strategies of 3rd Party- Logistics providers

Transcription

1 The New Silk Road: an overview of regional strategies of 3rd Party- Logistics providers CHRISTOPH SZAKOWSKI MANAGING PARTNER 1

2 In this presentation we are going to answer: How to gain most benefits and overcome challenges as a Logistics service provider

3 East-West fascination 1. Traffic manager DE- PL 2.Trade Lane manager DE- CEE 3. GM manager RU CEE -West 4. Consultant, interim COO West, CEE, CIS, Asia (China Kazakhstan)

4 Having observed and consulted companies over a longer period of time, we see that: 1. Many logistics service providers do not have a strategy they simply let business drive their direction and the future 2. They develop some set of activities as reaction to what customers are asking for or what the competitors are doing 3. They stay with what they are familiar with. They do not identify challenges and new trends

5 We keep hearing Low margins Operational urgencies and bottlenecks War for logistics talent New technologies Entrants to the markets

6 We strongly believe : in current times you need to: Differentiate yourself as a logistics provider in order to gain a competitive advantage providing unique value to customers. That is why as we define: Strategy the trick to see and anticipate the future. The toolset to lead through uncertainties. This toolset is your success driver in the OBOR Logistics.

7 What implies from the CEO perspective regarding the Strategy for the region Asia?* Which of the trends need to be addressed by logistics providers strategies? Provide new / better services for clients (overland transportation, contract Growth in the intra-asian trade lanes The need for Service development for particular verticals (automotive, Shortage of English-speaking logistics talent and executives Continued growth in local markets % 23 % 24 % 27 % 27 % *Based on results of a survey done by LogCon East with 30 + senior management members of logistics companies in China, Kazakhstan, Vietnam and Thailand

8 Customer is king: the most important 3PL capabilities according to customers: 2017 Third-Party Logistics Study The State of Logistics Outsourcing Results and Findings of the 21st Annual Study PENSKE, Cap Gemini and PennState Shippers are shifting more decision making power to 3PLs 3 PLs are expected to leverage their skills, infrastructure, technology and innovation to deliver the best possible solutions for clients supply chain Customers want their logistics provider to drive their supply chain transformation to improve their efficiency, cost and service levels,inventory turns, cash-to-cash cycles, speed to markets etc.

9 Do I need a strategy for OBOR logistics? AND LPI OF SELECTED COUNTRIES

10 Voices from OBOR markets Main challenge for our company is the high competiton with many players. The market is not developed in terms of Unique Value Proposition. Main opportunity we see in creation of unique value for Chinesse SME with LTL and LCL shipments and our near tocustomer service. The market driver could be automation and IT systems to be used in logistics processes in OBOR Andrey Kim, General Director, SAS Logistics,freight forwarding company, Kazakhstan

11 Niche or megaexpansion what is better? Company A Key Facts : Global HO South East Asia service points in 50 countries 5 milion square metre warehousing locations Asia specialist with China focus employees, 3 billion USD turnover Strong assets and multimodal Eurasian transport network Provider of supply chain solutions with integrated logistics, international freight forwarding and express Company B Key Facts : No. 1 provider in CIS and Middle East HO Dubai 30 + location with strong footprint in Central Asia, Caucasus and Caspian Region 1000 employees From single location in Kazakhstan the company became Multi-Regional Logistics Provider in CIS One of the routes offered is Trans China route

12 Strategy global network expansion Main drivers: Expansion of geographical coverage ( CIS, Central Asia) Mutual Development of transit cargo Adding up project cargo competence to enhance the portfolio of service Vision establishing global footprint Challenges: Finding a sustainable cultural fit Merging a network based organization with specialized freight forwarder

13 Nippon Express : Cooperation Agreement with KTZ Strategy: product (rail-transport) based cooperation Main Drivers : Optimization of cross-border rail transport service offering Better access to KTZ facilities and containers Addressing the service for automotive suppliers, fine machinery, precision equipment and fashion industry (eastbound) and wine-makers, fashion, food (westbound) on China-Europe trade lanes Challenges: Going from agreement to operational modus and then to highperformance Finding synergies in both players strategies, besides of modus operandi ( Global Logistics Provider vs. Establishment as main freight and passenger carrier )

14 New Silk Way Logistics.. KLG Group / Royal Wagenborg / H. Essers Group Strategy: joint venture Main Drivers : Shared common values of all companies : 100% family owned, asset based, focus on long-term, entrepreneur Common vision : to offer first class end-to-end intermodal rail and logistics solutions East-bound and west-bound rail service + pre/on-carriage service Fixed commitment 45 ft reefer equipment Common interest to focus on clients from a broad range of verticals (cosmetics, pharma, packed goods, fashion, high tech, automotive, timecritical) Using Venlo and Hamburg as hubs Challenges: Further development from operative collaboration platform to strategic cooperation

15 A.R.T. Logistics Limited Strategy: Innovative Solutions in Projects Logistics and Freight Forwarding in Eurasia Main Drivers : focus on the expertise in OBOR routes rail transportation Own online rates calculator and 7 operational offices in Eurasia allowing fast calculation of 400 routes Strong position in out-of-gauge and Heavy cargo Handling complex shipments in hazardous environments Challenges: not enough places in the container block trains to meet the market needs Merging e-logistics with physical business model sustaining the pionier position in rail-based e-tools \

16 SAS Logistics LLP Strategy: Focus on providing quality service as small and flexible market player Main Drivers : Full service starting from pick up and finishing with door delivery including customs clearance, certification and licencing, Developing perspective LTL and LCL business together with strong Chinese partner Consultancy service for shippers Challenges: Niche player with limitations caused by the size

17 As demonstrated different ways to exploit chances within the New Silk Road logistics and transportation corridors exist. Our suggestions how you can win as logistics service providers 1. Decoding the myths / OBOR demysftified 2. Making a decision for trade corridors 3. Proper trade lane analysis consultancy 4. Start with a mix of expats managers with locals interim managers 5. Plan long-term, with patience and in view of cross-cultural aspects consultancy

18 Decoding the myths : deal with them and decide what works for your company 1. OBOR is only about rail transportation 2. It is only something for giant-type of organisations 3. It is a political project 4. It is one-sided China related vision 5. It is nothing for newcomers in the Eurasian logistics

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20 Focus on trade lanes and integrated solutions

21 Our recommendations for the talent management: 1. Start with the selection of the people with the appropriate skill set 2. The right people will produce and realize the realistic business plans 3. Consider working with an expat as middleman who will take on board, train and develop local people to fit best the Corporate standards. 4. Plan your projects in consideration of the Logistics Performance Index of particular countries in the OBOR corridords. 5. Connect to the local market by respecting the local specialities and not by overthrowing the Corporate way of thinking.

22 Anticipate cultural differences China Western Europe Eastern Europe Communicaton team Key points Communicaton Style Middleman calls between "strangers Top management collectivism individualism Rather colllectivism clear hierarchy bein equal Hierarchical "guanxi" (connections) information Recommendations looking for channels seek information Looking to gain trust flip flopping step by step Hybrid barganing reasoning Explaining long term pursuit short meeting Many interactions formal informal Formal indirect direct Direct explanation first Proposal first Explanation first inquiry push hard Diplomatic patient impatient Impatient

23 Strategic approach is key to guide your company through various chances and challenges in OBOR logistics Different scenarios might work for logistics providers New Silk Road trade and logistics corridors : question marks become chances with expert knowledge, often provided by trusted advisors and consultants as partners

24 25 Logcon East Your partner in interim management and logistics consultancy in Europe and in Asia Thank you for your attention: Christoph Szakowski