India and China will “change the landscape” of the global logistics market in the coming years, said Essa Al-Saleh, president and CEO of Agility Global Logistics, opening a session entitled “LongLive Logistics”.
“These two very important countries represent 40 per cent of global population but currently only 7 per cent of GDP,” he told delegates. “That status is bound to change, and they will demand sophisticated solutions for their supply chain requirements.”
Today, he pointed out, China is only US$300 billion of the $3.43 trillion global logistics market and India even less, accounting for just $60 billion. That compares with $1.04 trillion for Asia as a whole, $1.12 trillion for Europe and$1.17 trillion for the US.
Of the $3.43 trillion total, $400 billion was outsourced logistics – that is freight forwarding and contract logistics – but this was growing rapidly, at some 10 percent a year.
Several industry sectors accounted for a large part of this outsourced logistics spend – automotive, retail and consumer goods, food, technology, and oil, gas and mining. In all, the outsourced logistics market was expected to reach $590 billion in value by 2010. “It is China as a major manufacturer that is driving a lotof that demand,” Al-Saleh said.
Reviewing some of Agility’s logistics customers, he pointed to Wal-Mart for whom Agility provides order and vendor management, consolidation services, air freight movements from Asia to stores in Latin America, and other value addedservices.
“We continue to see demand for service quality, innovation and lower costs, and we are only able to meet these demands through the investments we have made in the last few years,” Al- Saleh said.
Another customer was Lite-On in Taiwan, for which Agility provides automated warehousing at manufacturing sites, web-based transport and inventory visibility, time-defi nite global transportation, and packaging, palletisation and product customisation.
This kind of customer exemplifi ed the need for global logistics capabilities, but Al-Saleh pointed out that there were also other clients with more local needs. An example here was India’s Metro Group, where Agility picks up products from farmers, transports them to central warehouses, performs various tasks to get them ready for stores, and then manages distribution of the finished products.
