Logistics: A Panel Discussion on Current Trends, Opportunities, and Challenges
• Consulate General of the Federal Republic of Germany in New York
• German American Chambers of Commerce, Inc. (GACC)
On behalf of the Consulate, Deputy Consul General Kai Hennig welcomed the audience and pointed out the importance of logistics, in particular for an export-oriented economy like Germany, which depends on reliable partners for transportation and distribution. In his introductory remarks, Michael Blank of the German American Chamber of Commerce further stressed the significance of efficient logistics for the wealth of the nations, calling special attention to the fact that logistics is an essential business component of the global economy, given today’s global production processes, worldwide supply chains, and worldwide distribution networks.
The panel was moderated by John-Paul Clarke, Associate Professor at the Daniel Guggenheim School of Aerospace Engineering and H. Milton Stewart School of Industrial and Systems Engineering and Director at the Air Transportation Laboratory of the Georgia Institute of Technology, and included HeinerMurmann, Member of the Board of Management at Schenker AG, responsible for Air and Ocean Freight and CEO of DB Schenker in the Americas; Jack Allen, Senior Director of Logistics and Manufacturing Solutions for Cisco’s Supply Chain Operations group; Gary Cleave, Senior Vice President, responsible for Corporate Sales & Customer Service across Region Americas at Hapag-Lloyd; and Alexander Karst, Director of Sales and Handling for the USA Northeast & Mid-Atlantic for Lufthansa Cargo, which is based in New York.
The panelists discussed several of the major trends in logistics, including accelerated globalization with a regional shift towards developing countries and rising oil prices. The latter have become an increasingly important factor, as fuel currently represents more than 45 percent of shipping system costs. The panel also addressed several other trends that are currently shaping the future of logistics, including increasing environmental regulations, the growing volatility of all relevant elements within the transportation process, and technological developments which require companies to focus on data and e-commerce in addition to the physical movement of goods.
All of the speakers emphasized the importance of close collaboration between companies and their logistics providers in order to optimize the transportation process. With this in mind, Mr. Murmann and Mr. Allen jointly presented the concept of an innovation partnership with increasing levels of mutual investment, which they successfully implemented between their two companies, and which, over the last five years, has resulted in a global strategic partnership network for Cisco.
The panelists shared their successes, but also identified some key challenges in present-day logistics. Mr. Cleave pointed out some of the difficulties that arise from the growing size of container vessels. This development requires the expansion of ports and changes to bridge heights and locks along the shipping route–processes that generally move more slowly than the rapid development of vessels.
Mr. Karst identified current challenges in airfreight logistics, in particular, container shipping’s heightened competition with passenger aircraft, which are now able to carry sensitive commodities as well, thanks to improved technology. He also noted a lack of progress in automation and electronic communication, explaining that important documents are still printed and stamped.
The audience questioned the future need for the forwarding industry in light of the more sophisticated integrator business, but panel experts insisted on the continuing necessity of forwarders, arguing that the transportation of individual cargo cannot be standardized. The speakers nonetheless admitted that a higher degree of automation needs to be achieved, and data and information more efficiently employed, to optimize logistics processes.