Business Logistics Management Lecture Notes

Business Logistics Management Management poslovne logistike Global contemporary challenges: Historical and forward-looking perspectives Marko Budler, PhD Lab session 1b  Growth by region  Transport infrastructur...

Business Logistics Management Management poslovne logistike Global contemporary challenges: Historical and forward-looking perspectives Marko Budler, PhD Lab session 1b  Growth by region  Transport infrastructure investment in Western Europe will likely be modest in the near future, given the already well-developed transport networks.  However, capacity becomes an important hindering factor (airports, ports, roads): the overall increase in trade and changes in the material flows require substantial investments in infrastructure (!)  Large-scale development of transport networks will likely continue in many Asia-Pacific economies, given the shift in economic power from the West to the East, the rise in Asian wealth and rapid urbanisation.  While mega projects such as the metro for Qatar airport grab headlines, roads still make up the largest subsector for transport spending in the Middle East.  Sub-Saharan Africa is the fastest growing regional infrastructure market, with a projected average increase in transport spending of over 10% per year from 2020 to 2030. Most of this growth is expected in roads and ports.  Transport infrastructure investment Transport infrastructure investment is projected to increase at an average annual rate of about 5% worldwide over the period of 2014 to 2025. APAC APAC challenges  APAC & Global trade wars “With risk management in the supply chain you have to be proactive. This isn’t something anymore in which you can sit around and think ‘when it happens we will sort it out’” (Wilding, 2018). Why and What of the trade war:  The US trade deficit with China climbed to a record level in 2017. The gap between Chinese goods imported to the US and American goods exported to China increased from $347 billion to $375.  Cycle of retaliation: US brands such as Boeing, Apple and Intel, along with industries such as soya beans, could be vulnerable to reprisals.  Near future: companies could redesign products to remove rare materials that are available only in China or, perhaps, persuade a mining company in Australia to find an alternative source.  Global trade wars & supply chains 2  China exports around four times as much to the US as the US does to China. No more goods to target:  What did the Chinese do?  Factories shift out of China to avoid trade war, boosting volume for logistics firms like Kerry Logistics from Malaysia.  What follows?  Tariffs may ultimately force some automakers to relocate their production to match local demand. This could  …result in? Global trade wars & supply chains 3 US imports by the end-product Key implications for supply chains (SCs) What about Europe? European Commission: the priority areas of European logistics policy are:  Infrastructure – Seamless systems require investments  Research, development and training – Strengthen the competitiveness of the European Union Enterprises – The reinforcement of logistic industry  Regulation – Innovative and intelligent  Cost Efficiency – Effective logistics  Sustainability – From environmental, social and economic viewpoint, a must in modern logistics  Co-Operation – A strategic issue in network society  Public-Private Partnership – Agile solutions for investments. European logistics platform The European Logistics Platform (ELP) has been created to gather policy makers and industry stakeholders to collectively tackle the challenges of the logistics sector such as overstrained infrastructure, climate change, deployment of new technologies, risk management, trade barriers, customs processes and development of e-Commerce.  EU infrastructure underinvestment  Europe is home to:  three of the largest ocean carriers,  the top trio of freight forwarders and logistics companies,  and a clutch of leading air cargo operators.  Europe’s infrastructure inadequacy was demonstrated by the closure of the Rhine Valley Alpine rail track, the key link between Rotterdam and its vast hinterland.  Backbone/hinterland?  EU infrastructure underinvestment  Hamburg has been hit by trucking congestion in the city, due to traffic peaks caused by the increasing numbers of mega-vessels calling at Europe’s third-largest container port.  Work on a planned 66-mile canal linking Paris to the 12,500-mile Rhine-Scheldt network of wide-gauge waterways and the ports of Antwerp and Rotterdam that was initially due to open in 2017 — and then 2023 — is still awaiting the go-ahead as the French government has failed to come up with the 4.5-billion-euro financing. Europe – China Europe – China 2 China-Europe Rail Routes and Frequency (2018)