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On June 5, 2013, I was the keynote speaker at the CILT Sri Lanka International Convention in Colombo. This meeting, held in conjunction with the CILT International meeting, was a gathering of logistics owners and thought leaders from Sri Lanka, Africa, Asia, Australia, The Americas and Europe.
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The Future of Logistics:Opportunities Abound
Dynamics to facilitate global trade.
My background
• “Born into it”. My father worked for Kintetsu from the early 70’s.
• January, 1977, started a Customs brokerage and freight forwarder in Chicago.
• 1993 graduated university and joined the firm.
• Licensed Customs broker, air freight forwarder, ocean freight forwarder.
• Board of directors of the national association of Customs brokers and freight forwarders in the USA, NCBFAA.
This morning we will:• Look at the present (really quickly).
• Look at the near future (in much more depth).
• Discuss the changing face of trade (regulations, security, sustainability)
• Using the internet and social media to build brand and reputation.
• Highlight the value of independent professionals.
• Future growth opportunities through innovation.
• Look waaayyy out into the The “We’re going to Mars”
Airlines and Steamship Lines
• 2009: ($4.7 billion)
• 2010: $16 billion
• 2011: $8.8 billion
• 2012: $7.6 billion (est)
• 2013: $12.7 billion (est, on 1.7% margins)
• 2009: ($11.3 billion)
• 2010: $10 billion
• 2011: ($5.9 billion)
• 2012: ($1.3 billion)
Publicly traded companies only.
Steamship Lines
Steamship Lines
Bigger is better?
And the airlines?
Asset owners force choices
• Supply chain from beginning to end relies on asset owners.
• When the asset owners cannot manage their businesses, the logisticians become the experts.
Other factors we cannot control
• Raw material availability
• Climate change
• Strikes, riots, civil commotions
• Oil prices
• Slow steaming, capacity fluctuations (sea and air)
What we can control
• Business decisions to mitigate or minimize risks.
• Fuel hedging
• Steps towards reducing carbon footprint
• Use multimodal transport to redirect cargo.
So...what is our future?
Future Outlook 2013: Sri Lanka“Policies to promote value addition into fast expanding supply chain industries and entrepôt trade are expected to sustain earnings from exports. Further, earnings from trade in services are poised to grow with the 5-hubs namely, the maritime, aviation, knowledge, commercial and energy sectors and tourism emerging as key growth sectors in the economy.”
Source: Central Bank of Sri Lanka 2012 report
Market knowledge is power!
• We know carriers, transit times, routes.
• We know airlines, schedules, timetables, cut-offs.
• We know Customs regulations.
• It is not all automated.
Trade Protections
•Product Safety
•Intellectual Property Rights
•Antidumping / countervailing duties
There is only one Customs agency per country.
Security will play a major role in our future success and financial health.
In the future, it will be about data.
• Can you analyze it?
• Can you offer predictions or models based on it?
• Can it find ways to save money for your customers and make money for you?
Using data to save money and the environment.
• The Kyoto Protocol in 2020 will demand that companies reduce their carbon consumption.
• Pressure from customers on brands will require that steps be taken as well.
• Pure single-mode asset owners are not the answer; multimodal solutions (such as sea-air) will be.
• Multimodal solutions, analyzed, presented and delivered, will further add value to future-looking logisticians.
The internet to build your brand
• Web presence must be globally PROFESSIONAL in appearance.
• Social media gives you the chance to show off your company, projects, people.
• Tell your story.
• Twitter, LinkedIn, Instagram, Pintrest
68%More favorable opinion of the brand after social
media push.
Global partnerships
•Be part of a network or build your own. There is strength in numbers.
•Your partners are an asset. Highlight them.
•Promote your origin / destination offices.
•You can have a backup plan. A multinational cannot.
“Open” vs. “Closed” Technology
But in freight forwarding...
Have one technology “face” for the customer.
Have one technology “face” for the customer.
Have one technology “face” for the customer.
• The customer should have a single portal where they can go and follow the progress of their merchandise from origin to destination.
• Duplicate entry of data should be avoided at all costs.
• Scanning and OCR (optical character recognition) for document storage and archiving will give customers anywhere, anytime access.
Become a closer supply chain partner
• Don’t let the first call be to move the finished goods.
• Work with them from design to delivery and every step in between, including returns.
• Reverse logistics $100 billion in returns for manufacturers and retailers in USA and to grow exponentially in Asia thanks to e-Commerce.
• Consult, advise, manage, solve problems, offer solutions and save them MONEY.
• Make them depend on your technology.
Continuity of service
• Creating a process, instructions and a flowchart insure instructions will be followed consistently.
• Track all customer communications in a central location (collect email, letters and meetings between staff, sales and management) to monitor the relationship.
• Set KPIs and milestones, measure them and report them. Publicly.
Example: MOL
Your contact today could be your new customer tomorrow.
Source: World Bank
Crowdfunding is a source for new business capital for people
with ideas.
Crowdfunding --> E-Commerce
• In order for it to be successful, there must be investment in the supply chain infrastructure.
• Reduce the bottleneck, increase the opportunities.
In the future...
• Ocean vessels will navigate via the polar route.
• Six to eight retail seasons.
• Sheep to shop supply chain solution providers.
• Suborbital flight of passengers...and cargo?
Takeaways• We must make plans for ourselves and not rely on asset
providers.
• Increased regulation, and more attention to security and the environment will be good for business.
• Technology, in how we market ourselves and what we offer our customers, will separate the winners from the losers.
• New small businesses can turn into long term big businesses that offer growth potential from startup to shipment.
