Supply Chains Need to Adapt as Power Shifts to Emerging Markets

MarineLink.com
Thursday, September 12, 2013

Over 80% of the world’s population resides in what is known as “emerging markets.” This group of countries represents a diverse collection of economies from China to Peru and Ethiopia to Kazakhstan. Combined, emerging markets have witnessed impressive economic growth over the past few years in comparison to developed economies such as the European Union and the U.S. and present great opportunities for logistics and transportation providers.

As a percentage of global import and export value, emerging markets have expanded their share over the past four years. From 26.1% of total global import value in 2009, emerging markets now comprises almost a third of global import value at 30.8%. For global export value, emerging markets was responsible for 31.0% of global export value in 2009 and has increased its share to 35.8% by 2012.

Ti’s latest report, Global Emerging Markets, takes an in-depth look at this collection of countries. While there are plenty of opportunities in these countries, it is not for the risk-adverse. Political upheavals such as in Egypt, natural disasters as observed in Thailand in 2011 and domestic economic issues in Brazil and India are among the many supply chain risks that must be taken into account.

Even so, demand for logistics services in emerging markets is outpacing that of developing markets. For example, the global contract logistics market grew at 3.4% from 2011 to 2012 however, for the same period, emerging markets grew at 9.4%. Perhaps not surprising, some of the biggest growth rates were noted in emerging countries within Asia and the Middle East at 10.8% and 10.6% respectively.

While such logistics providers as Agility are headquartered in emerging countries such as Kuwait and others first began operations in other emerging countries such as UTi Worldwide in South Africa, other major logistics providers have also noted the importance of this group of countries and have incorporated them into respective growth strategies. For example, for 2012, DHL Express noted an increase of total revenue of 9.3% however, by region; Asia and the Middle East and Africa recorded the biggest gains at 12.3% and 15.7% respectively.

Despite often being described as a single group, each emerging country presents a unique opportunity. As such Ti’s Global Emerging Markets report utilizes the latest findings from its annual Agility-sponsored Emerging Markets Index to provide an overview of 33 countries. Topics covered include country-level market sizing for contract logistics, express and freight forwarding as well as sub-indices rankings from the Emerging Markets Index.

According to John Manners-Bell, CEO of Ti, the world’s logistics industry is undergoing a dramatic reorientation around the emerging markets. “Whilst markets in the West have been impacted by the economic downturn, there have been many others in the emerging world which have continued on a steep growth trajectory. The development of the Middle Class in regions such as Asia, Latin America and even Africa, have led to new patterns of consumption, and consequently distribution requirements are evolving. The balance of power in the world’s economy has shifted, and supply chains will have to reflect these changes if they are to be fit for purpose in the new market environment.”

 


People & Company News

Kongsberg Performs Well in Q2

Norwegian defence and marine technology company Kongsberg Gruppen's second quarter 2016 (Q2) financial results shows sales performance broadly in line with recent trends,

Rickmers Holding, E.R. Capital Drop Merger Plan

Rickmers Holding AG and E.R. Capital Holding have jointly decided not to pursue the merger of their ship management activities.   For many years the companies

MN100: Conrad Shipyard

The Company: Conrad Shipyard was established in 1948 and is headquartered in Morgan City, Louisiana. The company designs, builds and overhauls tugboats, ferries,

Finance

Skaugen Goes to Red Again

Norwegian Marine Transportation Service Company I.M. Skaugen SE reported interim losses but cautiously positive and expecting a gradual recovery of trading opportunities

Kongsberg Performs Well in Q2

Norwegian defence and marine technology company Kongsberg Gruppen's second quarter 2016 (Q2) financial results shows sales performance broadly in line with recent trends,

How Rapid is the Fleet Growth?

During July 2016, the containership fleet reached a landmark 20 million TEU in terms of aggregate capacity, says Clarksons Research.   To many it only seems

News

Skaugen Goes to Red Again

Norwegian Marine Transportation Service Company I.M. Skaugen SE reported interim losses but cautiously positive and expecting a gradual recovery of trading opportunities

How Rapid is the Fleet Growth?

During July 2016, the containership fleet reached a landmark 20 million TEU in terms of aggregate capacity, says Clarksons Research.   To many it only seems

White House: Iranian Ships' Actions in Gulf Increase Risk of Miscalculation

Actions by Iranian vessels in several encounters with U.S. warships in the Gulf this week are cause for concern and increase risks of miscalculation, the White House said on Friday.

Intermodal

Rickmers Holding, E.R. Capital Drop Merger Plan

Rickmers Holding AG and E.R. Capital Holding have jointly decided not to pursue the merger of their ship management activities.   For many years the companies

Hapag-Lloyd: UASC Merger Benefits to show in 2017

German container shipping line Hapag-Lloyd expects to reap a third of targeted annual synergies of $400 million from the planned merger with Arab rival UASC already next year,

China COSCO Falls to H1 Net Loss

China COSCO Holdings Co Ltd fell to a first-half loss hurt by a persistent slump in the global container market, the world's fourth largest container shipper said on Thursday.

Logistics

How Rapid is the Fleet Growth?

During July 2016, the containership fleet reached a landmark 20 million TEU in terms of aggregate capacity, says Clarksons Research.   To many it only seems

Maersk Line's Innovative Smart Reefers

Have you heard about Maersk Line's smart reefers that can listen and talk? Cutting edge technology that reduces risk in customer supply chain, claims Maersk Line.

Rickmers Holding, E.R. Capital Drop Merger Plan

Rickmers Holding AG and E.R. Capital Holding have jointly decided not to pursue the merger of their ship management activities.   For many years the companies

 
 
Maritime Careers / Shipboard Positions Maritime Standards Naval Architecture Navigation Pod Propulsion Port Authority Salvage Ship Electronics Ship Simulators Shipbuilding / Vessel Construction
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1301 sec (8 req/sec)