The Recession Lessons That Will Endure, Monika Ribar, CEO, Panalpina
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The Recession Lessons That Will Endure, Monika Ribar, CEO, Panalpina

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Presentations from eyefortransport’s 8th 3PL Summit & Chief Supply Chain Officer Forum in Brussels, November 2010. Visit www.3PLsummit.com/eu for further resources.

Presentations from eyefortransport’s 8th 3PL Summit & Chief Supply Chain Officer Forum in Brussels, November 2010. Visit www.3PLsummit.com/eu for further resources.

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  • 1. European 3PL Summit Brussels November 24, 2010 1 Monika Ribar November 24, 2010European 3PL Summit Brussels
  • 2. European 3PL Summit Brussels November 24, 2010 2Before 2007 you didn’t need a crystal ball …• Business history was repeating itself from year to year• Cyclicality of supply and demand was predictable• Growth was a given• Infrastructure congestion was the biggest problem• The western economies were the main center of gravity
  • 3. European 3PL Summit Brussels November 24, 2010 3World trade collapse in 2009 and recovery in 2010 110 65World trade hasalways been 105 60volatile but 100 55the 2009 dipwas exceptional 95 50and resulted incorresponding 90 45figures 85 40 80 35 75 30 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 German ifo business climate index (lhs) U.S. PMI index (rhs) Global PMI index (rhs) Source: ISM institute for supply management, Ifo Institute for Economic Research
  • 4. European 3PL Summit Brussels November 24, 2010 4Macro update: slowdown in second half 2010 110 PMI vs. ifo index 65 Leading indicators pointing to slowdown of growth … 105 60 • Most indicators have returned to pre-recession levels but have 100 55 been contracting for the last several month, indicating that the upturn is losing momentum 95 50 90 45 … and lower support from inventory restocking … 85 40 • Restocking has come to an end: 49% of U.S. shippers noted 80 35 more shipping activity in Q2 due to inventory restocking. Only 75 30 35% of shippers expected more shipping activity in Q3 as inventory restocking had peaked* 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 German ifo business climate index (lhs) U.S. PMI index (rhs) Global PMI index (rhs)Source: ISM institute for supply management, Ifo Institute for Economic Research • Among those shippers that have already begun restocking, 41% plan to stop rebuilding inventories in H2 2010, while 31% indicated H1 2011* 160 Consumer Confidence Index 140 … and most importantly consumption 120 • Consumer confidence stagnating on a low level 100 • Moderate peak season (ocean freight) early in year 80 60 40 The exceptionally high growth rates seen in H1 2010 are not 20 being repeated in H2. 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 U.S. Consumer Confidence IndexSource: U.S. Conference Board *Source: Wolfe Trahan & Co. Shipper Survey, August 2010
  • 5. European 3PL Summit Brussels November 24, 2010 5Emerging industry trends Trends ReactionIncreased volatility of rates Growth – look for profitable and sustainableIncreased pressure on logistics costs business opportunitiesIncreased unpredictability in market demand – Flexibility – be faster and smartera challenge for supply chain management Customer focus – get closer, create value,Increased outsourcing of logistics and more save costsfocus on entire supply chain 3PL Study highlights an overall increase in outsourcing of logistics services. However shipper collaboration with 3PLs is not in line with 3PL expectation or opportunity and the low demand for integrated logistics solutions offers opportunities. Shippers and 3PLs must collaborate more to create more value.
  • 6. European 3PL Summit Brussels November 24, 2010 6Flexibility• Accept change as the new normal – prepare for the unpredictable (continuous contingency planning)• Enable organization to respond quickly to changes in the market• Streamline internal processes to ensure rapid responses to customer requests• Anticipate market trends and their impact on customer needs
  • 7. European 3PL Summit Brussels November 24, 2010 7Growth• Enforce internal transparency to enable profitable growth• Strengthen and streamline sales force to support targeted growth within strategic markets and with strategic customers• Increase collaboration with customers and partners on strategic and operational levels• Grow in mature markets by offering end-to-end-solutions• Sell expertise and increase market share in emerging markets (BRIC states)
  • 8. European 3PL Summit Brussels November 24, 2010 8BRIC area remains growth engineReal GDP growth forecasts IMF Regional development forecast % yoy 2008 2009 2010 2011 • Global economy: Asia forging ahead, EuropeUSA 0.4 -2.4 3.1 2.6 lagging behindJapan -1.2 -5.2 1.9 2.0 • The 2010/2011 World Transport ReportEuro area 0.6 -4.1 1.0 1.5 estimates doubling of freight volume in BRICUK 0.5 -4.9 1.3 2.5 countries in the next 15 yearsCanada 0.4 -2.6 3.1 3.2 • USA: No sweeping economic revivalAdvanced • Eurozone: still not a self-sustaining upswing 0.5 -3.2 2.3 2.4economies • South East Asia: Coming out of recession atChina 9.6 8.7 10.0 9.9 full speedIndia 7.3 5.7 8.8 8.4Brazil 5.1 -0.2 5.5 4.1 • Latin America: Mixed recovery patternRussia 5.6 -7.9 4.0 3.3 • Central & Eastern Europe: Highly variedEmerging & dev. growth trends 6.1 2.4 6.3 6.5economiesWorld 3.0 -0.6 4.2 4.3Source: IMF WEO April 2010
  • 9. European 3PL Summit Brussels November 24, 2010 9Customer focus• Get under your customers’ skin – become involved in customer forecasting and logistics planning• Provide and increase in-depth industry expertise• Increase supply chain effectiveness, create value, save costs • Increase communication – help customers understand the potential of supply chain optimization• Improve integrated, automated IT solutions
  • 10. European 3PL Summit Brussels November 24, 2010 10The world has changed but …