"Shippers want freedom of choice in logistics solutions"

Column by Pirke van den Elsen - Chief Digital Officer

Pandemics, climate change and political tensions are continuously disturbing the global supply chains. Organisations which are dependent on one source for the supply of essential raw materials are more vulnerable to disturbances. Shippers need to broaden their network if they are to remain resilient during uncertain times. But how do you develop a future-proof ecosystem?

Many organisations are already actively using a range of suppliers in order to increase their resilience and limit the risks. Companies are purchasing raw materials from multiple regions, cooperating with diverse parties and establishing production facilities in different parts of the world. This reduces their dependency and ensures continuity.

Less dependency
In bulk logistics too, we are seeing shippers cooperating with multiple transporters, making them less dependent on one single party. However, this approach doesn’t always provide full protection when big disturbances occur. A better strategy is to have multiple transport options, with various modalities operating at the same time. This not only reduces the vulnerability to disturbances, but also offers new possibilities. Combining, for example, the speed of the truck with the cost effectiveness of a ship and the environment friendliness of a train.

Increasing complexity
However, this does make the management of a supply chain more complex. The identifying, qualifying and managing of suppliers costs shippers time and resources. And the setting up or scaling down of a supplier ecosystem in new regions also requires knowledge and skills. All this while the overall impact on costs, supply guarantee and environment is often unknown.

Personalised choices
I see a role for logistics service providers in helping shippers to meet these challenges. How? By offering fast, reliable, cost-effective and sustainable logistics solutions. And all at the same time, if possible. But let’s be realistic – this too is all about the right choices. Some shippers are inclined to pay extra for the most reliable service, while others are actively seeking greener solutions. The trick is to offer personalised and available solutions.

Cooperation in the future
To succeed in this, logistics service providers require insight into the preferences of the shipper, based on a personal relationship, trust and transparency. That calls for a new form of cooperation whereby we concentrate together on minimising costs, emissions, timescales and delays. For this, the management of data analysis is essential in order to make the various alternatives visible. The constant adapting of the best logistics solution to the reality will require cooperation that goes beyond a periodic negotiation.

Logistics service providers will have to endeavour to make the best solution transparent, so that we can conduct a meaningful conversation. Shippers, on the other hand, who are in a position to choose the most fitting logistics solution on the basis of multiple factors, are the organisations which will remain relevant in a world subject to constant change.