Home » 3PL/4PL, Breaking News » Asia Pacific logistics trends forecast for 2020

Strong e-commerce growth, aggressive M&A activities, and increased collaboration are among the eight trends seen in logistics in Asia-Pacific this year, according to a top logistics executive.

Jan Harnisch, COO of Global Products Air & Ocean at Rhenus Logistics, said e-commerce will remain a strong driving force in 2020, especially in Southeast Asia, as players such as Amazon, Lazada and Shopee push their expansion in the region. Rhenus also sees a shift from air freight to ocean freight on short sea distances. Major e-commerce players will also rely even more on direct airline cooperations.

Mergers and acquisitions will continue their aggressive pace “in response to developing economies of scale, improving digitalization through technological improvements and geographical and vertical diversification,” said Harnisch in a media release. Driving consolidation will be the ability to offer end-to-end and integrated solutions.

In 2020, too, more collaboration will be expected between the shippers and third-party logistics companies. “The focus will be on creating long-term partnership models, enabling a win-win situation in terms of cost and service. The trend of 2PL and 3PL players collaborating amongst themselves will create an ecosystem for cost-effective and efficient solutions,” said Rhenus.

Another trend is substantial infrastructure investments by government and private enterprises, especially in India and Indonesia. “This will lead to ease of movement and substantial improvement in the quality of infrastructure,” said Rhenus.

Also expected is the introduction of innovative solutions to reduce inefficient processes, with focus on sustainability.

“The use of IOT in the industry, such as sensors, will become more prevalent in logistics, enabling a much higher degree of transparency, from inventory tracking to RFID tags which measure location, temperature or humidity. This increased visibility will decrease reaction times and highly improve decision making,” said the release.

Another trend is to go “green” in reaction to customer trends. The industry will see a need for greater accountability in their environmental impact and measures. The ocean freight industry is now complying with the new sulfur cap, while warehousing companies will need to look at developing innovations to raise operations efficiency, labor management and waste management.

Moreover, leaner and agile supply chains with end-to-end visibility will be implemented through the latest technology. Price-driven freight will move to digital platforms while service-driven or integrated services-driven business will move to logistics players. There will be increased differentiation between solution-oriented service providers versus capital / infrastructure-intensive service providers.

Finally, the ripple effects of the trade war between China and the US will continue well into 2020. Similar to 2019, Taiwan, Thailand and Vietnam will be the beneficiary of the trade war, with even more investment from Chinese companies in ever-growing industries such as automotive, telecom, and computing.

But China will also continue to see its homegrown products competing with the best in the global market. Shanghai, with almost 70% of the import business of entire China, will continue to be an investment haven. “As will Hong Kong, which continues to hold strategic business importance for companies investing in the Greater China market, despite the ongoing disturbances,” said Rhenus.

Photo by Shopify Partners from Burst

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