Home » 3PL/4PL, Breaking News » Report: supply chains need to adapt as power shifts to emerging markets

Economic power is sliding toward the side of emerging markets, a development that supply chains will have to take into serious consideration in their strategic planning activities, according to the latest report of Transport Intelligence (Ti), a research and consulting company for the global logistics industry.

Demand for logistics services in emerging markets is outpacing that of developing markets, their growth recorded at 9.4 percent from 2011 to 2012 against the global contract logistics market’s 3.4 percent for the same period, Ti said in a media release.

Some of the biggest growth rates were noted in emerging countries within Asia and the Middle East at 10.8 percent and 10.6 percent, respectively, according to Ti’s latest report, “Global Emerging Markets 2013.”

“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,” said John Manners-Bell, CEO of Ti. “The development of the Middle Class in regions such as Asia, Latin America and even Africa has led to new patterns of consumption, and consequently distribution requirements are evolving.”

He further pointed out that with the balance of power in the world’s economy shifting, “supply chains will have to reflect on these changes if they are to be fit for purpose in the new market environment.”

Combined, emerging markets have witnessed impressive economic growth over the past few years in comparison to developed economies such as the European Union and the United States and present great opportunities for logistics and transportation providers, Ti added.

They have expanded their share of the percentage of global import and export value over the past four years. From 26.1 percent of total global import value in 2009, emerging markets now comprise almost a third of global import value at 30.8 percent.

For global export value, emerging markets were responsible for 31 percent of global export value in 2009 and have increased their share to 35.8 percent by 2012.

Over 80 percent of the world’s population resides in these emerging markets, which represent a diverse collection of economies from China to Peru and Ethiopia to Kazakhstan.

But despite often being described as a single group, each emerging country presents a unique opportunity and comes with its particular risks, making it imperative for logistics providers to get to know their target markets well.

“Political upheavals such as in Egypt, natural disasters as observed in Thailand in 2011 and domestic economic issues in Brazil and India are among the many supply chain risks that must be taken into account,” Ti said.


Photo: Andrew Turner

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