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Analysis of Trade, Infrastructure, Digital Technologies, and Regulatory Trends and their Implications for Transformational Growth Strategies
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The economic environment remains strong due to increasing domestic demand, favorable employment conditions, and high consumer confidence levels. Growth momentum is expected to be sustained in 2018, with the regional economy expected to grow by 2.1% in 2018. However, trade tensions, increase in energy prices, and uncertain policy environment are expected to have a negative impact on business confidence. Increased supply chain networking, transshipment, expedited trade negotiations, and improving connectivity with Central Asia and East Asia Eurasia land bridge as part of ‘One Belt, One Road program’ with regional transportation infrastructure initiatives are expected to enhance the efficiency of freight transportation in the region.The road freight transportation segment is the major contributor to the region’s logistics industry, considering the total freight movement of goods compared to other modes of transportation. This segment is largely fragmented, with the regional service providers holding 15% of the market while the remaining 85% of this segment is controlled by medium- and small-sized service providers. eCommerce has emerged as a major driver of growth for both storage and warehousing segment and courier express and parcel segment. Europe contributed about 15% of global GDP and 20% of world trade in 2017. With key trade partners being located in North America, East and Southeast Asia and Africa, sea-borne trade is a major transportation mode in the region. The share of air and land transportation is expected to increase due to growth in hi-technology, pharmaceuticals, and eCommerce demand. The European logistics industry is considered to be an early adopter of technologies and innovations. With regard to the logistics industry, productivity, process efficiency and speed of delivery, and last-mile delivery costs have been the crucial factors that influenced the growth and profit margins. With the emergence of the digital environment, traditional service offerings are increasingly being replaced with innovative logistics solutions driven by digital technologies. Digitalization of core business operations with technologies is expected to facilitate the logistics service providers to transform their business by adopting innovative business models. This study analyzes key trends and their implications relating to Industry 4.0, emission regulations, cross-border trade, infrastructure modernization, and industry digitalization and their implications for the logistics and supply chain service providers. Specific digital technologies covered include augmented reality, autonomous transportation, blockchain, cloud digital platform, data analytics, drones technologies, Internet of things (IoT) robotic systems, and 3D printing. This research identifies the potential disruptive impact of the technologies on logistics segments such as freight transportation, logistics, warehousing, supply chain, and last-mile delivery solutions in the European region till 2025.
Process efficiency and speed of delivery have always been the crucial factors for logistics service providers. With the emergence of digital environment, optimal and innovative logistics solutions are being offered by service providers; this leads to significant improvement in efficiency and productivity. This study analyzes the disruptive trends such as Industry 4.0, emission regulations, cross-border trade, infrastructure modernization and industry digitalization and their implications for freight transportation, logistics, warehousing, supply chain, and last-mile delivery solutions in Europe.
Key Issues Addressed
Author: Suriya Anjumohan
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