Watch: Higher Input Costs, Changing Regulations are Big Challenges
Co-moderator of the Future of Logistics Conference Part II and TLME Chairman Joe Beydoun drew the panellists’ attention to current geo-political tensions that have led to high fuel prices in parts of the world like the US and asked them how can logistics companies there successfully compete with other parts of the world? And what did the future look like?
Farooq Shaikh, CEO of LogiPoint replied by generalising the high fuel prices as “inflationary pressures” and part of the business cycle where supply shocks have - at least partly – been factored in.
For LogiPoint, Mr Shaikh said, logistics infrastructure costs have gone up by 20 to 30% over the last year. Was that factored in? Partly, said Mr Shaikh. But ultimately it will be the end user who will be passed on the additional costs that were not factored in.
Mr Shaikh said that even as we wait for supply chains to normalise LogiPoint is seeing a greater demand for land-side warehousing and transport capacities in the Middle East region. New warehousing facilities are also being planned in the US. However, with regard to transport, even before the pandemic the US was seeing a shortage of truck drivers so when they will overcome their manpower shortage “still remains an unknown.”
Leonard Rodrigues, Head of Revenue Management and Network Planning - Cargo at Etihad Cargo said that a lot of planning goes into dealing with contingency situations like fuel price hikes and sanctions.
Mr Rodrigues said that Etihad Cargo has a dedicated team that ensure that whatever the carrier moved was in accordance with the latest regulations. In this way by implementing “in-house rules” Etihad Cargo was trying to keep its operations running as smoothly as possible.
Exemplifying his point Mr Rodrigues informed the panel that last week the US has embargoed all cargo going to Russia that was built using American machinery.
For these kind of regulations precise guidelines and rules were very hard to define. In this way, every few months we see new challenges for the supply chain and the people at Etihad Cargo are constantly figuring out how to successfully deal with those challenges, concluded Mr Rodrigues.