development remains rampant is the express and parcels business, reports the London-based think tank's Central and Eastern European Express Outlook report.

The CEE's $3-billion express and parcels market has grown rapidly as further consolidation increases competitiveness. The industry is expanding at a faster pace than Europe at large thanks to rapid investment in transportation and IT infrastructure.

Despite overwhelming promise, this transport niche still has some obstacles to overcome.

Notably, CEE and Russia's express/parcels market is characterized by considerable differences between countries in terms of industry verticals, levels of e-commerce and home deliveries, preferred service options, and degrees of development.

One market segment yet to reach full potential is the business-to-consumer (B2C) sector, which is one of the least developed in Europe. Cash-on-Delivery (COD) is still the norm, as the development of online and mobile payment solutions remains tenuous.

This is a problem in most CEE countries that also impacts cross-border B2C deliveries. Despite these problems, the popularity of e-commerce and rising domestic consumption is expected to make the B2C market sector a long-term growth driver.

Increasing investment in and development of transportation infrastructure across modes will also likely complicate the international side of the express market that is still dominated by integrators such as DHL, TNT, UPS, and FedEx.

Smaller providers with niche service and industry expertise are strengthening their positions and competing for more market share.

"The domestic markets are still predominantly controlled by the incumbent post offices and local players offering relatively cheap services," observes Erik van Baaren, Datamonitor express analyst and author of the study.

"However, as the CEE region's economies develop, and service quality and value-added services become more important selection criteria, this segment could become a more heavily contested marketplace."

Emirates SkyCargo has signed a memorandum of understanding (MoU) with Dubai customs as part of a global initiative to reduce paperwork and expedite the movement of goods in the air cargo supply chain.

The agreement supports greater use of electronic correspondence in transactions between the carrier, Dubai customs, and several other supply chain partners, which allows clearances to be electronically transmitted.

Additionally, the program allows importers and exporters to perform 51 customs transactions electronically without having to physically visit customs centers.

The new electronic environment provides shipment monitoring and tracking from country of origin through all destinations en route to Dubai.

"Such an initiative, when fully implemented, will allow a more fluid flow of legitimate goods through air and sea borders, thus eliminating potential bottlenecks. Given the current and projected year-on-year growth in Dubai, we are sure to realize the benefits quickly," observes Ram Menen, Emirates divisional senior vice president cargo, who signed the MoU on behalf of the airline.

In addition to the environmental benefits of reducing paperwork, and the fees historically involved in air cargo movement, the use of e-freight processes also reduces costs, thereby improving modal competitiveness.

DPWN Introduces Green Fleet

Following in the carbon-less wake of U.S. "green movers" such as UPS and FedEx, Bonn, Germany-based Deutsche Post World Net (DPWN) recently announced plans to pilot hybrid trucks in its European operations.

At the World Mobility Forum in Stuttgart last month, Andreas Renschler, member of the board of management of Daimler AG and head of Daimler Trucks, delivered the first two vehicles, a Mercedes-Benz Atego BlueTec Hybrid and a Mitsubishi Fuso Canter Eco Hybrid, to DPWN.

The go-ahead for the largest fleet test in the company's history initially includes DHL Express activities in the United Kingdom as well as mail transport in Germany.

"With this initiative we are underlining our technological leadership in the sector and showing that we are serious about our environmental responsibilities," says Christian Stiefelhagen, member of the board responsible for transport and mail centers within the mail division of DPWN.

Daimler and Deutsche Post anticipate that the two 7.5-ton vehicles, which run on hybrid diesel-electric engines, will use up to 20 percent less fuel than conventional gasoline or diesel vehicles while also reducing CO2 vehicle emissions.

DPWN is currently working on a comprehensive climate protection program for its entire group. One point of focus is the use of alternative drives, such as electric, gas, and hybrid engines.

With its DHL Innovation Center, opened in March 2007, the company hopes to further develop ecologically sound logistics solutions. The center provides a site and forum where researchers and developers from all over the world can exchange knowledge and design practical innovations for global use.

Digital Editions

August 2014 Cover

Full Digital Issue

August 2014

(86 pages • 13.21 MB PDF)

2014 Logistics Planner Cover

Digital Edition

2014 Logistics Planner

(162 pages • 23.2 MB PDF)

Utilities and Site Selection: Power Players Cover

Digital Edition

Utilities and Site Selection: Power Players

(8 pages • 1.24 MB PDF)