Where's the Global Logistics Market Headed?
Logistics, a robust supply chain, international trade, and a global market of exchanging goods overseas make the world go 'round. When the economy is flourishing, the global logistics market makes countries competitive, and logistics activities help to advance both economic and productivity growth. However, in times of world economic struggle and financial depression, we become hyper-aware of how fragile — and vital — the global logistics market really is. In recent months, consumers and business owners, worldwide, have realized that when there is any break in the chain, it’s universally felt. Experts are working hard to find new ways for the global supply chain to be more efficient and effective… leaving many businesses wondering: where is the global logistics market headed?
Classifications of the Global Logistics Market
The logistics market's classifications and categories drive forecasting for the future. Think of segments by transportation type: airways, waterways, railways, and roadways. Materials move from sourcing to manufacturing to distribution — and finally, the finished goods arrive for the end-user. End-users are classified into categories of industrial and manufacturing, retail, healthcare, and oil & gas. At all times, logistics professionals ensure that goods move smoothly via all transportation modes throughout each market stage. When disruption occurs in any segment or category, the entire chain feels the effects.
A Booming Economy: Early 2020
During the first few months of this decade, analysts forecasted considerable economic growth in 2020. With increasing worldwide consumer demands, globalization of e-commerce, and rising population growth, the flow of goods from one country to another was more robust than ever before. Advances in logistics technology and improvements in transportation, warehousing, processing, and packaging and growing demand for products were at an all-time high. Despite the strong start to the year, however, recent months reshaped both supply and demand worldwide. Businesses attempting to ship overseas encountered unforeseen challenges. A new outlook has driven a necessity to change business practices for logistics moving forward for this year and years to come.
How Businesses Are Adapting
When the going gets tough, companies that can respond to market fluctuations with resilience, maximizing efficiencies, and positive outcomes are more likely to weather the storm. For example, amid global disruption in 2020, UPS demonstrated its ability to analyze the global supply chain and develop a strategy to communicate more effectively using technology to achieve goals and provide a high level of service to customers. By analyzing the supply chain market and making necessary adjustments and changes in modeling and testing various scenarios, the company created a more sustainable operation for the future, leveraging increased digitized services and a more diversified supplier base.
A Birds-eye View — Who's Driving the "Bus"?
When manufacturing — which ends up driving the “bus” — falls behind in production (like it did this year due to worldwide stay-at-home orders and a slowdown in demand), every segment of the market feels the effects. In recent months, the reshaping of the economy has shone a light on the industry's shortcomings and ways to better prepare for the future. When the manufacturing sector gets more robust, more private investments allow the market to flourish. Economic reforms and government initiatives also drive the "bus," and everyone's trying to improve efficiencies to boost industry and add employment to thrive.
Government Policies & the Effect on Logistics
There's an increased demand for logistics services due to favorable trade policies, which allow expansion in the global market. The recent growth of e-commerce business and enhanced integrations of information, transportation, inventory, warehousing, material handling, packaging, and security drive the market toward continued, sustainable growth.
The abrupt change in market dynamics in 2020 resulted in most companies with low inventory levels having significant setbacks. But what should change going forward? Global Trade Magazine outlined the logical next steps:
- Shortening of the supply chain so that products can get into the hands of consumers more quickly.
- Higher inventory levels must be secured so that products don’t get wiped off the shelves.
- An overall increased investment in workforce management — to streamline processes in all steps of the global supply chain.
Unfortunately, many smaller companies that couldn't keep up with the current landscape's supply and demand could disappear. Fewer companies mean less competition — but could lead to larger companies and the creation of a monopoly. It's vital for every company involved in the logistics market to keep a close eye on everything that's happening worldwide — and make adjustments when necessary, with keeping the needs of customers top of mind in every decision.
At MyUS.com, we're committed to reducing any negative impacts felt by the global supply chain's current strain. If you have any questions or concerns about how we're reacting and adapting to the market changes, don't hesitate to contact us.