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 Europe

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Logistics Evolution to Address New Challenges in Multimodal Transport in Europe

  1. 1. Logistics evolution to adress new challenges in Multimodal transport in Europe Jean Claude Delen, Chairman REU Fiata, President of Clecat, CEO DHL Benelux
  2. 2. Multimodal Freight – Connecting Europe to Asia
  3. 3. LIST OF CONTENTS Deutsche Post World Net - DHL Intermodal Transportation – today and future opportunities Will Europe continue leading Rail Solutions - Connecting Europe and Asia
  4. 4. DEUTSCHE POST WORLD NET A global player with strongly placed divisions… MAIL <ul><li>Worldwide </li></ul><ul><li>DHL Global Mail – biggest network for mail distribution worldwide </li></ul><ul><li>Delivers mail to about 40 million households in Germany </li></ul><ul><li>More than 71 million shipments a day </li></ul>GLOBAL FORWARDING, FREIGHT <ul><li>Worldwide </li></ul><ul><li>No. 1 in global air freight </li></ul><ul><li>No. 1 in global ocean freight </li></ul><ul><li>One of Europe’s leading road freight forwarders </li></ul><ul><li>3,000 locations </li></ul><ul><li>Strong customer base (50% of Forbes 500 companies) </li></ul>FINANCIAL SERVICES <ul><li>Germany </li></ul><ul><li>Germany’s leading retail bank </li></ul><ul><li>14.5 million customers </li></ul><ul><li>17.2 million savings accounts </li></ul><ul><li>USA </li></ul><ul><li>Worldwide finance services for logistics industry </li></ul>EXPRESS <ul><li>Worldwide </li></ul><ul><li>No. 1 in cross border express </li></ul><ul><li>Strong presence in 220+ countries and territories </li></ul><ul><li>6500 branches </li></ul><ul><li>More than 4.2 million customers worldwide </li></ul><ul><li>120,000 destinations </li></ul>All information taken from DPWN 2007 Annual Report and DPWN The No.1 in numbers SUPPLY CHAIN, CORPORATE INFORMATION SOLUTIONS (CIS) <ul><li>Worldwide </li></ul><ul><li>No. 1 in global contract logistics </li></ul><ul><li>3,000 locations </li></ul><ul><li>Strong customer base (50% of Forbes 500 companies) </li></ul><ul><li>3.5 million square meters of managed warehouse space </li></ul><ul><li>Leading provider of CIS worldwide </li></ul>
  5. 5. DHL BRAND AREAS Service Overview by DHL Brand Area Road and Rail Freight Air Freight & Ocean Freight Services Contract Logistics & Industry Solutions Same Day, Time Definite, Day Definite EXPRESS <ul><li>Same Day </li></ul><ul><li>DHL Express 9:00 </li></ul><ul><li>DHL Express 12:00 </li></ul><ul><li>DHL Express Worldwide </li></ul><ul><li>DHL Import Express Worldwide </li></ul><ul><li>DHL Europack </li></ul><ul><li>DHL Europlus </li></ul><ul><li>Supply Chain Management </li></ul><ul><li>Warehousing </li></ul><ul><li>Distribution </li></ul><ul><li>Value Added Services </li></ul><ul><li>Logistics Outsourcing </li></ul><ul><li>Lead Logistics Provider </li></ul>GLOBAL FORWARDING, FREIGHT <ul><li>Flexible and customised road and intermodal transportation network </li></ul><ul><ul><li>Groupage </li></ul></ul><ul><ul><li>Part Loads </li></ul></ul><ul><ul><li>Full Loads </li></ul></ul><ul><ul><li>Rail Transportation </li></ul></ul><ul><ul><li>Customs Services </li></ul></ul><ul><ul><li>Trade Fairs & Events </li></ul></ul>Supply Chain, CIS <ul><li>Air Freight </li></ul><ul><li>Ocean Freight </li></ul><ul><li>Industrial Projects </li></ul><ul><li>Customer Program Management (CPM) </li></ul>
  6. 6. DHL LOGISTICS OVERVIEW * Full-containerload ** Less-than-containerload 6.2% Global Market Share Global Market Leader > 160,000 people <ul><li>Logistics facilities in 3,000 locations in over 220 countries </li></ul>Rethinking logistics in the 21 st Century… World‘s largest logistics service provider World‘s largest air freight forwarder World‘s largest ocean freight forwarder (in both FCL & LCL) <ul><li>Revenues: € 25.739 billion (2007) </li></ul><ul><li>Customer base includes 50% of Forbes top 500 companies </li></ul>Global Market Share 12.1% Global Market Share 9.2% One of Europe’s leading road freight forwarders 2.0% European Market Share
  7. 7. DHL FREIGHT MARKET INTELLIGENCE STUDY 2007 European Market 2006¹ 90.3% Top 6 providers Others Total market 1 : 157.2 Billion Euro Note: 1) Fi gures exclude bulk and specialties Source : 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%
  8. 8. DHL LOGISTICS – COMBINED GLOBAL COVERAGE DHL Logistics is No 1 in Europe, Americas and Asia Pro Forma Revenues 2006 (DHL Global Forwarding, DHL Exel Supply Chain, DHL Freight) <ul><li>Operations in all continents </li></ul><ul><li>Facilities in over 3,200 locations </li></ul><ul><li>Over 160,000 employees worldwide </li></ul><ul><li>Pro Forma Revenues 2006: € 22.7 billion </li></ul>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
  9. 9. Consignor Pick-up Intermodal Terminal Rail and/or Short Sea lane Intermodal Terminal Delivery Consignee UNACCOMPANIED INTERMODALTRANSPORT
  10. 10. CURRENT INTERMODAL BUSINESS Total: 81.410 movements Athens
  11. 11. FUTURE MODAL SHIFT (1/2) >500<2500km - +/- ++ Road >500<5000km ++ + +/- Rail >5000km + + - Water >500km - - - - - +++ Air Distance Co2 Cost Time Modality
  12. 12. FUTURE MODAL SHIFT (2/2) <ul><ul><li>Increased congestion and environmental pressure (modal shift) </li></ul></ul><ul><ul><li>Increased demand for oil putting more pressure on renewable fuels and prices (continued to search for alternatives, surcharges) </li></ul></ul><ul><ul><li>Alternative Fuels and Energy must become priority </li></ul></ul><ul><ul><li>Focus of governments on international trade (open borders, standardized customs and ICT systems) </li></ul></ul><ul><ul><li>Development of continental railway networks as alternative for road and sea transports (e.g. Asian, African and/or Middle East) </li></ul></ul>
  13. 13. <ul><li>Railways are challenging the container shipping companies in the Far East transports </li></ul><ul><li>Traffic balance are a challenge with substantial financial impact </li></ul><ul><li>Petroleum has more than doubled its prices (60 to 130 $ a barrel) </li></ul><ul><li>On the markets there is a call for a new service concept </li></ul><ul><li>New routes – traditional transport flows are being reshaped </li></ul><ul><li>There is a fast growing customer demand for new rail route connection services </li></ul><ul><li>A bare rail connection to the Far East is not enough </li></ul><ul><li>Customers (Forwarders) to be involved in the development </li></ul><ul><li>It is now a question of networking the existing railway connections in a new way to secure the growth possibilities for the future </li></ul>RAIL SOLUTIONS – CONNECTING EUROPE AND ASIA
  14. 14. Vladivostok, Vostochniy, Nakhodka Hamina port, Finland ROSE 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)
  15. 15. 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)
  16. 16. Key areas in future logistics <ul><li>Infrastructure </li></ul><ul><ul><li>infrastructure (the lack of?) will dictate our growth and employment numbers in the next few years. </li></ul></ul><ul><ul><li>Lack of investment in transport infrastructure comparable to 1975 – 2000 will crate inevitable decline in Europe. </li></ul></ul><ul><li>Energy & emissions issues </li></ul><ul><ul><li>Alternative fuels and alternative energy must become commercially viable and find appropriate distribution networks </li></ul></ul><ul><li>The importance of the intermodal and the railways in particular </li></ul><ul><ul><li>Alternative (to the road) means of transport will grow in market share and will become predominant (in 20-30 years) in long haul </li></ul></ul><ul><ul><li>Road legs (with lower emission and alternative fuels) will secure capillarity and become ever more important </li></ul></ul><ul><ul><li>Rail transport must become more reliable and efficient </li></ul></ul><ul><li>Knowledge based </li></ul><ul><ul><li>ICT as an instrument of expert management of the SC and communication with authorities </li></ul></ul><ul><ul><li>Trade facilitation & partnership with authorities (compliance programmes) </li></ul></ul>
  17. 17. What needs to be done to increase the use of rail <ul><li>* Increase railways reliability and efficiency </li></ul><ul><li>* Invest in own cargo transport tracks </li></ul><ul><li>* Accept Less than a railcar shipments </li></ul><ul><li>* Become Customer Friendly </li></ul><ul><li>* Recognize Forwarders as true partners </li></ul><ul><ul><li>In one sentence: </li></ul></ul><ul><li>* Be open, Flexible and commercial minded </li></ul>
  18. 18. Will Europe continue leading? <ul><li>Some elements have changed in the last two years </li></ul><ul><ul><li>EU has become more efficient, but more expensive (dollar value drop, 1,1 to 1,6 to the Euro) </li></ul></ul><ul><ul><li>Petroleum has more than doubled its prices (60 to 130 $ a barrel) </li></ul></ul><ul><ul><li>Energy market is not sufficiently competitive to reflect currency value differences </li></ul></ul><ul><ul><li>EU pays petroleum more than it should at nominal value (about 50%) </li></ul></ul><ul><ul><li>US pay petroleum less than markets would suggest </li></ul></ul><ul><ul><li>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 </li></ul></ul><ul><li>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) </li></ul><ul><li>Invest in the “human factor”: logistics are now key employers…. </li></ul>
  19. 19. “ Big boys” and Small Medium Enterprises <ul><li>EU logistics market and other mature markets, such as the US </li></ul><ul><ul><li>Logistics, 3PL’s and 4PL’s grew steadily (about 5% a year) in the last 20 years </li></ul></ul><ul><ul><li>More mature markets have a higher share of logistics (about 50%) outsourcing than new, emerging markets (25-30%) </li></ul></ul><ul><ul><li>Potential of growth is still very big for everybody </li></ul></ul><ul><li>multinationals look very powerful, but they control 6-7% of the market only </li></ul><ul><ul><li>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 </li></ul></ul><ul><ul><li>Big boys are “product oriented”  they set a standard </li></ul></ul><ul><ul><li>Smaller companies are more client oriented  they scan the market for “new entries” and build lasting customers’ confidence </li></ul></ul><ul><ul><li> There is much to do together, if we wish to cooperate…. </li></ul></ul>
  20. 20. Where is the logistics market heading to now? <ul><li>Logistics has evolved: it is today the main “facilitator” of trade, how? </li></ul><ul><ul><li>By providing a direct link between production and markets, with increased efficiency and contained costs </li></ul></ul><ul><ul><li>By enlarging the commercial horizon of manufacturers and putting marts that were unreachable within reach of a large number of SME </li></ul></ul><ul><ul><li>By providing a “single window” for all those who wish to take advantage of this kind of service </li></ul></ul><ul><li>Being the heart of Logistics we need to raise our voice </li></ul>
  21. 21. 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
  22. 22. 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 <ul><li>Infrastructure bottlenecks </li></ul><ul><li>Pressure on transport capacity </li></ul><ul><li>Environmental challenges </li></ul><ul><li>Security requirements </li></ul><ul><li>Considerable investment in logistics infrastructure (ports, airports, rail and road) </li></ul><ul><li>Transfer of foreign best practice </li></ul>
  23. 23. In conclusion <ul><li>Logistics is now a powerful economic force that can contribute to development </li></ul><ul><li>There is no integrated development today without logistics as a key to access markets </li></ul><ul><li>The role of big players is to ethically show the way for the benefit of our sector </li></ul><ul><li>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. </li></ul> Policymakers Should know that without alternative energies and huge investments in transport infrastructure competitiveness will vanish and decline will be inevitable.
  24. 24. Regional Body Europe in Fiata <ul><li>Fiata cooperates with many international institutions, amongst which: </li></ul><ul><ul><ul><li>WCO </li></ul></ul></ul><ul><ul><ul><li>WTO </li></ul></ul></ul><ul><ul><ul><li>UNECE </li></ul></ul></ul><ul><ul><ul><li>WORLD BANK </li></ul></ul></ul><ul><ul><ul><li>UNCTAD </li></ul></ul></ul><ul><ul><ul><li>INTERNATIONAL TRANSPORT FORUM </li></ul></ul></ul><ul><ul><li>To exchange and disseminate information about international conventions, transport and trade agreements and other international public order instruments </li></ul></ul><ul><li>Fiata cooperates actively with CLECAT, using its preferential access in Brussels </li></ul><ul><ul><li>In the attempt of shaping EU logistics and Customs landscape </li></ul></ul>
  25. 25. THANK YOU FOR YOUR ATTENTION

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