Transcript Document

Where is the Logistics Service
Provider (LSP) Industry Going?
LQ Symposium
April 20, 2006
Global Logistics
Market Trends
Global Logistics Market Value
800
10.0%
700
Estimate
9.0%
8.0%
Actual
7.0%
500
6.0%
400
5.0%
300
4.0%
3.0%
200
2.0%
100
1.0%
0
0.0%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Logistics market continues
to expand rapidly
Source: Datamonitor D A T A M O N I T O R 2005
Year
%Growth
USD (Billions)
600
Market Segmentation 2004
Retail
7%
4%
Automotive
2%
Hi-Tech
16%
Pharmaceutical
Consumer
Electronics
71%
Source: Datamonitor D A T A M O N I T O R 2005
Geographic Share 2004
3%
29%
35%
Asia-Pacific
US
Europe
Rest of the World
33%
Market Shared between
Key regions
Source: Datamonitor D A T A M O N I T O R 2005
Key Drivers for LSPs
• Changes in sourcing behavior – pursuing lower costs with
adequate quality
– This ‘globalization’ creates logistics complexity
• Changes in outsourcing behavior –
– This increase in complexity drives the desire for simplicity
• More and more companies are pursuing business strategies
to outsource more and more bundled business processes
Future Industry Trends
• Evolution towards broad
supply chain solutions
• Increased outsourcing of
transaction based
activities
• Enhanced 3PL provider
technology capabilities
• Deeper client industry
focus and expertise by
3PL providers
• Continued expansion,
acquisition and consolidation
of 3PL industry
• Expansion into global
markets
• Further clarity and usage of
4PL(LLP) solutions
• Enhanced long term
relationship management
capabilities
Source: CAP Gemini - Findings from the 2004 Ninth Annual Study
Outsourcing Triggers Mean Rating
2.73
2.66
New management team
Hardware/system upgrade or refresh
2
1.97
1.92
Software upgrade
Conducted thorough internal cost analysis
Business transformation
Merger or acquisition
Outgrew existing infrastructure
Unsuccessful software implementation
Approached by an external service firm
Source IDC The New Face of BPO: Customer Adoption Patterns
for Logistics BPO
1.45
1.22
1.19
1.17
% Logistics Budget Outsourced
Company Size
$1B +
$500 - $999 M
10.7%
15.1%
$100 - $499 M
Source IDC The New Face of BPO: Customer Adoption Patterns
for Logistics BPO
56.9%
Service Provider Rationalization
SC Integration
Professional
Services
Supply Chain
Solutions
Single
Logistics
Service
Multiple
Logistics
Products
Bundling
No. of Services
Integration and Alignment
• Integration – the linking of business processes from previously
independent activities
Process
1
Process
2
Process
3
Process
1
Process
2
Process
3
• Collaboration – the ongoing effort of sharing pertinent information
to continuously align expectations
Collaboration Trends
Low
Value
Both want the progression but don’t have a
framework to manage the journey
High
Value

Commodity Price


Interchangeable
Product
Customized/
individualized


Some
customization
Shared risks &
investment

Flexibility/levels of
service

Process & data
integration

Deeply integrated

Special knowledge

Solutions oriented
Mutually
dependent

Shared rewards

Highly specified
deliverables

Source: Mike Nevin Consulting - 5 year cross industry study
Summarizing . . .
• Globalization means more complex supply chains
• Manufacturing costs down but …Logistics
complexity & costs up
• Global logistics integration is the challenge
• Maintaining Relationship Alignment is key to
successful collaboration which leads to strong
partnerships
DB Logistics has four strong business
units
Transport
& Logistics
Air &
Sea Freight
Land
Operations
Contract
Logistics
Rail Freight
Transport
Combined, we hold excellent market positions
in global air, sea freight and logistics
BAX and Schenker
European Land
Transport
Global Air
Freight
No. 1
No. 2
BAX/Schenker
2.1%
Global Sea
Freight
Global Contract
Logistics
USA Integrated
Heavy Weight
Freight
No. 3
No. 6
No. 3
DHL/Exel
12.6%
KN
5.5%
DHL/Exel
4.7%
UPS
17.8%
7.0%
DHL/Exel
5.4%
TNT
2.4%
FedEx
16.1%
3.2%
KN
1.3%
BAX/Schenker
9.8%
DHL/Exel
DHL/Exel
2.0%
BAX/Schenker
DFDS Transport
1.1%
UPS
4.6%
BAX/Schenker
Dachser
1.0%
Panalpina
4.5%
Panalpina
2.9%
Ryder
1.0%
Geodis
1.0%
KN
3.6%
SDV
1.9%
Wincanton
0.9%
ABX
0.7%
EGL
3.0%
Expeditors
1.9%
BAX/Schenker
0.8%
2.5%