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Brexit and the election of Trump as US president leads rising tide of populism
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More consolidation for 2017
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Supply chain digitization to continue at a fast rate
Now that 2016 is behind us, we look to 2017 with hopefulness, excitement and a bit of dread. The 2016 political scene was one that left many free-market proponents shaking their heads in dismay while global economic data indicated slight overall gains with the US leading the way. Meanwhile, the ocean freight market witnessed some of the most disruptive trends it has seen in years as Hanjin finally collapsed and carriers looked to one another for survival. While the ocean freight market struggled, supply chains throughout the world took advantage of technology to improve efficiencies and customer relations.
Building Walls
As we noted in an earlier blog post, the election of Donald Trump as the 45th US President and the UK’s Brexit decision has led a rising global trend of populism. Unfortunately we expect this trend to continue this year as more countries follow with restrictive protectionist measures. We are already beginning to see some of this as Ford caved into Trump pressure by recently cancelling its plan to build a $1.6 billion manufacturing facility in Mexico.
As such, these ‘walls’ will likely result in not only rising transportation and logistics costs for shippers but costs to decouple global supply chains could increase as well. However, opportunities may exist for domestic transportation and logistics providers as shippers look to either maintain or expand business within various countries.
Consolidation
Oh yes, expect more consolidation this year. A recent survey from Logistics Trends & Insights LLC we shared on social media notes that over 70% of respondents expect more consolidation in the ocean freight market. Will Maersk continue to fatten its portfolio via more acquisitions this year? Will we see Yang Ming and Evergreen merge as rumors suggest?
Finishing 2016 in a strong way, will we see consolidation attempts in the airfreight market? Finally, how about 3PLs? After an active 2015, 2016 was fairly quiet with mostly niche acquisitions and few blockbuster ones. We expect 2017 may see a slight pickup in consolidation within the 3PL space in specific geographies such as North America, Europe and Asia.
Digitizing Supply Chains
The cloud, big data, the Internet of Things, 3D printing, augmented reality, virtual reality and other technologies are changing the supply chain as we know it and will continue to do so this year and beyond. These technologies are tearing down silos and improving efficiencies across organizations.
According to PwC, “a variety of business networks and collaborative cloud-based platforms are emerging that work much like social networks to allow companies to interact with supply chain stakeholders fully and quickly”. In addition, these technologies are providing much needed visibility across all aspects of the supply chain and allowing for improved procurement practices as well as a large amount of data that can be utilized for strategic goals such as new products and services.
As digitization continues to take hold of supply chains, we at FreightHub are contributing to this new mindset by being the first digitized freight forwarder.
What Do You Think?
What other supply chain trends do you expect this year? Share your thoughts with us, leave your comment below. In the meantime, be sure to sign up for our newsletters to keep up with the latest industry news.
