Being in the information business has both its advantages and disadvantages. Access to interesting and informed industry executives, a constant flow of information crossing my desk are among the stimulating perks. Information overload is the downside. But then again, news gathering, filtering, repackaging and building upon all this information is what I and my correspondents around the globe are paid for. Sometimes however a real gem of a story or other bit of information comes along that makes me pause in admiration.
This very phenomenon occurred not long ago when I received a very interesting white paper written by the CEO of Jan de Rijk Logistics, Sebastiaan Scholte who is concurrently the secretary general of the Cool Chain Association. The paper, leaning towards a political economy analysis is nearly six pages of facts, analysis and commentary has, I must confess, lingered on my desktop for at least a couple of weeks because of the need to suitably condense to fit into the magazine. While I will squeeze it down and squeeze it into the magazine, which has fierce competition for page space, I thought it salient to highlight some of the interesting issues it raises in the meantime. Take it as a ‘food for thought’ item, which we will develop more fully in a coming issue.
Titled ‘Shifting Balances: The effect of demographics and inefficiencies on logistics”, the paper highlights the fact that overall global demographic developments have a large impact on economics and therefore on trade and transport flows. These manifold impacts will bring opportunities mainly for emerging economies and challenges for mature economies, particularly Europe where the population is ageing.
Scholte’s argument is essentially that the rise of emerging economy logistics players will pose a threat to European logistics service providers because of what he describes as the shifting balance of economic power from mature economies to emerging economies. In short, “if Europe does not become more competitive on a global level it risks losing global market share,” he says.
Already, he notes, traditional trade lines, like Asia-Europe and Asia-US are shifting towards more transport volumes between Asia and Africa & Latin America. Hubs in Asia, like Singapore and in the Middle East, like Dubai, Abu Dhabi, and Doha will benefit from these trade developments. This threatens the position of Western Europe as a major global logistics hub.
He also warns that with strong financial backing and buoyed by robustly growing markets, companies in emerging economies will eventually be acquiring more companies in Europe. “If European logistics service providers will not be allowed to be more competitive on a global scale, in the future the European logistics market could be dominated by Asian and Middle Eastern companies some of them supported by sovereign wealth funds. From an open market perspective this is perfectly fine, but an economic balance of power is also desirable,” he writes. Indeed, food for thought.
