Product Type: Market Research Report
Published by: Datamonitor
Published: July 2006
Product Code: R313-16805Description Introduction
The proportion of logistics spend that is outsourced to third-parties is set to rise in the coming years. However, while specialized logistics companies have enjoyed an increasingly prominent role in recent years, their future success will rely on how they deal with five mega-trends that are set to shape the future of the industry.
Scope- This brief analyses the European logistics industry and future spend patterns.
- What are the five key trends that will drive the market? What can companies do now to improve their chances of success in the future?
Highlights
Outsourced logistics spend is set to increase its share of the European market in the coming years due to beneficial trade conditions and the continual pressure on firms to reduce costs. However, this favorable environment will not necessarily mean that third-party logistics companies will automatically feel the full effects.
There are 5 key driving factors in the logistics industry that will be of equal importance as general economic conditions: globalization, legislation, technology, consolidation and alliances. These will all be critical aspects for providers and their clients going forward and how these factors are dealt with will ultimately determine their fate.
Reasons to Purchase- Identify what trends will affect your company, and how you can take action in order to either protect yourself or fully reap the potential benefits.
- Obtain an overview of future logistics spend within Europe.
Table of Contents - DATAMONITOR VIEW
- CATALYST
- SUMMARY
- ANALYSIS
- Outsourced logistics spend set to increase through to 2008
- Improvement in global GDP and trade has had positive knock-on effects for logistics spend
- This has benefited logistics companies, and will continue to do so if they can tackle five mega-trends
- Globalisation will lengthen and complicate supply chains
- End-user supply chains are lengthening due to cost pressure and consumer demand
- This trend is set to continue over the coming years, but there will be changes
- In order to prosper, 3PLs need to work closely with customers now and install the necessary infrastructure
- Legislation targeting electrical waste will present significant opportunities
- Forthcoming European legislation will increase pressure on companies to recycle
- This will create significant problems for manufacturers....
- ...but may also bring about cost savings for them
- This will create potentially lucrative opportunities for 3PLs
- Companies will have to act quickly though, as some 3PLs are already making moves
- RFID tracking technology will become standard service across the industry
- The take-up of RFID technology has been relatively slow in the logistics industry
- However, the benefits of RFID will increase the pressure on suppliers to provide the service
- 3PLs will be assisted in the short-term by the decrease in cost of RFID tags
- Adopting RFID could give 3PLs a competitive advantage, but companies must act soon
- Consolidation will split the industry into two distinct groups: global vs. niche
- The recent wave of M&A activity has had differing drivers
- Recent deals can be split into two broad categories of geographic expansion or service convergence
- This trend is set to continue over the coming years
- Key decisions must be made by 3PLs now to correctly position their companies in the industry
- Alliances and collaboration will increase significantly along the entire supply chain
- Alliances can be an effective method for 3PLs to tackle globalization
- However, there are attached risks to this approach
- Collaboration will also become common in 3PL clients, something that 3PLs can exploit
- Consequently, 3PLs are set to play an increased role in the industry
- APPENDIX
- Further reading
- Datamonitor consultancy
- Ask the analyst
- List of Figures
- Figure 1: Increase in European Logistics Spend 2002-2008
- Figure 2: Recent M&A Deals in the Logistics Industry
- Figure 3: Relative Global Contract Logistics Market Shares in 2005
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