Consolidation and Collaboration Can Meet the Challenges of e-Commerce

The Logistics & e-Commerce Session of the Future of Logistics conference continued with moderator Lars Jensen asking the panellists if the logistics industry is geared to handle the inventory management and warehousing challenges thrown up by the explosive growth of e-commerce across the world?

Madhav Kurup, Regional CEO (MESA Region), Hellmann Worldwide Logistics said that traditionally 3PLs have been more geared towards dealing with B2B operations. With e-commerce creating demand for more B2C logistics services, all players in the industry, big and small, have to develop new models to meet the new requirements.

According to Mr Kurup one way to meet the challenge is for 3PL companies to invest in multi-user B2C regional logistics hubs that can be used by mid-sized and smaller retailers to warehouse and distribute their products quickly in a cost-efficient manner.

Mr Kurup feels that the logistics industry needs to make “proactive investments” in technology and infrastructure to create these multi-user logistics hubs to meet the requirements of B2C logistics services.

Albert Kraak, who manages Smart Solutions Logistics at DP World, said that from his perspective consolidation is the key to meeting the challenge of stocking warehouses and making last-mile deliveries. “It doesn’t make sense to have 20 different companies delivering packages to one address,” said Mr Kraak.

According to Mr Kraak in order to consolidate the supply chain, ports, shipping lines, airlines and all other players need to share data in order to ensure that warehouses are stocked optimally. Presently, the uncertainty of the supply chain is causing warehouse mangers to hold more stock than they ideally should. This is creating greater demand for cargo space on ships and airplanes greatly driving up transport costs.

“The pricing at the moment is sky high but eventually it should come down when the supply chain is more in sync,” concluded Mr Kraak.

Tobias Maier, CEO MENA, SALOODO!, said that the growth of e-commerce depends on the price tag. At the moment not everybody can afford the prices of goods available online and have them delivered quickly or on the same day.

According to Mr Maier technology is going to be the game-changer for the supply chain with big data and AI helping to predict demand and help move goods and organise the supply chain better.

CEO of Emirates Post, Peter Somers said that the industry is indeed geared and organised today to handle the challenges of e-commerce, particularly the bigger players some of who have their own logistics operations.

According to Mr Somers the key question today is how the consumer experience is going to change with changing habits and the increase in demand for e-commerce goods. The e-commerce market is getting organised around quick-commerce, grocery delivery and regular cargo deliveries.

Echoing the thoughts of Mr Kraak, Mr Somers said that the industry is going to see a consolidation in last-mile operations moving forward. Depending on the requirements different models are likely to evolve with some cities having one vendor to cover last-mile deliveries for all areas.

“I think it is the obligation of the industry to look for ways to work together and avoid situations that can have 20 delivery vans covering one street,” Mr Somers concluded.

Read More: Supply Chain to Soon See a Merger of Cargo Transport and Logistics Ops