Facts and figures: Logistics and supply chain management
Sep 05, 2019 Comments (0)
How much will it cost to deliver a package in the future? What were the three biggest supply chain risks last year? Here are some interesting statistics around logistics, supply chain and global trade.
The average transport costs in trade logistics amount to EUR 1.80per kilometre. More than half (55%) of the transport costs are accounted for by personnel, especially drivers. Each driver costs trading companies an average of EUR 43,390.00 per year. At 16 percent, fuel costs account for the second largest share of the overall costs. The costs for truck tolls amount to an average share of only 4 percent. Route-planning systems are the most important measure for reducing transport costs, followed by cooperation with other dealers or suppliers, in- and outsourcing measures as well as driver training.
About 9 out of 10 companies expect benefits from a digital version of transport documents if they were also legally recognised in the future. One in two companies (50%) says that it would help them very much, another 38 percent say that it would be rather helpful, according to research conducted by the German digital association.
Trucks driving on motorways do not only transport supplies for the supermarket or gearboxes for the car manufacturer, but also stacks of paper, because drivers still have to present physical freight accompanying documents or customs documents; sometimes entire folders are required – an anachronism given the digitisation of logistics.
The analysis “Last Mile 2028” by consulting firm Oliver Wyman estimates that in ten years’ time, the cost per parcel will be EUR 4.50 as opposed to the current cost of around EUR 2.50 per parcel, due to the continuing growth in parcel volumes, which will also increase demand for delivery drivers. This in turn will lead to an increase in hourly wages, from currently around EUR 15 to up to EUR 30 in order to counter the worsening driver shortage and make the job more attractive. Rising staff costs alone will almost double delivery costs per parcel by 2028.
The three biggest supply chain risks worldwide in 2018 were attributed to three factors: Uncertainties about trade flows, cyber security incidents, and climate change associated with extreme weather conditions. In trade, uncertainty increased due to disputes between the US and other countries – particularly China – over new unilateral import tariffs. Another problem is the lack of clarity surrounding Britain's exit from the EU: in the event of a disorderly exit, companies fear congestion at the border and delays at ports.
With regards to cyber security, an increasing number of supply chain incidents and transport infrastructure disruptions have shown how keen criminals are to blackmail companies, obtain trade secrets, or cause economic disruption. Last but not least, in 2018 (the fourth warmest year since climate data was recorded), climate change caused a host of weather-related disruptions affecting supply chains – with droughts, forest fires, low water levels, and melting ice.
Digitisation is having a major impact on the working environment and the way people work. With more and more machines, robots, and computers taking over activities, IT specialists are not the only ones in demand. Digital skills will be needed by all employees – even for simpler everyday tasks. Yet only 57 percent of the companies invest specifically in the further training of their own employees for the digital world of work.
The general trend is that the larger the company, the more frequently it becomes involved in continuing education. But small and medium-sized companies above all seem to be discovering the urgency of further training their staff in digital matters: Whereas in 2016 only every second company with 100 to 499 employees invested in further training for digital skills, today this number has risen to six out of ten companies.
Geoff Taylor is Managing Director of AEB in the UK and has been with the company since 2017. Together with his team, Geoff works closely with manufacturers and traders across industry sectors to understand the impact of market developments on global trade processes and what it takes to build efficient and flexible supply chains in the digital age to ensure future success.