Transportation and Logistics Industry

Crucial for economic growth and trade, transport sector is witnessing growth after recession but still is highly affected by global energy prices. With companies from developed world entering into emerging markets, there is focus towards localization and outsourcing of major transport and logistics facilities by many industries. Developing infrastructure, efficient supply chain and flexible systems to absorb the external volatilities of price shocks and global warming will be the major factors responsible for growth of companies in transport and logistics industry.

Key trends shaping the Industry:

Government Interests: Governments are investing in transport infrastructure. More projects are coming up in countries lagging in infrastructure and private companies are working in tandem with Governments to build the facilities. In developed countries, there is increased emphasis on efficient maintenance of transportation facilities to reduce waiting times. More projects are outsourced by Governments to private companies to ensure efficient services.

Increased Outsourcing: Globalized world has made inroads for international companies to enter in new markets. To ensure success in new markets they are increasingly outsourcing their supply chain activities to 3PLs and focusing on their core competency spurring growth in this segment. Efficient players in this segment who can manage their systems well will witness faster growth. Supply chain consulting services would become more and more crucial for 3PLs as the trend picks up steam.

Technology Penetration: As benefits of IT become tangible, traditional transportation and logistics companies are adopting it more and more to increase internal efficiency and customer satisfaction. This segment is poised to grow faster in transport and logistics sector in coming years.

Challenges facing the players involved in the industry:

Infrastructure: For emerging economies, infrastructure bottlenecks cause high cost per transaction and loss in efficient logistics and transport services.

Environmental Sustainability: Developing environment friendly mechanism of transport and logistics without affecting the efficiency will be the key to growth.

Energy Prices: Cracking the puzzle of how volatile fuel prices affect the supply chains of transport and logistics sector will be critical to strategy formation and future growth of players.

Regulatory Issues: The degree of privatization of state owned transportation and logistics and the regulatory norms for transport will decide the rate of growth of transportation in emerging economies.

BMGI’s Expertise in Transport and Logistics Area

BMGI’s long standing association with players in air transportation, shipping, ports and logistics area has enabled us in dealing with different issues challenging different segments. Our supply chain consulting services has helped in solving issues related to transport efficiencies, deregulation and high price elasticity in air transport. On the other hand, our authority in lean principles has been of extensive use in ports and shipping industry to bring cost efficiency. BMGI’s strong foundation in this area can be used for improving operations, strategy and organizational culture.

To know more about our Transportation and logistics Industry Practices, Give Us a Call