logistics evolution to address new challenges in multimodal transport in europe
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Logistics Evolution to Address New Challenges in Multimodal Transport in EuropeTRANSCRIPT
Logistics evolution to adress new challenges in Multimodal transport in Europe
Jean Claude Delen, Chairman REU Fiata, President of Clecat, CEO DHL Benelux
Multimodal Freight – Connecting Europe to Asia
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LIST OF CONTENTS
Deutsche Post World Net - DHL
Intermodal Transportation – today and future opportunities
Will Europe continue leading
Rail Solutions - Connecting Europe and Asia
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DEUTSCHE POST WORLD NET
A global player with strongly placed divisions…
Worldwide
•DHL Global Mail –
biggest network for
mail distribution
worldwide•Delivers mail to
about 40 million
households
in Germany•More than 71
million
shipments a day
GLOBAL FORWARDING,
FREIGHT
Worldwide
•No. 1 in global
air freight•No. 1 in global
ocean freight•One of Europe’s
leading road freight
forwarders•3,000 locations•Strong customer
base (50% of Forbes
500 companies)
FINANCIAL SERVICES
Germany
•Germany’s leading
retail bank•14.5 million
customers•17.2 million savings
accounts
USA•Worldwide
finance services
for logistics industry
EXPRESS
Worldwide
•No. 1 in cross
border express•Strong presence
in 220+ countries
and territories•6500 branches•More than 4.2
million customers
worldwide•120,000
destinations
All information taken from DPWN 2007 Annual Report and DPWN The No.1 in numbers
SUPPLY CHAIN, CORPORATE
INFORMATION SOLUTIONS (CIS)
Worldwide
•No. 1 in global
contract logistics•3,000 locations•Strong customer
base (50% of Forbes
500 companies)•3.5 million square
meters of managed
warehouse space•Leading provider
of CIS worldwide
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DHL BRAND AREAS
Service Overview by DHL Brand Area
Road and Rail FreightAir Freight &
Ocean Freight ServicesContract Logistics &
Industry Solutions
Same Day, Time Definite, Day Definite
EXPRESS
• Same Day• DHL Express 9:00• DHL Express 12:00• DHL Express
Worldwide • DHL Import Express
Worldwide• DHL Europack• DHL Europlus
• Supply Chain
Management• Warehousing• Distribution• Value Added Services• Logistics Outsourcing• Lead Logistics Provider
GLOBAL FORWARDING, FREIGHT
Flexible and customised road and intermodal transportation network
• Groupage• Part Loads• Full Loads• Rail Transportation• Customs Services• Trade Fairs
& Events
Supply Chain, CIS
• Air Freight• Ocean Freight• Industrial Projects• Customer Program
Management (CPM)
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DHL LOGISTICS OVERVIEW
6.2%Global Market
Share
Global Market Leader
> 160,000 people• Logistics facilities in 3,000 locations
in over 220 countries
Rethinking logistics in the 21st Century…
World‘s largest
logistics service
provider
World‘s largest air
freight forwarder
World‘s largest
ocean freight
forwarder
(in both FCL & LCL)
• Revenues: € 25.739 billion (2007)• Customer base includes 50% of Forbes top 500 companies
Global Market Share
12.1%Global Market
Share
9.2%
One of Europe’s
leading road freight
forwarders
2.0%European Market
Share
* Full-containerload ** Less-than-containerload
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DHL FREIGHT MARKET INTELLIGENCE STUDY 2007
European Market 2006¹
90.3%
Top 6 providers
Others
Total market1:
157.2 Billion Euro
Note: 1) Figures exclude bulk and specialtiesSource: MRSC MI Freight reports 2006 & 2007, Eurostat 2006, annual reports, press releases, corporate web sites, estimates.
Corporate Development September 2007.
DHL is among the leaders in a very
fragmented market
Market shares of top 6 road freight forwarders
9.7%
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DHL LOGISTICS – COMBINED GLOBAL COVERAGE
DHL Global Forwarding and DHL Exel Supply Chain presence
DHL Global Forwarding, DHL Exel Supply Chain and DHL Freight presence
DHL Global Forwarding and DHL Freight presence
DHL Global Forwarding presence
DHL Logistics is No 1 in Europe, Americas and Asia Pro Forma Revenues 2006 (DHL Global Forwarding, DHL Exel Supply Chain, DHL Freight)
• Operations in all continents • Facilities in over 3,200 locations• Over 160,000 employees worldwide• Pro Forma Revenues 2006: € 22.7 billion
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Consignor Pick-up Intermodal
Terminal
Rail
and/or
Short Sea
lane
Intermodal
Terminal
Delivery Consignee
UNACCOMPANIED INTERMODALTRANSPORT
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CURRENT INTERMODAL BUSINESS
Total: 81.410 movements
Athens
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FUTURE MODAL SHIFT (1/2)
Modality Time Cost Co2 Distance
Air +++ - - - - - >500km
Water - + + >5000km
Road ++ +/- - >500<2500km
Rail +/- + ++ >500<5000km
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FUTURE MODAL SHIFT (2/2)
– Increased congestion and environmental pressure (modal shift)
– Increased demand for oil putting more pressure on renewable fuels and prices (continued to search for alternatives, surcharges)
– Alternative Fuels and Energy must become priority
– Focus of governments on international trade (open borders, standardized customs and ICT systems)
– Development of continental railway networks as alternative for road and sea transports (e.g. Asian, African and/or Middle East)
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Railways are challenging the container shipping companies in the Far East transports
Traffic balance are a challenge with substantial financial impact
Petroleum has more than doubled its prices (60 to 130 $ a barrel)
On the markets there is a call for a new service concept
New routes – traditional transport flows are being reshaped
There is a fast growing customer demand for new rail route connection services
A bare rail connection to the Far East is not enough
Customers (Forwarders) to be involved in the development
It is now a question of networking the existing railway connections in a new way to secure the growth possibilities for the future
RAIL SOLUTIONS – CONNECTING EUROPE AND ASIA
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Vladivostok, Vostochniy, Nakhodka
Hamina port, FinlandROSE arrows show the short-sea leg from the port of departure in the Far East to Russian port of discharge.
BLUE arrow shows the leg on rail.
RED arrows show the on-carriage legs (either by trucks or short sea) from Hamina to the final destinations in Europe.
MULTIMODAL FCL FREIGHT SERVICES ex. FAR EAST TO EUROPE VIA RUSSIA: TRANSPORT ROUTES (example)
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Zabaikalsk
Druzhba (Alashankou
)
Hamina port, Finland
BLUE The leg on rail
RED The on-carriage legs (either by truck or short sea) from Hamina to the final destinations in Europe.
OVERLAND FCL RAIL FREIGHT SERVICES ex. CHINA TO EUROPE IN TRANSIT VIA RUSSIA: TRANSPORT ROUTES (example)
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Key areas in future logistics
Infrastructure
– infrastructure (the lack of?) will dictate our growth and employment numbers in the next few years.
– Lack of investment in transport infrastructure comparable to 1975 – 2000 will crate inevitable decline in Europe.
Energy & emissions issues
– Alternative fuels and alternative energy must become commercially viable and find appropriate distribution networks
The importance of the intermodal and the railways in particular
– Alternative (to the road) means of transport will grow in market share and will become predominant (in 20-30 years) in long haul
– Road legs (with lower emission and alternative fuels) will secure capillarity and become ever more important
– Rail transport must become more reliable and efficient
Knowledge based
– ICT as an instrument of expert management of the SC and communication with authorities
– Trade facilitation & partnership with authorities (compliance programmes)
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What needs to be done to increase the use of rail
* Increase railways reliability and efficiency
* Invest in own cargo transport tracks
* Accept Less than a railcar shipments
* Become Customer Friendly
* Recognize Forwarders as true partners
– In one sentence:
* Be open, Flexible and commercial minded
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Will Europe continue leading?
Some elements have changed in the last two years
– EU has become more efficient, but more expensive (dollar value drop, 1,1 to 1,6 to the Euro)
– Petroleum has more than doubled its prices (60 to 130 $ a barrel)
– Energy market is not sufficiently competitive to reflect currency value differences
– EU pays petroleum more than it should at nominal value (about 50%)
– US pay petroleum less than markets would suggest
EU competitiveness is penalised twice, but the price of the Euro and the inability to reap the benefit of its high value in the energy market
For Europe to continue leading logistics important changes must happen in the way transport deals with energy for propulsion: transport industry must progressively abandon petroleum and look elsewhere (possibly within Europe) for its energy supply (1st and 2nd generation bio-fuels, renewable sources and nuclear)
Invest in the “human factor”: logistics are now key employers….
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“Big boys” and Small Medium Enterprises
EU logistics market and other mature markets, such as the US
• Logistics, 3PL’s and 4PL’s grew steadily (about 5% a year) in the last 20 years
• More mature markets have a higher share of logistics (about 50%) outsourcing than new, emerging markets (25-30%)
• Potential of growth is still very big for everybody
multinationals look very powerful, but they control 6-7% of the market only
• Looking back in time, after mergers & acquisitions and spin-offs the landscape of national logistics has not changed: less than 10 big players and very many small operators is general pattern
• Big boys are “product oriented” they set a standard
• Smaller companies are more client oriented they scan the market for “new entries” and build lasting customers’ confidence
There is much to do together, if we wish to cooperate….
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Where is the logistics market heading to now?
Logistics has evolved: it is today the main “facilitator” of trade, how?
– By providing a direct link between production and markets, with increased efficiency and contained costs
– By enlarging the commercial horizon of manufacturers and putting marts that were unreachable within reach of a large number of SME
– By providing a “single window” for all those who wish to take advantage of this kind of service
Being the heart of Logistics we need to raise our voice
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contributing to an open market and growing employment opportunities
Source: Europe’s 500 Listing (http://www.europes500.com/pages2/results.htm#sector)
Relative annual growth of employee figures of 20.5% for transport and logistics companies
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2006 advantages are waning….
Relative logistics cost in developing markets were still significantly higher than in the EU and US. But the gap is closing, or?
EU/ US Typical developing market
~8-10% logistics
cost relative to GDP
~20% logistics
cost relative to GDP
Infrastructure bottlenecks Pressure on transport
capacity Environmental challenges Security requirements
Considerable investment in logistics infrastructure (ports, airports, rail and road)
Transfer of foreign best practice
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In conclusion
Logistics is now a powerful economic force that can contribute to development Logistics is now a powerful economic force that can contribute to development
There is no integrated development today without logistics as a key to access markets
There is no integrated development today without logistics as a key to access markets
The role of big players is to ethically show the way for the benefit of our sector The role of big players is to ethically show the way for the benefit of our sector
Institutions such as Fiata, Clecat and OSJD should concentrate on the promotion of facilitation at political level and disseminate expert information useful in the national implementation of international programmes, such as WCO SAFE, AEO, e-freight etc. They should also support infrastructure investments.
Policymakers Should know that without alternative energies and huge investments in transport infrastructure competitiveness will vanish and decline will be inevitable.
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Regional Body Europe in Fiata
Fiata cooperates with many international institutions, amongst which:
– WCO
– WTO
– UNECE
– WORLD BANK
– UNCTAD
– INTERNATIONAL TRANSPORT FORUM
– To exchange and disseminate information about international conventions, transport and trade agreements and other international public order instruments
Fiata cooperates actively with CLECAT, using its preferential access in Brussels
– In the attempt of shaping EU logistics and Customs landscape
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THANK YOU FOR YOUR ATTENTION