Logistics: what is it?

ETF Seminar:
How to recruit and organise in the logistics sector?
Run, Sweden 8-11 February 2009


Paula Hamilton, ITF
hamilton_paula@itf.org.uk
What is Logistics?
The work of logistics
Logistics in Central and Eastern Europe
Main Actors in Logistics (in the region)
Gearing up to strengthen our unions
Logistics
The work required to move and position
inventory throughout the supply chain
which serves to link and synchronise the
overall supply chain as a continuous
process and is essential for supply chain
connectivity. (Bowersox et al, 2007)

Logistics
Logistics is a subset of and occurs within the
broader framework of supply chains.

Logistics activities occur within and between all
companies active within supply chains.
The rise of logistics is driving restructuring across
the whole transport sector

The new logistics industry plays a vital role in the
global economy.

Physical Flows, Nodes and
Networks
Global Gateways: Container and Air Cargo
CONTAINER PORT AIR CARGO TERMINAL
Information and Communication
Flows
Enable faster and more consistent
communication within organisations and
between corporate actors in supply chains

Enhances effective communication between
logistics information systems and their physical
operating environments


ICT and Logistics
Customers demanding real time
information
Used to reduce inventory, labour
requirements and risk
Improve timing/speed
Increase reliability
Increase transparency in supply chains
ICT Systems
Supply Chain Information Systems (SCIS)
are responsible for linking all logistics
activities into an integrated process
These have four major components:
Enterprise Resource Planning systems
Communication systems
Execution systems
Planning systems
Information and Communication
Technologies
Types of ICT used

Bar coding and scanning
Global data synchronisation
The Internet
Satellite technology
Image processing
Extensible markup language

The work of logistics
Order Processing
Inventory
Transport
Warehousing, Materials Handling and Packaging
Facility Network Design
Order Processing
Order preparation
Order transmittal
Order entry
Order filling
Order status reporting
Key customer interface
Inventory
Raw materials
Work in process
Finished goods
Supplies
Warehousing, Materials Handling
and Packaging
Many types of warehousing
Traditional role has been to hold or store inventory
but
Today many value added activities occur in such
environments, operations focus on customisation,
velocity and movement
Packaging serves to protect products during the
logistics process
Materials handling involves receiving, moving,
storing, sorting and assembling.

Facility Network Design
A facility network is the number, size and
geographical relationship of facilities used to
perform logistical operations.
Include manufacturing plants, warehouses, cross-
docks, ports and retail outlets.
Facility network design determines the number and
location of all types of facilities used to perform
logistics work
Facility networks are in a constant state of flux
Transport
These are the operations which geographically
move and position inventory
Include road, rail, water, air and pipeline
Is the largest element of logistics costs
Reduces inventory, storage and materials handling
Transports role is becoming increasingly important
in supply chains
Logistics Industry: Markets
Air Cargo
Airports
Contract Logistics
Finished Vehicle Logistics
Freight Forwarding
Ports
Express and Parcels
Intermodal
NVOCC


Rail
Road Haulage and Trucking
Service Parts Logistics
Temperature controlled
logistics
Warehousing and property
development
Information and
Management Services
Shipping
Barriers Between Modes
Disappearing
Deutsche Post World Net
Privatizing German Postal Service
DHL
Danzas
Airborne Express
Exel: #1 US Warehouse Co.
NOL/APL
Singapore Based
Steamship Line
Terminal Operator
#3 US Whouse Co.,
Rail = Liner Trains
Logistics in Central and Eastern
Europe
Fundamental changes in the logistics market in recent
years
Production near sourcing in CEE
Growing consumer markets
Large LSPs new models to serve clients
Few indigenous international companies operating on a
global scale
Pattern in most CEE countries = strong local logistics
presence serving the needs of small business + large
TNC providers providing services for the international
incomers
Possible restructuring with some CEE based companies
grouping themselves together to provide services across
the region
CEE: Contract Logistics
Market Size and Growth
2007 grew to 991m, a growth rate of 24%
Highest growth rate in the Slovak Republic
(39%)
Baltic States also experiencing strong growth,
helped by proximity to Russian market
2011 market forecast = 1956m (18.56%)
CEE: Express and Parcels
Still major differences between CEE and WE
markets but likely to change as shippers demand
specialist levels of service and pricing
Growth is not homogeneous across the region,
Baltic States and Slovenia show above average
growth
Automotive is particularly important to the express
sector in Poland, Czech Republic, Slovakia and
Hungary
All major global express providers are well
positioned in Poland and Czech Republic
CEE: Freight Forwarding
2007 grew to 2112m, a growth rate of
21.3%
2007 - Air forwarding grew to 637m, a
growth rate of 17%
2007 Sea forwarding grew to 1475m, a
growth rate of 23.3%
2011 freight forwarding market forecast is
3731m, a growth rate of 15.3%
CEE: Road
Source: Eurostat
By Type 2006 (m t km)
Logistics Actors in the Region
Include:
Manufacturers
Retailers
Local, regional and national Governments
The European Commission
AND Logistics Service Providers
Ocean carriers Inland transport
Manufacturers
3PL
POWER
Wal-Mart is hard to do business
with. I had a cardiac episode while I
was working for them.
- Former Exel manager of Wal-Mart DC
Logistics Industry: Main Actors in
the Region
Deutsche Bahn
CEVA
DPWN
DPD
DSV
Ewals Cargo Care
FedEx
Fiege Logistics
FM Logistics
GAC
GEFCO
GLS
Geodis (SNCF)
Kuehne and Nagel
M&M
AP Moller Maersk Group
NYK Logistics
Panalpina
TNT
UPS
UTi Worldwide
Wincanton
Logistics Industry: Main Actors
present in all your home countries
Deutsche Bahn
DPWN
DSV
GAC
Kuehne and Nagel
M&M
Others (variable range of operations)

M&M: Militzer & Mnch
International Holding AG
Owned by TransInvest Holding AG
Headquartered in Switzerland
Operations divided into 6 regional groups
A major partner in the System Alliance
organisation, a FedEx partner
Products and Services include rail cargo, air
cargo, sea cargo, groupage, customs service,
warehousing and logistics


Source: Transinvest
M&M Organisation
M&M: Strategies for Growth
Build its network in Eastern Europe
Focus on developing its IT-aided processes
Become more active in new and developing
markets with a focus on Central Asia and
China
GAC
Head office in Dubai
Privately owned
Operates in over 40 countries, with 250
offices and over 7000 staff
Business areas include shipping, logistics,
marine and solutions
Target markets include oil and gas, retail,
automotive to dry bulk and cruise liners
GAC: Strategies for Growth
Aims to provide an integrated solution to its
clients logistical needs
Expansionist strategy, particularly in
emerging markets
Tends to enter new markets via partnerships
first, then set up subsidiary
Four hub agency centres: London, Dubai,
Singapore and Houston
Logistics revolution
Consolidator / freight
forwarder, 3PL
Road transport
Manufacturer
Air freight
Ocean shipping
Port trucking
Warehouse: deconsolidator,
3PL, wholesaler, DC
Warehouse:
deconsolidator,
3PL, wholesaler, DC
Rail
Road transport
Road transport
Retailer
Small parcel delivery
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