Eight Noteworthy Trends for Logistics in 2020 in the Asia Pacific

Jan Harnisch, COO Global Products Air & Ocean, Rhenus Asia-Pacific

 

SINGAPORE – Media OutReach – 11 February 2020 – Jan
Harnisch, COO Global Products Air & Ocean, at Rhenus Logistics, shares his
eight noteworthy trends for the logistics industry in 2020, in the Asia Pacific
region:

Booming M&A Trend: The aggressive trend of M&A within the logistics
industry will continue its momentum, in response to developing economies of
scale, improving digitalization through technological improvements and
geographical and vertical diversification. Consolidation will be driven to be
able to offer end-to-end and integrated solutions. The availability of private
equity (PE) and funds has enabled players to raise cheaper capital for M&A
activity.

 

Collaboration: In 2020, more collaboration will be expected between
the shippers and Third-Party logistics companies. The focus will be on creating
long-term partnership models, enabling a win–win situation in terms of cost and
service. The trend of 2PL and 3PL players collaborating amongst themselves will
create an ecosystem for cost-effective and efficient solutions. 

 

Ecommerce: Ecommerce will remain a strong driving force in 2020,
especially in Southeast Asia. As players such as Amazon, Lazada and Shopee push
their expansion in the region, Rhenus can see a shift from air freight to ocean
freight on short sea distances. In order to be able to replace existing air
freight consolidation for ecommerce, a strong focus on lead times will become
more and more important. On top of that, strong systems and operational
excellence is needed to ensure the fastest handling possible. Major ecommerce
players will also rely even more on direct airline co-operations.

 

Infrastructure: Rhenus expects huge investments in infrastructure by
the government and private enterprises, especially in India and Indonesia. This
will lead to ease of movement and substantial improvement in the quality of
infrastructure.

 

Innovation and IOT: Innovative solutions will be introduced to reduce
inefficient processes; the big focus being sustainability. The use of IOT in
the industry, such as sensors, will become more prevalent in logistics,
enabling a much higher degree of transparency, from inventory tracking to RFID
tags which measure location, temperature or humidity. This increased visibility
will decrease reaction times and highly improve decision making.

 

Sustainability: 2020 will be a “green” year for logistics. As
different industries take the lead on becoming ever more sustainable in recent
years, it has directly impacted logistics, which must adapt to their customer
trends. The industry will see a need for greater accountability in their
environmental impact and measures. The ocean freight industry will especially feel
this impact, as from January 1st, Sulphur in fuel oil used on board ships will
be reduced from 3.5 per cent to 0.5 per cent, reducing the overall Sulphur
pollution from shipping by 80 per cent. In the area of warehousing management,
companies will need to look at developing innovations to raise operations
efficiency, labour management and waste management.

 

Supply Chain: Leaner and agile supply chains with end-to-end
visibility will be implemented through the latest technology. Price-driven
freight will move to digital platforms while service-driven or integrated
services-driven business will move to logistics players. There will be
increased differentiation between solution-oriented service providers versus
capital / infrastructure-intensive service providers.

 

Ripple Effect of China-US Trade
War: In 2019, the adverse
effects of the trade war between China and US was felt not only in the economic
growth of these two giants but globally as well, and the ripple effects will
continue well into 2020. China continues to be the second biggest region in the
world for Foreign Direct Investment, in particular the high-tech industry, such
as semiconductors, pharmaceuticals. Even as China moves away from its image as
the “world’s manufacturer”, the country’s homegrown products will be seen
competing with the best in the global market. Shanghai, with almost 70 per cent
of the import business of entire China, will continue to be an investment
haven. As will Hong Kong, which continues to hold strategic business importance
for companies investing in the Greater China market, despite the ongoing
disturbances. Similar to 2019, Taiwan, Thailand and Vietnam will be the
beneficiary of the trade war, with even more investment from Mainland China
companies in ever-growing industries such as automotive, telecom, and
computing.

About Rhenus

The Rhenus Group is a
leading logistics service provider with global business operations and an
annual turnover of EUR 5.1 billion. Rhenus has business sites at 660 locations
worldwide and employs 31,000 people. The Rhenus Group provides solutions for a
wide variety of different sectors along the complete supply chain; they include
multimodal transport operations, warehousing, customs clearance as well as
innovative value-added services.