Making connections to global logistics

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Trucking in the U.S. is rightly considered a “domestic enterprise” as freight-carrying big rigs certainly can’t transform into planes and/or ships to deliver goods by air or sea to far flung locations outside North America – at least not yet anyway.

Still, trucking plays a critical role in transporting goods to and from seaports and airports, serving as either the first or last made for products exported from or imported into our country. And one firm at least believes it is such global logistical connections to what’s commonly known as “emerging markets” that will provide a lot of the shipments – and thus a lot of the revenue – freight carriers of all modes will be hauling in the near future.

In its new report dubbed Global Emerging Markets Logistics 2013, London-based consulting company Transport Intelligencepoints out that as a percentage of global import and export value, emerging markets – representing what the firm calls “a diverse collection of economies from China to Peru and Ethiopia to Kazakhstan” – expanded their share over the past four years.

From 26.1% of total global import value in 2009, Transport Intelligence said emerging markets now comprises almost a third of global import value at 30.8%. For global export value, emerging markets was responsible for 31.0% of global export value in 2009 and has increased its share to 35.8% by 2012.

While the firm cautions that such countries are – in a classic understatement – "not for the risk-adverse," as political upheavals such as in Egypt, natural disasters as observed in Thailand in 2011 and domestic economic issues in Brazil and India create an awful lot of supply chain risks, the demand for logistics services in emerging markets is outpacing that of developing markets.

For example, John Manners-Bell, CEO of Transport Intelligence, noted that while the global contract logistics market grew at 3.4% from 2011 to 2012, over that same period, emerging markets grew at 9.4%. Perhaps not surprising, some of the biggest growth rates were noted in emerging countries within Asia and the Middle East at 10.8% and 10.6% respectively, he said.

“The world's logistics industry is undergoing a dramatic re-orientation around the emerging markets,” Manners-Bell noted in his firm’s report.

"Whilst markets in the West have been impacted by the economic downturn, there have been many others in the emerging world which have continued on a steep growth trajectory,” he said. “The development of the middle class in regions such as Asia, Latin America and even Africa, have led to new patterns of consumption, and consequently distribution requirements are evolving. The balance of power in the world's economy has shifted, and supply chains will have to reflect these changes if they are to be fit for purpose in the new market environment."

Can trucking here in the good old U.S. of A benefit from such growing demand? You bet it can, especially as over 80% of the world's population resides in those very same "emerging markets." And if the “near-shoring” trend keeps gain steam – whereby more manufacturing operations come back to U.S. shores – truckers could be hauling far more export materials to U.S. ports (sea and otherwise).

That can only be a good thing, at least from where I sit.

 

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