Logistics, Transportation Focusing Mostly on Cost-Cutting

Oct. 13, 2009
Focus on customers is declining during tough economic times

The 18th annual study, "Trends and Issues in Transportation and Logistics," authored by Capgemini in collaboration with JDA Software, Georgia Southern University and University of Tennessee demonstrates how far the worldwide recession is shaping the transportation and logistics sector.

The study is the result of findings from a survey participated by 830 respondents across fourteen industry sectors ranging from energy/chemical/mining to retailing.

Main highlights of the study are the following. Top three megatrends that have most affected logistics strategies over the past year include:

  • Economic downturn (#1 megatrend in North America and Europe)
  • Cost of logistics services (#2 megatrend in North America and #3 megatrend in Europe)
  • Increasing customer requirements (#2 megatrend in Europe and #3 megatrend in North America)

The study identified five key drivers of sustainable supply chains: Optimization, Adaptability, Velocity, Profitability and Synchronization.

  • Nearly half of transportation and logistics players see cost-cutting as their primary strategic objective, while the focus on customers is declining.
  • There is a significant increase in the number of shippers who said that "cost reduction" is their primary strategic objective, climbing to 44% of respondents in 2009 as compared to 35.5% in 2008.
  • Significant decline in the importance placed on customer service with number of shippers who listed "improved customer service" as a primary objective decreased to 18% -- down from 26.6% of respondents in 2008.
  • A continued inability for many respondents to solve the issue of customer visibility with only 40.7% of shippers is able to provide customers with visibility of orders in transit. This percentage declined significantly as one moves upstream in the supply chain, with only 18.5% of customers having visibility of raw materials commitments.

For the first time, the 2009 study looked at similarities and differences that exist between North American and European shippers. The key differences that emerged from this comparison included:

  • North American shippers are more willing to share data with a typical customer than their European counterparts. Specifically, 28.6% of North American shippers indicated that "anything" or "almost anything" requested is shared versus only 11.9% of European shippers surveyed.
  • European shippers experienced fewer difficulties in dealing with fuel-price volatility compared to North American shippers.

About the Author

IW Staff

Find contact information for the IndustryWeek staff: Contact IndustryWeek

Sponsored Recommendations

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!