Freight Conference Enlightenment

Last week’s World of Freight Summit in Vienna, attended by Publisher David Priestman, featured two days of panel discussions covering the major current topics. Here’s what he learned:

Freight procurement processes have shortened to a monthly rhythm, as typically opposed to annually, especially for aircargo. This has been caused by ongoing supply chain disruptions. Frequent procurement is made possible by digitization and index-based pricing. There are more RFQs, for sea freight too, which is trending towards quarterly procurement. Frequent quoting is inefficient for both parties so automated bidding helps. Execution is key too. “If you have a nice freight rate but you never get it on a ship that’s no good,” Bernard Schmaldienst of Transporeon said. There is a need for interoperability, connecting so many partners in a supply chain with the goal being unification and standardization. Practical issues persist, such as the driver shortage and lack of young drivers. We may see autonomous trucks on hub-to-hub routes soon.

“The more ecological a supply chain the more efficient it is as you’re not wasting resources,” stated Peter Menky, boss of DoDo. Green logistics was a core theme at the conference. As Drees & Sommer’s Georg Stadlhofer put it, “sustainability is a pre-requisite, there’s no other way, no discussion any more when constructing new warehouses.” The challenge is in updating older distribution centres. Rather than ‘green washing’, genuine internal and external improvements are needed, which the panellists felt is hardest with owner-occupied sites. For new-builds the investor, developer and occupier need to be aligned. Heat pumps and solar panels are in vogue.

In terms of warehouse location, brownfield sites are popular again. They have the location and facilities but often will need multi-storey solutions to meet urban demand. Location is still key and the target and source of products determines that. There is a need to triple warehouse development in order to meet a 30 year target of modernising and re-developing all of Europe’s DC property.