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Eur. Transp. Res. Rev. (2012) 4:1–18
DOI 10.1007/s12544-011-0069-y
ORIGINAL PAPER
Strategic scenarios of global logistics: what lies ahead
for Europe?
Marco Mazzarino
Received: 9 October 2010 / Accepted: 18 December 2011 / Published online: 8 January 2012
# The Author(s) 2012. This article is published with open access at SpringerLink.com
Abstract
Introduction The current global crisis and other socio-economic and political events highlight the need for a better
understanding of future (medium/long term) developments
in transport and logistics systems and networks worldwide
in a context of sustainability. Quite surprisingly, although
transport and logistics are rather relevant sectors in global
growth and trade, literature on future scenarios of logistics
systems, identifying potential agents of change and forecasting new trends in global patterns of medium/long term
logistics flows, turns out to be quite limited. While purely
quantitative forecasts of logistics parameters and variables
are easily available from a variety of sources, we found that
studies using qualitative and strategic approaches in the
building of future scenarios are mostly developed for sectors
other than logistics and transportation (e.g., manufacturing).
Therefore there is the need to address the issue of scenariobuilding in the field of global logistics through an efficient
strategic method. Although few studies (the most relevant
being Lapide’s MIT SC2020 Project: Supply Chains
Futures) have thus far adopted it, the Strategic Planning
Approach (SPA) provides just such methodology.
Methods The paper seeks to fill this gap by employing a
quali-quantitative methodology based on the SPA to provide
a number of macro medium term scenarios in the field of
global logistics and assessing the impacts on the European
area. Following a comprehensive literature review, a
M. Mazzarino
Università IUAV di Venezia – Transport Research Laboratory,
Ca’Tron, Santa Croce 1957,
30135 Venezia, Italy
M. Mazzarino (*)
Puglie Di Domio 143. 34018 San Dorligo della Valle,
Trieste, Italy
e-mail: mazzarin@iuav.it
preliminary grid of main drivers of change is derived to be
presented for focus groups analyses. The groups are representative of both supply and demand perspectives within the
global logistics sector.
Results The analyses are conducted in a semi-structured
interviews format where a number of strategic scenarios
for global logistics are built – each scenario defined in terms
of a combination of strategic drivers. In particular, results
show how a specific model at the macro level – Symmetric
Global Logistics Model (SGLM) – will be likely to prevail
on a global scale, in which two fundamental sub-components (local/global) will play a determinant role. The impact
of the SGLM is then strategically assessed with regards to
European logistics systems.
Conclusion In conclusion, Europe is likely to face a strengthening of both its logistics and industrial capabilities – though
at a different pace of development with respect to emerging
economies – in a context in which North African and Eastern
European markets will play a fundamental role in productionlogistics platforms.
Keywords Global logistics . Logistics networks .
Scenario-building . Network design
1 Introduction
The aim of the paper is to provide a number of probable
future scenarios concerning the development of logistics
networks (procurement, production and distribution) on a
global level in the medium/long term by using a qualitative
and strategic approach, and assess the strategic impacts on
the EU area. In other words, we try to envision how logistics
networks will look like in the future. Scenario-building is an
indispensable tool for policy-makers as it seeks to create
reliable guidelines to facilitate the most productive courses
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of action. The following scenarios are intended as illustrations of potential future patterns in logistics flows among
major global regions (logistics platforms).
In our research, quite surprisingly, even though transport
and logistics are rather relevant sectors in global growth and
trade, literature on future scenarios of logistics systems,
identifying potential agents of change and forecasting new
trends in global patterns of medium/long term logistics
flows, turns out to be quite limited. Specifically, there is
an incredible lack of studies employing a qualitative and
strategic approach to these issues. While purely quantitative
forecasts of logistics parameters and variables are easily
available from a variety of sources, we found that studies
using qualitative and strategic approaches building future
scenarios are mostly developed for sectors other than logistics
and transportation (e.g., manufacturing) [41].
Additionally, in building a reliable scenario of global
logistics, it is essential to address the issue concerning the
employment of a functional strategic method. Current working methods must be complemented by a more strategic
vision of the future based on qualitative approaches such
as the Scenario Planning Approach (SPA). Since few studies
employ the SPA methodology to address the issue (the most
relevant being [26]), this paper tries to fill the gap by
employing a quali-quantitative methodology based on the
SPA. We decided to overlook approaches commonly found,
for instance, in regional economic theory as SPA methods
are known to produce a robust view of the future [29]. SPA
[7, 41] involves some visionary and provocative perspectives compared to conventional approaches, giving some
new insights on scenario-building for global logistics. The
key differentiator of the SPA is an acknowledgement of the
future’s margin of variability, as suggested by an overlapping and often conflicting array of available forecasts. The
details of the approach are laid out in steps and they deal
with both quantitative and qualitative aspects in logistics
networks’ future developments.
The paper is organized as follows. We begin with a
presentation of a literature review on the issue of SPA as
applied to the logistics sector. Subsequently, the SPA methodology is introduced in detail and its application discussed.
In the methodology, the first procedural step consists of
identifying a number of macro-factorial—key drivers—
trends and challenges determining changes that in the medium/long term can be deemed significant to the design of
global logistics systems and networks. Secondly, key drivers
are combined to construct one or more scenarios. More
rigorously, a scenario can be defined in terms of a probable
combination of some or all the drivers [2936].
An analysis of the literature is performed to largely address
the first procedural step–identification of a grid of key
drivers–while the scenario-building process – the combination
of major drivers – is developed through what in the Scenario
Eur. Transp. Res. Rev. (2012) 4:1–18
Planning literature is termed brainstorming—a series of semistructured interviews and focus groups comprised of some 6
to 10 representatives from major logistics players.
Key drivers’ analyses and discussions are performed to
produce a number of scenarios from which to draw conclusions and assess some strategic impacts on European logistics.
2 Literature review
One of the few relevant studies employing SPA methodology
to the future of logistics networks (in particular, supply
chains), [25, 26, 43, 45, 46, 47, 48] aims at a definition of
excellence within the field of logistics/supply chain. It first
identifies critical current and historical factors determining the
success of a logistics/supply chain. The identification of some
drivers of change and their possible impacts on logistics
networks subsequently allow these excellence models to be
projected into the future.
Figure 1 summarizes the MIT study [26]:
Although experts and researchers commonly rely on historical data to develop a singular view of the future, [42]
underlines how when predicting the future uncertainty plays
a major role. In this sense, forecasts essentially replicate
history and have a limited view of what is plausible in the
future. Instead, the future is open to multiple interpretations
and is not anchored solely to the precedents of the realized
past. [43], by referring to the MIT study SC2020, highlights
the relevance of Scenario Planning to predict future supply
chains (Fig. 2).
A Scenario is defined as a self-consistent story of possible future world derived by a host of macroeconomic factors
and relevant government actions [46]. When using scenario
planning, actors need not predict the exact future, rather the
scenarios provide forethought on the range of possible
Fig. 1 The Supply Chain 2020 Framework. Source: [26]
Eur. Transp. Res. Rev. (2012) 4:1–18
Fig. 2 A different approach for the exploration of the future. Source: [43]
relevant contingencies—“forethought, but not forecasting”
[46].
It is also well known [47] that forecasts and predictions
about the future have little chance of realization regardless
of the methodology or model used—especially where very
long term forecasting is involved. In [47], the Scenario
Planning Approach, where the future’s uncertainty is taken
into account, is recommended. Moreover, the literature review
shows that there is a tremendous lack of published structured
studies that look at the future of supply/logistics chains using
this approach [46]. Therefore, we try to fill this gap, in
particular by addressing the following research questions [45]:
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what will supply/logistics chains look like in the mediumlong term (say, 2020)?
What macro factors will impact them?
It is noted [47] that most of the literature supports the
vision of a highly connected world in which supply and
logistics chains will be extremely fluid. In this vision, activities throughout the chains linkage are triggered by signals
from end customers, supported by systems that will run efficiently, and facilitated by innovative production, communication, and information technologies. Furthermore, companies
will share information freely and co-create products for the
end customer. However, as it is generally agreed [47] that the
future will not be so perfect, the best approach to forecasting is
an SPA [47] based on a holistic analysis of macro factors. In
our study, we follow this view.
The MIT study [48] provides relevant information on the
identification and classification of probable drivers of
change for the future of logistics and supply chains. However, we note that scenarios are derived without specifying
the impacts on the logistics networks and supply chain
design—our paper’s objective. In other words, the study’s
scenarios are generally conceived as general states-of-theworld; but while these are useful to logistics decisionmakers, they have no relevance on the final configuration
of global logistics networks, whether quantitative or qualitative features. While no likely impact on the configuration of
logistics structures is given, final scenarios (Synchronicity,
Alien Nation, and the Spin City) are defined merely in order
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to enable managers and decision-makers to act in line with
specific environments (states of the world). In our study, the
results provided assess the most likely structure of future
logistics networks and design (which is missing in the MIT
study) as a function of various strategic drivers, thus supporting strategic decisions by companies and public bodies.
Clearly, the logistics and supply chains processes are a
product of complex interactions between macro factors and
the capabilities of organizations. Thus, the future of logistics
chains is inherently interwoven with the future state of
macro factors. Interestingly, in the literature [47] most of
the studies fall into two categories, namely:
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macro factors: the likely drivers of future changes–generally beyond the control of a single organization—without
any explicit connection with the future configuration of
logistics chains;
supply/logistics chain vision: the strategic or operational
shifts in manufacturing systems—general business
practices—without explicitly identifying the underlying
drivers of future change.
In our paper we try to bridge the gap between these two
categories. We focus on the analyses (mostly through desk
research) of macro drivers that are likely to influence the
logistics chains and through focus groups’ discussions link
such analyses to the expected impacts on logistics chains.
Finally, we give our interpretation of the different views
regarding the impact of macro factors on the logistics chain
design [47].
Similar techniques are employed in [13] where four different scenarios for the European transport and logistics
sector are built, where each scenario provides plausible
hypotheses about the future. A scenario is defined as a
coherent description of possible outcomes of a number of
drivers that may influence and change the shape of the
system over a given period of time. Scenario analyses and
exercises do not presume to predict the future but rather
provide a description of possible future outcomes. Scenariobuilding is designed as a two-stage process [13]:
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first, the main macro drivers of change are examined.
Once these drivers and dimensions are identified, they
are “fleshed out” into plausible and concrete scenarios;
second, the potential implications inherent in different
configurations of macro drivers are examined. This investigation is carried out partly through desk research
and partly by drawing on strategic discussions between
experts and company managers.
Some other studies [18] try to build upon an integrated
architecture of parameters in order to assess the impact on
the design of supply and logistics chains.
In the field of regional economics the issue of future
trends in logistics networks is indicated as an open question
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to the research agenda. [49] proposes a research agenda
addressing the question of the future of global logistics
structures and related challenges. As emphasized in our
paper, this study of the reactions in logistics structures
should not be intended merely in terms of changes in transport costs, but also in terms of changes in strategic key
drivers on a global level. Our paper focuses on the identification of strategic drivers of various nature capable of
producing relevant impacts on global logistics structures,
and therefore well beyond the confines of specific logistics
and transportation aspects (e.g., service level, product individualization, etc.), as is commonly found in regional economics and logistics management literature [14].
Like [49], our paper gives a contribution to improve the
understanding of global logistics networks re-design processes and relative impacts on the economy. But where [49]
focuses on developing better quantitative models and integrating logistics modeling in the spatial CGE, we focus on
the improvement of qualitative and strategic techniques.
Lakshamanan and Anderson [24] focus on the impact of
transport and logistics systems on economic growth. They
first specify the link among transport systems and regional
growth in aggregate terms. They also discuss a microeconomic approach in which the benefits produced by improved transport systems are analyzed at a firm-level. Finally,
they put the analysis in a CGE context. Overall, the main
driver producing positive impacts on economic growth is
considered to be an improvement in transport investments.
FREIGHTVISION [15] tries to envision how European
Freight Transport will be in 2050. It is a policy-oriented study
focusing mainly on the policy actions needed to make the
European transport system more sustainable, in particular by
fixing given targets in various sectors (pollution, congestion,
etc.). Moreover, from a scenario-building point of view, the
project is based on reproducing current (mainly quantitative)
trends into the future, without considering a number of strategic
factors of change.
HOP! Macro-economic impact of high oil price in Europe.
Project funded by European Commission—DG Research—
6th RTD Programme [20] provides for some estimated
impacts on the European economy, including transport, due
to a prolonged increase in energy prices. It uses the POLES
and the ASTRA models in an integrated way to simulate a
number of future scenarios and the expected direct and indirect impacts due to energy prices increase at a European level.
Scenarios are basically built on the basis of a what-if logic, by
making some assumptions on key variables. Clearly, even
though these are traditional methods for scenario-building,
they do not explain the why’s and how’s of key variables’
behavior over the given period.
Some other studies [3] address the issue of improving
logistics performance at spatial level, as a competitive network of global logistics is considered to be the backbone of
Eur. Transp. Res. Rev. (2012) 4:1–18
international trade. In particular, they suggest the use of the
LPI (Logistics Performance Index) in order to compare
various world regions from a logistics performance point
of view and to identify, especially in developing countries,
logistics bottlenecks while facilitating international trade
and transportation.
3 Methodology
It is well known that one of the most relevant elements of
competitiveness at different levels—from micro (single-firm)
to meta (e.g., cluster and districts) and macro (entire regions)—
consists of the capability of making reliable forecasts and
measuring their impact on the performances of the organizations involved.
The Strategic Planning Approach represents an effective
tool for a strategic study on global logistics. The goal of
SPA [19, 39, 40] is not to illustrate the exact future as much
as it is to make actors aware of probable states of the world
and strategically identify the impacts on various systems.
Given that these methods are widely used in a variety of
industries, their use in the logistics sector (procurement,
production and distribution), which along with transportation represent a significant strategic industrial factor for
global growth and trade, is surprisingly limited. On the
other hand, various sources merely provide us with a number of quantitative forecasts on logistics and transportation
variables.
An SPA approach was firstly employed in a seminal
study by Shell Corporation as a powerful DSS (Decision
Support System) to face highly uncertain scenarios related
to the oil crises of 1973 [54, 41]. When aiming at “imagining
the future”, each forecasting technique turns out to have its
own advantages and limitations.
Compared with other forecasting techniques (e.g., contingency planning, sensitivity analysis, etc.), SPA shows some
advantages in that:
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it considers combinations of uncertain events, not single
uncertainties;
it addresses significant interactions among all major
variables, not just a few;
it is less formalized and more flexible.
However, important limitations to be acknowledged are:
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the methods are mainly born from practice;
the methods have a quite subjective and heuristic nature.
As we can see, SPA methods are particularly useful when
dealing with qualitative aspects that could be hardly
addressed by mere quantitative techniques. Furthermore,
SPA methods are recommended in application to long term
Eur. Transp. Res. Rev. (2012) 4:1–18
forecasts and broad spatial dimension where uncertainty
plays a major role. In short, SPA methods are suitable to
highly uncertain and complex forecasts—a most typical
aspect in forecasting global logistics networks.
SPA methodology develops through the following logical
steps. The first two steps are mainly developed on the basis
of a literature review and are concerned with:
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the identification of a number (grid) of key drivers of
change in the field of global logistics;
the definition of logical relationships among drivers for
the establishment of a coherent framework of reference.
Subsequent steps are implement through focus group
sessions (technically, brainstorming) held among leading
companies’ representatives chosen with respects to both
supply and demand perspectives of the global logistics
sector. Such steps are concerned with:
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discussion on the individual impacts on future logistics
networks of each driver;
preliminary scenario-building results (e.g., combining
drivers)
final definition of major global logistics scenarios based
on common views, share visions and general agreement.
We build a supply panel—comprised of various types of
logistics operators (integrators, transporters, port operators,
etc.)—and a demand panel comprised of leading experts and
shippers representing industrial and retailing companies.
Overall, we involved some 15 representatives, averagely
two representatives from each logistics chain in three rounds
of discussion. On the basis of the grid of key drivers presented to them as a result of the first two steps, both panels
are then asked to discuss future scenarios.
The panels takes into account the specifics of logistics/
supply chains in both manufacturing and retailing perspectives, including: “white”, automotive, aluminum, consumer
electronics, textile and clothing, fashion and eyewear, luxury.
Clearly, the selection of the above logistics chains is
arbitrary and partial. However, they refer to relevant economic sectors for the European economy. The structure of
the panels is in line with a typical brainstorming process
within the SPA. Moreover, representatives in the focus
group also provided expertise insight into future logistics
trends often beyond their industry. Our paper’s results mainly represent aspects on a general agreement among these
experts, and therefore across industries, on the future of
logistics networks.
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groups’ discussion in order to identify a clustering of main
drivers of change capable of significantly influencing geoeconomical scenarios [55] in the field of logistics at a global
level [13, 18, 26]. It is important to note that we mainly
focus on macro drivers that are not directly under the control
of the logistics actors, e.g., internal to the logistics systems
[47]. In fact, it is in this field that a relevant gap in the
literature is found.
Focus groups are developed at this stage in order to
conduct a mainly qualitative analysis and discussion of each
driver’s individual impact in the overall scenario-building
process, and assess preliminary logical relationships among
individual drivers.
Identification, classification and analysis of key drivers
[11] should not be viewed as a generic exercise concerning
the shaping of overall global patterns, but must be strictly
applied to the logistics field—the chief purpose of our study.
In our study, results are focused on highlighting a functional
relationship between key drivers and logistics scenarios to
allow interpretation of the drivers’ influence on the design
of a global logistics network. From the analysis of drivers
one should be able to identify specifically:
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the most relevant macro-regions/systems at spatial level
(macro logistics nodes/platforms and markets), and their
main characteristics, especially in terms of relative importance (weights);
the most relevant flows, and their characteristics, among
such macro-nodes.
Each scenario then describes a state-of-the-world in the
logistics field, which is given by a specific pattern of flows
among different macro-regions (logistics platforms) at global
level.
As a result, we can present the following list of key drivers:
a) ecological drivers:
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energy costs;
overall scarcity and distribution of natural resources;
b) economical drivers:
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emerging markets;
balance of global economic power;
trading blocks;
financial and economic crisis;
c) technological drivers;
d) demographic drivers:
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aging population in developed countries;
growth of global population;
4 Identification and discussion analysis of key drivers
e) regulatory drivers and sustainability.
The comprehensive literature review is conducted to derive
a preliminary grid of drivers to be presented for focus
In the next sub-paragraphs we present the analysis of
each driver.
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4.1 Ecological drivers: the cost of energy and the issue
of scarcity and distribution of natural resources
It is generally predicted a production-peak for fossil resources
in non-OPEC countries in 2020, followed by a peak in OPEC
countries soon after. The cost of a barrel in that period would
range between $200 and $400.
These events raise some strategic questions in the field of
logistics [44]:
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will locating production platforms to off-shoring
countries still be the right thing to do economically?
How should global logistics networks be re-designed?
Would it be convenient to re-locate production platforms
closer to home1[10]?
will companies have to rethink its logistics network
design based on a long term sustainability model?
The cost of energy clearly represents one of the main
drivers, since it can heavily influence the design of logistics
networks. Some of the results presented in this paragraph
are among the most important ones in the overall analysis,
and they will be included in the general conclusions. Our
focus groups found that, due to an increase of energy costs,
a clear tendency toward shorter logistics chains around the
world would likely emerge within both procurement and
distribution logistics systems [46]. For this reason, energy
is the most significant factor in the shortening of logistics
chains and the resulting closer-to-home trend. Due to the
energy driver’s trend toward higher costs, logistics and
production platforms must be strategically relocated. But
on a more tactical level, factors such as the availability of
labor, capital, and above all supply chain actors should also
be considered. In other words, one of the most significant
constraints in the re-designing of a closer-to-home logistics
network consists of the availability of hard equipment
(infrastructures, machineries, etc.) and of a good network
of logistics chain actors, especially suppliers. For instance,
many participants of the focus groups emphasize that the
difficulty in moving production and logistics platforms to
China is due not so much to the need of finding employers,
but to the burden of establishing completely new production
and logistics networks and relationships, especially with
suppliers.
We can generalize the issue by asking: if rising energy
costs encourage a relocation of production sources, where
will that relocation be? In other terms: one “comes back
home”, but “where is the market demand”? From our analysis and focus groups some clear results come up: logistics
chains will shorten and main sourcing points will be (re)
located near the market (“we will produce where we find a
market demand”). Major markets—we will touch upon the
issue later on—will be those of the BRICS (and prospectively of MIK)2 countries, while North America and especially Europe will show less relevant growth rates.
In short, there will be a more local on local model of
economic and logistics development.
Energy sources are clearly a relevant driver determining future global logistics scenarios. However, the role of
other (strategic) natural resources—in terms of their
availability and (spatial) distribution—matters as well,
including that of rare materials and water. Indeed, some
experts in our focus groups often pointed out that water
will be among the most important factors of future logistics scenarios. Many production and logistics processes are based on water consumption, thus a reduction of
its availability is certainly capable of producing a relevant impact on them. Companies have then a strong
incentive to make its use more efficient and to lay down
strategies to control strategic sources.3
To the extent to which—as we will see—forecasts on
global GDP would predict a probable global increase and an
eastward shift in economic power [53], a clear tendency
toward a global competition on strategic natural resources
emerges. Scarcity will have inflationary effects on commodity prices. Note for instance [4] the impressive strategy
carried out by China relative to the control of strategic
resources in Africa needed to guarantee its economic development. From a transportation and logistics point of view,
the analysis of flow patterns between China and Africa
represents a very interesting issue to be studied. As of
recently, China has been carrying out an effective strategy
to control strategic natural resources in Africa, which is
based almost exclusively on bilateral agreements including
trade, direct investments, infrastructure provision and loans.
Therefore, on top of scenarios characterized by a more
localized model of development, one should also consider
the development of various strategies—and their impacts on
logistics—aimed at controlling input resources for production and consumption activities.
The issue of resource availability can be referred to the
human ones [8, 32] as well: where will the most significant
innovation processes take place? Consider that:
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These are, for example, some results coming out from a recent
analysis involving about 150 CEO’s of logistics companies worldwide.
From this survey, a significant trend to move logistics platforms away
from Asia and back to the US is identified (11 on 20 CEOs). At the
same time, 20% of CEO’s of European logistics companies is moving
logistics platforms to Eastern Europe [10]
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China and India will “produce” more and more engineers and college-educated students;
Mexico, Indonesia, Korea
For instance, out of the overall costs of environmental footprint in the
“white” sector, some 85% is due to water consumption at home, while
3% is due to logistics activities only …
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interconnectivity enabled by new technologies will not
force Eastern people to move toward Western countries;
systems of intellectual property rights are different in
Eastern countries.
Some provocative results from our analysis relate to the
possibility for some regions—e.g., Europe4—to become like
China today. In fact, for European countries the following
economic scenario could be illustrated:
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a relative role as consumer market, due to the stagnation
of per capita income and a rate of development lower
than that of other world economies;
under-developed logistics systems (tendencies to move
away industrial locations would also result in a downgrading of logistics—move/store—structures and systems
supporting production and distribution activities);
ceaseless migration flows from non EU Southern
countries.
As a matter of fact, these characteristics resemble those of
the initial steps of economic development in China where
notwithstanding a huge availability of workers the consumption markets and logistics systems remained relatively limited.
However, a trend toward shorter logistics chains and a
large availability of workforce would mean for Europe,
especially its Southern regions [30], a formidable driver of
potential industrial and logistics development. We could
therefore envision a European scenario where the currently
strong market for final consumption would be coupled with
a significant expansion of industrial and logistics activities.
As for the quality of human resources related to the
innovation issue we underline how Europe, traditionally
featuring high ratios of educated citizens, could again play
a significant role, with such potential increasing significantly
when we include Eastern Europe. Europe will thus play an
important role also in terms of innovation processes.
4.2 Economic drivers: the role of emerging markets
From both a procurement and distribution logistics point of
view, which geo-economical regions will be the future’s
most important? One of the preliminary issues to be
addressed is the role of China, since China seems to feature
prominently in the scenario planning minds of many companies [46]. What will be its role in the future? Some of the
discussion topics included within what our focus groups
came to identify as the “China question” emerging from
the literature addressed are [46]:
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low-cost producer vs. high-cost consumer market;
In our focus groups we discuss the European case, although some
results can be valid for other world regions as well.
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new global power (virtually independent) vs. probable
risks of implosion and political instability (class conflict,
etc.).
We note that many logistics industries have already carried out investments in China not only with the aim of
developing manufacturing activities–China as “factory of
the world” [50] - but also to improve distribution systems.
A probable scenario would therefore resemble one in which
China develops as a consumer market, leaving some economic gains in developing manufacturing activities on the
ground to the benefit of other countries; and while the share
of domestic consumption on Chinese GDP is still low
(around one third),5 and its increase over time will be at
least gradual, from a logistics viewpoint, a dramatic development in distribution logistics over traditional production
logistics will take place.
Note also that:
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China is already playing the role of hub of productionlogistics networks in East Asia, especially with regards
to countries such as Japan and South Korea [17];
already today, from a detailed analysis of Chinese statistics information regarding trade flows, one can realize
how the Chinese economy is not abnormally export-led
[1, 35] (Fig. 3)6:
Although recent events, such as workers strikes at the
Honda manufacturing plant in Foshan, should be viewed as
a relevant political change, a strong cultural sense of community, effective tools of political control and public order,
make the potential for domestic political instability still
quite unrealistic for China.7
More issues emerging from the “China question” [46]
are: if future scenarios will show a disappearing of China as
the so-called “factory of the world” [50], where will production activities move? Might the locus of low-cost production shift to other countries [46]? Could we revert back
to modest-cost regional production centers? What will be
the relationships with consumer markets? The main point
here is whether or not other countries could replace today’s
China as the world’s main production market. Will there
be another China [50]? Some of the possibilities on the
table are:
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Africa;
Mexico and Latin America/Brazil as possible production
platforms for the North-America markets;
Due to a weak welfare system, an incentive to high savings rates.
Statistical analyses of this kind are quite complex, however they stress
the need of subtracting part of import flows from other countries – mainly
Asian ones – when considering the overall export values of China. A
relevant part of China export activities consists of goods that are imported
from other Asian countries and not “truly” manufacturing in China.
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Clearly, we are dealing with a highly uncertain scenarios (consider,
for instance, the case of Russia..)
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Fig. 3 China’s exports. Source: [1]
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Eastern Europe and Russia as possible production platforms for the European markets;
Other specific opportunities such as Japan, South Korea,
Thailand, Cambodia, Vietnam, Indonesia.
From our focus groups, we get the following results:
&
&
&
8
the role of Africa as a continent is unanimously deemed
implausible. Potentially, Africa represents the only continent having some quantitative dimensions (space,
population, etc.) similar to those of China.8 However,
with its lack of political control and precarious domestic
stability, aggravated by a demographic sprawl on the
territory, Africa could hardly represent a China alternative.
Unlike China [23], where the political control is impressive, Africa’s government of different ethnic groups will
possibly remain an unresolved issue ultimately hindering
economic development. However, while this could be true
at a continent level (which is meaningful when comparing
to China as a whole), really significant regional developments will and are already taking place in Africa,9 fostering
economic development;
Brazil is indicated as a relevant future market, especially
for distribution logistics activities;
similarly, Mexico is viewed as a potential production
market as it features a good availability of low cost
workers, is included in the NAFTA agreement and is
located close to the North-American markets10;
Probable shifts of production activities away from China clearly
should take into account some quantitative dimensions of the Chinese
market
9
See, for instance, the development of the textile-clothing industry in
the Maghreb region and of the food industry in Egypt.
10
As many experts suggest, “the US have some sort of China in the
backyard”. It should also be noted that Mexico is among those
countries less suffering the consequences of the financial crisis (this
being a sign of financial stability) and it is indicated as a potentially
important final market.
other probable alternatives to China indicated by our
experts are countries that already have strong manufacturing and logistics relationships with China (often off-shore
locations of China manufacturing activities)—Cambodia,
Vietnam, South Korea. They will possibly play a marginal
role especially in the medium term.11 In fact, they are
small and legal constraints over production activities are
becoming increasingly stricter;
due to its quite closed economic system, aging population,
high demographic density and unfavorable geographical
features, focus group participants don’t view Japan as an
important player. Some focus group participants say that it
could be an adjuvant contribution to China. However,
Japan surely holds a good technology endowment.
Additional issues to be addressed about the role of
emerging markets concern to the way in which one can
combine the requirements of global markets with the need
of designing fast and flexible logistics networks [46]. One of
the solutions is to rely on standardization of both logistics
processes and products in order to streamline response to
shifts in logistics chain flows while fulfilling market requirements. This happens, for example, at Wal-Mart in US markets, whose logistics chains comprise products quite similar
to one another. By contrast, when market requirements turn
out to be more sophisticated and demanding—for instance,
in the EU area—logistics network design becomes more
costly, and a number of depots or distribution centers on
the territory must be planned to be closer to the final markets. A highly possible scenario may be one based on a
regional model of production-logistics-consumption activities, where logistics chains will be shorter. Shorter logistics
chains imply more reactive logistics models more suitable to
time-sensitive market requirements. Furthermore, shorter
and more reactive logistics chains may favor a further sophistication in market preferences and consumer choices.
4.2.1 The balance of global economic power
Another economic driver of change is the tendency toward a
rebalancing of economic—thus, political and military—
power worldwide [22], whose evidence is given by the
decrease in world’s GDP share in areas such as the US
and Europe and, by contrast, by the dramatic increase in
GDP share in countries like China, India and Russia (Fig. 4).
Concerning this driver, major logistics questions emerge:
to the extent to which the above mentioned areas will
become more relevant as consumer markets, what will happen
11
For instance, Vietnam is often indicated as the next China, since it
has a very cheap workforce (its per capita income is less than a third of
China’s). Some global companies moved there, such as Intel. But
workforce is highly limited in number.
Eur. Transp. Res. Rev. (2012) 4:1–18
9
Fig. 4 Per capita GDP growth. Source:[33]
to the design of logistics networks feeding those markets?
What could be the role of Western economies?
To some degree, the distribution of economic power
among the so-called three empires (US, China, EU) will
depend upon the influence they will exercise on the Second
World countries, in particular on:
&
&
&
&
India [6], which still remains, in many global players’
view, a would-be opportunity, due to its high poverty
rate and difficult geopolitical relationships with neighboring countries;
Russia, which is experiencing a strong decline in population (in 2025 Russia population will be similar to that of
Turkey) and a strong pressure on its natural resources by
China at its Eastern borders. For some experts, such a
pressure could induce a sort of Chinese hegemony. Moreover, Russia is among those countries that suffered significantly the consequences of the global financial crisis;
countries with significant oil endowment—such as
Venezuela, for which Europe represents the first foreign
investor, while China is strongly developing transportation infrastructures there;
Iran, increasingly under Chinese influence (as China’s
access to the Persian Gulf) and less dependent on Western
investments.
Major results we get from our focus groups are:
&
as China increases its share of world GDP, it will no
longer “disturb” European producers from a logistics
point of view, in a sense that its domestic market will
be a major target for manufacturing activities. Indeed,
such extra demand is clearly welcome particularly in the
&
&
current period of global crisis where it acts as a trigger
for production and trade from more steady economies
(EU—see the recent example of Germany—and the US
in particular) [50];
an uncertain scenario looms over India. India has
been perceived as a relevant opportunity for a long
time,12 however it is still at a potential level, although it is
showing relevant growth rates. Unlike China, India
remains somewhat unattractive to foreign investors;
Russia—although opinions vary - probably won’t be a
weak global player, given its good technology and natural
resources. The idea of a Russia under some sort of Chinese
hegemony is regarded, in the view of our focus groups
experts, as not possible. Yet, a regional model of
production-logistics-consumption could be the case also
for Russia.
4.2.2 The role of the trading blocks
Some sources [26] identify 3–4 relevant trading blocks on a
global level: that is, Europe, US, Asia/Japan, China. They
will be characterized by significant:
&
&
in & out trading barriers;
intra trade development.
Again, the main logistics question is: what will be the
consequences on global logistics networks design? Some of
the recent instability events—like the economic and financial crisis, the governance of migration flows, terrorism
12
Also for the availability of handcraft-style production capabilities,
high-skilled human resources and a largely young population.
10
Eur. Transp. Res. Rev. (2012) 4:1–18
threats, etc.—seem to quite strongly favor the above scenario
by means of a number of constraints imposed on the movements of people, goods, information, etc. [47]. Also, such
events make logistics networks rather insecure.13
Main results from our focus groups consist of two key
drivers:
&
&
a regionalized pattern of logistics flows within the
macro-regions should be the prevailing model at spatial
level;
however, probable regulation barriers (e.g., duties, etc.)
will not play a relevant role. Rather, economic opportunities will prevail [43]. In other words, the development
of more localized production-logistics-consumption
models will be induced by the exploitation of strategic
economic opportunities rather than by the imposition of
political constraints.
4.2.3 The role of the financial and economic crisis
The role that the current financial crisis will play on
future logistics scenarios clearly cannot be neglected.
The most relevant aspects perceived by operators basically refer to its duration, while the general impact will
be concerned with the magnitude of logistics flow
among the different areas.
It is out of the paper’s scope to even try to address such a
crucial issue globally. We could simply refer to a recent
study by the Federal Reserve—Morgan Stanley Research
in which short-term (one year), medium-term, and long-term
scenarios were built to assess the potential impact of the
crisis. The study termed a potential exit from the crisis in the
short term simply implausible. The reason, one reads, is
quite trivial: “too much debt”; the problem is simply “too
big in size”. We reasonably think that the effects of the
current crisis will last for still some time14 .
The economic crisis will also generate relevant impacts
on the market structure of logistics, most likely producing a
strong tendency toward oligopoly. The economic crisis represents for structured companies a big opportunity for shopping, whereby increasing market concentration. A number
of strategic alliances among companies and mergers will be
carried out and they will aim at improving the overall
efficiency of logistics processes and reducing idle capacity.
In this respect, many global players underscore how the
current crisis has certainly produced negative effects on
the economy. However, one should remember that an
important excess of overall capacity15 worldwide has been
in place for quite a long time. Therefore, the crisis can also
be partially explained by the economic cycle.
Another comment from our focus groups is that the crisis
will induce strong incentives to operators toward modal
shifts, in particular toward less costly and efficient modes
of transport (railway and maritime transport in the first
place). In fact, operators will focus progressively more on
the efficiency of transport operations, meaning consolidation
of flows and cost savings.
4.3 Technological drivers: the role of IT
IT is important because logistics networks will be more and
more characterized by visibility and virtuality (distributed
entities) in all their relevant elements: flows, stock, assets.
A complete review of IT systems related to freight logistics
at EU level can be found in [16]. IT systems refer to the
combination of ICT (Information and Communication Technologies) in order to optimize transport efficiency and operational sustainability. More precisely, the Freight IT systems
can be defined as “advanced ICT systems aimed at simplifying
and automating freight operations” [16].
The field has seen substantial development in the last
15 years. The introduction of sophisticated systems and
technologies collecting enormous amounts of data about
current status as well as the various logistics planning
parameters concerning the operation of freight transportation
and logistics systems, allow to transmit these data to control
centers and data bases held at authorities, carriers and other
operators.
Initially, Freight IT systems used mainly stand-alone
applications [16] that can be largely classified in the two
categories of commercial operations and fleet management
systems. Most of the technological drivers were developed
in the nineties’ and early 2000’s. The core of such tech
drivers are: mobile transmission technologies (such as
GSM), GPS (Global Positioning System), mobile internet,
the XML standard, various guidance and navigation systems,
onboard sensors, systems and hardware for vehicle or load
unit identification (e.g., RFID).
Now, these drivers are transforming the EU industry and
having clear impacts on the logistics systems in terms of:
&
&
13
Risk management has become a key concept in the design of global
supply chains since the September, 11.
14
From our focus groups it emerges that companies are mainly worried
about the question: are we at the beginning or toward the end of the
crisis?
15
availability of integrated information and services, based
on the improved availability of internet standards and
infrastructure;
new intermediary systems offering services such as
freight matching, transport auctions, rate quotes, etc.;
Some experts suggest a ratio between production capacity and
consumption levels in the order of 2,5:1.
Eur. Transp. Res. Rev. (2012) 4:1–18
&
&
integrated onboard computer systems and home-base
systems that are interconnected via data links based on
GSM/WAP or mobile internet;
new and innovative fleet management and monitoring
capabilities.
For future logistics needs, Freight IT systems should be
characterized by the so-called four “I”s -Integrated, Intermodal, Internet based, Intelligent—as the ingredients of the
Freight Intelligent Transport System.
When dealing with global logistics scenarios-building,
one relevant question is whether Freight IT systems will be
a real competitive advantage [46] or they will become a sort
of ubiquitous good—a public good in a sense—in future
scenarios. Will we face a world-is-flat scenario, that is, a
total connectivity one [27]? Those who conceive IT developments as neutral drivers justify their view by saying that
IT tools will be easily replicated in the future; therefore they
will no longer constitute a sustainable advantage in the
competition arena.
No doubt Freight IT systems will emphasize the speed of
information management flows, whereby logistics networks
will be increasingly planned and managed on real-time—
faster, flexible and responsive. Our results indicate that we
need to distinguish between basic IT systems and advanced
ones. The former could be actually seen as a sort of public
good; but not so the latter. Indeed, for innovative IT systems,
global players are firmly convinced that they will constitute
a strong competitive advantage. Specifically, major opportunities for competitiveness won’t be found in owning IT
tools as much as in using them appropriately. That is,
competitiveness will depend on the know-how of logistics
information management concerned with flows and stock.
Some of the most relevant IT advantages will lie in developing process innovations rather than product ones.
4.4 Demographic factors
Major demographic trends having impacts on the logistics
network design in the medium term will be:
&
&
the aging of population in the Western world and developed countries, and generally speaking the change in the
demographic structure of population;
the increase of world population.
The first point—see Fig. 5 for the US case [52]—implies
a change in market profiles, e.g. new types of products will
be required and there will be a larger share of services. The
open logistics question is: will this be a new challenge for
producers and logistics operators?
It is quite clear that the EU area will be among those most
affected by this trend, e.g., where major qualitative changes
of market demand will occur.
11
Another qualitative change in demand in the EU area will
be determined by the impact of immigration policies—
whether they are going to be more or less open and friendly.
The degree of openness in such policies will determine
cultural and ethnical changes in market profiles.
From a strictly quantitative point of view, estimates show
that world population will be of some 8 billion people by
2020 (it is currently around 6.5). This means a dramatic
increase of flows worldwide and, at the same time, a strong
pressure on resource utilization, which in turn would produce a strong incentive toward efficiency (and creativity) by
industrial and logistics systems.
In the logistics field, one can also highlight the increasingly
relevant role of the tourism sector relative to the increase of
world population. To the extent to which economic growth
will spread at global level, resources that “cannot be moved”
will be required by a larger number of tourists. This will
determine specific requirements for logistics (procurements,
distribution of consumer goods, etc.) and for production as
well (regional industrial systems). The role of the tourism
sector in regional economies will thus be enhanced.
4.5 Regulation and sustainability
Because of its link to modern social requirements inclined
toward a more environmentally-friendly economy, regulation consists of an important driver. New regulatory trends
will certainly influence some logistics aspects, from product
design to logistics network design, through strategies and
practices such as:
&
&
&
&
&
&
&
green product design;
reverse logistics;
total lifecycle assessment;
selection (also, at spatial level) of main suppliers;
investments and technologies in production and
distribution;
choice of procurement materials;
choice of modes of transport.
Additional issues related to social responsibility determining impacts on strategic logistics scenarios refer to human rights and a better quality of life. The former has to do
with the impact on logistics choices such as suppliers’
selection and sourcing locations. The latter relates to qualitative changes in market demand, whereby fostering specialization of logistics chains.
Since it represents an historical trend of globalization, as
already happened in (now) developed countries, human
rights legislation has been applied in an increasingly greater
number of areas and markets.
Another issue is whether the so-called green logistics is
still perceived as a corporate responsibility rather than as a
market competitive advantage. The prevailing opinion from
12
Eur. Transp. Res. Rev. (2012) 4:1–18
Fig. 5 US demographic trends.
Source: [52]
our focus groups is that it is still mostly a matter of corporate
responsibility.
5 Strategic scenarios of global logistics: some proposals
As previously mentioned, scenario-building (SPA) methodology requires combining drivers—whose meanings and roles
have been specified and discussed previously—to produce and
defining a number of scenarios (states of the world).
In this section we first discuss some preliminary results
and fix some points that come out from the analysis of major
drivers carried out so far through literature, focus groups
and interviews.
Such preliminary results and milestones are then useful to
effectively combine drivers in order to design scenarios. As
we will see, we end up specifying a prevailing macroscenario of global logistics within which two sub-scenario
components could possibly play a role.
Remember that each scenario, generally speaking, is a
coherent picture of a probable state of the world. In addition
to the Shell Corporation’s back-to-history case, some logistics
companies effectively use the SPA. For instance, UPS used
similar techniques to depict scenarios to 2017 [46]. Starting
from the analysis of some 30–40 factors, UPS reduced them to
a couple of relevant dimensions. Four probable scenarios were
finally derived on the basis of manageability and relevance for
the company.
Clearly, in our study we do not adopt a company-based
vision of future logistics, but the remark is important to see
how, at the very end, even if the number of drivers initially
considered are quite high, final scenarios end up to be just a
few.
Preliminary results show us how the cost of strategic resources—most importantly energy ones—will play a determinant
role in the re-designing of global logistics networks, leading
them toward more efficient and shorter ones. Simultaneously,
specialization will be a major requirement for production and
logistics chains, as well as a strong pressure for efficiency.
Furthermore, it will be strongly necessary for companies and
institutions to be aligned to international benchmarks.
The growth of world population will be another determinant
driver. It will imply, on one hand, an increase in consumption
levels, and, on the other hand, an increasing pressure on
resource utilization thereby fostering a trend toward more
efficiency in all sectors of the logistics chains.
The current economic and financial crisis will certainly
determine a decrease of global flows that will last for quite
some time, and more concentration of logistics markets. However, it will not constitute a structural economic change.
Innovation processes will follow a diffused model on global
scale, while the role of IT systems will be very important for
competitiveness as long as it will refer to advanced and innovative systems managing logistics flows and information.
Moreover, as global growth spreads, requirements in
terms of regulation, sustainability, green logistics and human
rights issues will become more and more important.
Overall, the scenario-building process (e.g., combining
drivers) highlights the following prevailing macro forces
determining the future patterns of logistics networks:
&
&
a shortening of logistics networks (by strategic redesign);
a strong pressure toward efficiency, specialization and
sustainability.
Transportation flows dynamics will be linked to GDP and
population growth (and temporarily to the impact of the
Eur. Transp. Res. Rev. (2012) 4:1–18
economic crisis) and they will develop mainly within the
most relevant macro regions. Core macro areas/regional
systems at global level (macro logistics platforms) can be
identified as follows:
&
&
&
&
&
the American system, centered around Brazil, Mexico
and the US, with a relevant role in the future 16;
the Chinese system, mainly made up of production networks in which China will be the most relevant hub
node along with some other satellites’ East Asia
countries (Japan, South Korea, etc.). It will develop
mostly as a major consumption market in the future;
the India system, playing a highly potential role even if
with some uncertainties;
the EU system, again a relevant one above all to the
extent to which immigration flows will be regarded as a
fundamental production and consumption driver [34],
will face important challenges to governing the dynamics
of immigration flows. As it will be able to seize upon such
an opportunity as an economic driver, both an industrial
future and an important role as a consumer market (trends
toward aging of population and consumption stagnation
will thus be counterbalanced) can be envisioned within an
enlarged EU area;
the Russia system—being of relevance, however with a
more steady path of development (e.g., due to decline in
population).
These trends and forces will determine a shift from the
current model of global logistics based on a strong asymmetry
of spatial distribution of logistics platforms - centered around
the role of the Chinese economy as “factory or workshop of
the world” [50] - toward a global-scale model characterized by
a more symmetric spatial distribution of production and logistics platforms functionally linked to final markets as the most
likely scenario (a sort of logistics sprawl) [38, 50, 51]. Moreover, due to the increasing pressure on global resource exploitation, activities will have to be highly efficient and specialized,
before being less energy-consuming.
As a matter of fact, from a spatial viewpoint, the current
model has determined a trend toward a strong asymmetry in
the spatial distribution of logistics nodes and platforms and a
dramatic increase of long-haul flows on the East–west axis.
In the future, on the one hand, China will benefit from a
steady economic growth and will consequently experience a
positive wage and per capita income dynamics, while suffering from constraints due to supply of labor and aging
population [50]. On the other hand, no “China substitute”—
in terms of major manufacturing market—can realistically
be envisioned.
13
Within such a more dispersed macro-model at global
scale, two major components—linked to the above mentioned
forces - will play a role:
&
&
a regional or localized scenario component (LOCAL
scenario);
a globalized scenario component (GLOBAL scenario).
The LOCAL scenario is characterized by the fact that due
to the effects of some drivers—in particular, the energy costs
hindering the development of large-scale networks, the
growth of the Chinese economy and the absence of realistic
alternative to the current Chinese role as “factory of the
world” [50]—production platforms will move close to consumption sources.17 The LOCAL scenario will shape a
trend toward a regionalization of economic and logistics
systems (through a re-location dynamics of nodes), in which
short or medium-range flows will be the most dynamic ones.
Conversely, in the GLOBAL scenario [56] the ultimate
result of the (re)location process of logistics platforms is not
necessarily one in which production sources will move
closer to the consumption ones. In fact, the increase in costs
due to scarcity of resources will impact all types of costs—
procurement, production and distribution ones [21]. The
final result will then be an overall increase in the costs of
final goods and a resulting change in relative prices. The
role of transportation costs will remain more or less the
same proportionally to other kind of costs. In such a case,
the driving and prevailing criteria for logistics networks
design will be a premium effort toward efficiency and
specialization.
Moreover, the role of transport should be correctly conceived in an economic and timely manner rather than in
purely geographic terms. One can easily verify that transport
costs have been very low for a long time (actually, low
transport costs triggered globalization [28]). Thus, an interesting question could be: how much should transport costs
increase—due to the surge of energy prices –before they can
drop back to pre-globalization levels? The margin may be
perceived to be pretty relevant.
Regarding transport costs one should distinguish between
the start-up component—related to fixed costs and generally
predominant—and a variable one, which very often tends to
be less relevant. Seemingly, a more widespread diffusion of
economic growth worldwide can be envisioned in relation to
an increased per capita income. Thus, such a scenario highlights how efficiency in all the sections of the logistics chain
(procurement, production, distribution) will be the key competitive element.
Conclusions—for the GLOBAL scenario—are that we
will certainly see a spatial redistribution of production platforms, however they will not necessarily be located near final
16
Brazil as final market, Mexico as relevant supply hub for North
America.
17
In a word: “one will produce where there is market demand”.
14
markets. In fact, the key variables—in a context in which
transport costs will have a relative impact—will be production
and logistics specialization and efficiency. The prevailing
model will be a more spatially distributed/diffused one, but
it will be based on a rationale of specialization and efficiency.
In a word: “one will produce in the more specialized and
efficient areas and will (potentially) distribute to major global
markets”. Manufacturing and logistics activities will be spatially concentrated in the most efficient and specialized
regions and long-haul transport flows will be potentially fostered. Potential global leaders could then emerge in certain
areas, thus implying a spatial concentration of innovation
processes and of volumes (economies of scale).
In this context we are convinced that the current “factory
of the world” [50]—China—will be able to play a relevant
role [2]. Since it is based on Chinese competitiveness as
related to low cost products on global markets (in which
transport costs basically turn out to be irrelevant), in a way,
the LOCAL scenario would imply a neutralization of China’s
role. Conversely, the GLOBAL scenario highlights a role of
China as a specialized production-logistics platform. China, in
addition to showing internal growth and increasing labor
costs, is also strongly specializing in many sectors. Coupled
with the capability of exploiting huge economies of scale in
production, such a scenario configures a strong competitive
role for China.18
In any case, the driving criteria for optimization of logistics networks design in both types of scenarios will be
somewhat different from the one currently in place. Logistics networks design will be triggered and focused on the
maximization of the contribution margin of logistics on
different markets rather than on a mere minimization of
production costs (labor costs in particular).19
Importantly, it should be noted that in the GLOBAL
scenario the development of potential global leaderships
will be hindered by the customer service levels set by
markets. The potentially global nodes of excellence will
have to cope with the temporal constraints imposed by
markets and customers—that will be more and more demanding and time-sensitive whereby requiring reactive logistics
networks and vicinity to suppliers20 and customers.
Strong positive trends – supported by centralized policies – are
already under way in non low cost sectors. Notably, spatial planning
has a strategic role in such policies and the EDU sector is under strong
development. Also, consider some recent statements of the Chinese
government about the availability of a production capacity to be
sufficient for the whole global consumption…
19
That is, looking at the maximum difference between market revenues and logistics costs in each market area. Some industries – such as
“white” and consumer electronics – have already supported such a
strategy.
20
See, for instance, some trends in the US apparel industry relatively
to the relocation of manufacturing platforms from Asia to Mexico and
the Caribbean, let alone, in Europe, the landmark example of Zara.
18
Eur. Transp. Res. Rev. (2012) 4:1–18
Note also that the efficiency requirement—which is the
major driving force in the GLOBAL scenario - must not be
seen as less important in the LOCAL scenario. Indeed,
various opportunities of growth and development related
to the closer-to-home trends for production and logistics
activities—for instance, in Europe—will have to be dramatically supported by effective policy actions focusing on
efficiency targets. It will be necessary to re-design the productive and logistics systems so as to align them to international standards leading to maximum efficiency. In this
context, a strategic policy tool will be spatial planning, since
many global best practices—the Chinese and the European
ones as well—are the results of incisive and effective
choices in the field of spatial planning related to logistics.
One should raise the question whether or not some guidelines of modern spatial planning can be found in the
decision-making processes of public bodies already today.
Or, conversely, if we are facing obsolete models of spatial
and logistics development. Clearly, the question remains
open. As a matter of fact, economic and strategic analyses
should go hand in hand with land-use ones aiming at (re)
defining a model of production and logistics systems in
which the environmental variable must play a decisive role.
6 Conclusions
6.1 Global Spatial Logistics: some new insights
To summarize the main results, we would say that from the
disappearing of an asymmetric global model of spatial
logistics and manufacturing, a macro-model characterized
by a more symmetric spatial distribution of production and
consumption platforms can be seen as the most likely
macro-scenario - SGLM: Symmetric Global Logistics Model.
Generally, global flows will steadily increase in the future,
as it results from the driver analysis.21
Sub-scenarios can then be built related to the way in which
such a diffused model can develop in relation to the prevailing
forces or macro drivers, in particular by identifying:
&
&
a LOCAL scenario: production will be near consumption;
a GLOBAL scenario: production will not necessarily be
near consumption.
We think that the two scenario components will ultimately determine a prevailing (most likely) scheme of
regionalized systems, along with the possible development
of high degrees of specialization (or, should we say, super-
21
This is the combined result of the role of the economic and financial
crisis (that should be considered relevant but not structural), the development of emerging markets and the growth of global population.
Eur. Transp. Res. Rev. (2012) 4:1–18
specialization) in specific industrial and logistics sectors, in
which global leaderships could emerge (conditional on market
constraints in terms of customer service). The two scenario
components should then be viewed as complementary, since
we would have a prevailing and more likely pattern (LOCAL)
and some probable GLOBAL trends in specific industries.
The macro-model of global spatial logistics—SGLM—
and its two possible logistics dynamics and features (one
more likely to occur than the other) represent a major result
of our study, compared with previous studies. It clearly does
not reflect the common vision of an endless trends of globalization in manufacturing and logistics activities since, for
instance, it supports generally the shortening rather than
lengthening of logistics chains worldwide, and the (macro)
regionalization of manufacturing and logistics activities
rather than globalization. By contrast, [12, 37] underline
the character of Global Production Networks (GPNs) as
being more and more fragmented at global level. Regional
developments, however, are indeed considered as they are
embedded in global networks [9]. Also, it is highlighted
how GPNs rely more and more on global distribution networks [5], while a further extension of globalization is seen
in the development of global logistics providers. It is recognized [37] that the conditions behind globalization that were
supported by the setting of long distance transport chains
will change in the future. However, emphasis is put merely
on the role of energy prices as they will determine a modal
shift toward more efficiency modes of transport.
Looking at the stock-flows’ patterns and logistics network
design in the two scenario components within the SGLM one
can envision the following picture (Figs. 6, 7)22:
&
&
22
major geo-economic areas (to be seen as probable locations of procurement/production/distribution platforms)
and regional systems will be basically the same in both
scenario components;
looking at flow patterns, while in the LOCAL scenario
component (shorter logistics chains) internal flows will
show higher growth rates than inter-change flows (e.g.,
among geo-economic poles), the opposite will be true
with regards to the GLOBAL scenario (interchange
flows’ growth rates will be potentially higher—longer
logistics chains). Remember, however, that we deem the
GLOBAL scenario component less likely to occur, since
it will be potentially restricted to specific industries. As
The two maps clearly do not represent a detailed logistics network
design, since they aim at giving a macro/aggregate representation of
nodes (platforms) and flows at global level. However, note that in our
study we take a logistics approach since we deal with logistics variables (e.g., nodes, flows) and activities (e.g., procurement, production,
distribution). For instance, geo-economic areas show where procurement, production and/or distribution nodes will be located.
15
said, the two maps should be read as complementary
within the overall SGLM.
6.2 European’s logistics competitiveness: some strategic
impacts
Some clear-cut strategic impacts on the European logistics
stems from the above scenario analysis and the development
of the SGLM. What will be the specific impacts of the SGLM
on Europe? What will be the major logistics platforms (procurement, production, distribution) in Europe and the dynamics of transportation flows?
First of all, the shortening of logistics chains and the
related strategic re-location of logistics and production platforms along with the increase of global competitiveness in
specific industries would result in a reinforcement Europe’s
role as production/industrial world region. Two caveats
should be highlighted here: first, Europe already has a
relevant role (in absolute terms) as global market; second,
economic growth in Europe will be lower than in other
emerging economies.
More specifically, the LOCAL scenario component will
depict a strategic trend toward a re-location of production
platforms—as well as logistics ones– in the EU area functionally related to EU distribution logistics and EU final
markets. According to structural trends already under way,
the future most attractive areas for production and logistics
will be those of North Africa and Eastern Europe,23 with
relevant end-customers Western European markets. A number
of global logistics players (in particular, integrators and
shipping companies) are already experiencing24 relevant
re-location processes of logistics platforms toward those
regions.25
Therefore, we could take note of a partial substitution
effect in Asian relationships with intra-MED and Eastern
Europe ones; that is, a new partial rotation of major EU
flows from East (Asia) to West (MED and Eastern Europe).
Moreover, procurement flows distances will be shorter,
e.g., inbound logistics will be based on regional suppliers (in
contrast with the current prevailing model of long-distance
suppliers) and, again, North Africa and Eastern Europe will be
the most interesting areas of concern. It is believed that a
model of turn-key suppliers will be the predominant one,
23
Together with some already stable economies such as Turkey,
which, among other things, has been hit by the global crisis only
partially.
24
For instance, Maersk.
25
Some examples are those of the shoe-makers sector with regards to
the development of hubs in Budapest, Timisoara, Poland and partly in
Bucarest. Still in the shoe-makers and textile-clothing sector relevant
growth is under way in Tunisia and Morocco. Moreover, in the food
sector crucial regions turn out to be those of Egypt, EAU and Saudi
Arabia.
16
Eur. Transp. Res. Rev. (2012) 4:1–18
Fig. 6 The LOCAL Scenario.
Source: this study
RELEVANT FLOWS
SECONDARY FLOWS
RELEVANT REGIONS
SECONDARY AREAS
while the previous model of suppliers of semi-finished products
will progressively come to an end. Such trends will clearly
impact unitized traffic in the EU area.
From a quantitative point of view, the development of
transport flows will be linked to the overall growth rate of
the EU economic market. We can recognize a low scenario
(stability) and a high one (positive trend mainly induced by
immigration flows). According to some estimates of GDP
growth [42], low scenario would consist of a 1.7% of annual
growth, while the high one would imply a 2.4% annual
growth rate.
Fig. 7 The GLOBAL Scenario.
Source: this study
RELEVANT FLOWS
SECONDAY FLOWS
RELEVANT REGIONS
SECONDARY AREAS
Given that, in the LOCAL scenario, European logistics
networks design will rely on Eastern and Mediterranean
production and procurement platforms, while focusing on
Western European final markets, strategic impacts on transport flows will consist, for instance, of:
&
&
a strengthening of multi-modal transport flows toward
Western European final markets (main markets will be
Western ones);
a strengthening of multi-modal (mainly land-based)
transport flows from Eastern Europe (since Eastern procurement and production platforms will develop);
Eur. Transp. Res. Rev. (2012) 4:1–18
&
a strong growth of inbound logistics flows on the North–
south (MED) axis using maritime services (since MED
procurement and production platforms will develop).
The LOCAL scenario will provide for relevant market
opportunities for many logistics chains of the EU market
and suggest the situation of a partial “capturing” of market
shares from Asia, particularly from China.
The GLOBAL scenario, instead, identifies probable European best practices with reference to specific logistics chains. In
this case, Europe would result being specialized in some sectors
and compete worldwide. Unlike the LOCAL scenario, the
range of production and logistics opportunities (in terms of
type of products) is restricted to specific industries, while
potential market areas broaden, not being restricted to the sole
EU market. Therefore, major opportunities in terms of transport
flows development are:
&
&
&
&
a high potential growth of maritime flows to all the most
important geo-economic market areas worldwide
(thanks to the increase in global competitiveness of EU
in certain industries). Nevertheless, it has to be noted
that long-haul East–west relationships will face deep
restructuring processes of supplied services. Overall,
the MED will play a relevant role especially for the
development of intra-MED services and direct calls
(also, with medium size vessels 26 ) while transshipment services will be operated more efficiently
[31];
a strengthening of multi-modal transport flows toward
Western European final markets (Western European
markets will still play a big role);
a strengthening of multi-modal (mainly land-based)
transport flows from Eastern Europe (since Eastern procurement and production platforms will develop);
a strong growth of inbound logistics flows on the North–
south (MED) axis using maritime services (since MED
procurement and production platforms will develop).
Quantitatively, we would argue for a standard increase of
commercial and transport flows linked to global GDP
growth, disaggregated by macro-regions (on average:
+3.8% annual growth in the high scenario, +2.6% annual
growth in the low scenario [41]). Such figures should then
be summed up to the potential export market shares captured by Europe thanks to the specialization strategy. From
this standpoint, by analyzing the most important trade axes
(EU-America, Asia-America, EU-Asia) one clearly realizes
a very strong potential.
As general conclusions of our analysis, we believe that,
taking into account the differences between the two scenario
components mentioned above, Europe will play a relevant
26
See, for instance, the Evergreen case.
17
role in the global logistics scenarios - although less important with respect to major emerging economies—by fostering its development as production-logistics hub of landbased and maritime flows (mostly European or global ones
depending on the scenario component) strategically relying
on production and procurement platforms in the MED area
and in Eastern Europe.
Open Access This article is distributed under the terms of the Creative Commons Attribution License which permits any use, distribution
and reproduction in any medium, provided the original author(s) and
source are credited.
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