keynote feature
learnwhat global competition in the thirdmillennium reallymeans!” According toGérard Balivet, president of SYCAFF
‘In 2050, people will not be able to believe that
we used aircraft travelling close
to sonic speed to transport goods’ – Krauter
(Syndicat des Compagnies Aériennes Fret en France) – the voice of air freight carriers at Paris Charles deGaulle airport – one long-termeffect of the economic downturn in 2009 was the localisation of production facilities closer tomarket, although he believes that productswill still be in demand around theworld, ensuring the future of air freight. Niko Herrmann, a partner in internationalmanagement
Cai pointed out that Latin America, for instance, has a lot of the necessary resource and energy needed to attract production centres – but the continent is short of manufacturing facilities, an area inwhich Asia is very much stronger. UlrichOgiermann, president and CEOof Luxembourg-
based all-cargo airline Cargolux and the current chairman of The International Air Cargo Association (TIACA), commented: “More cost-conscious companies have looked at nearsourcing: buyingmaterials and products closer to their final production points in Europe and North America and eliminating the logistics costs of imports fromAsia. “However, recent studies prove the reduction in logistics
costs is outweighed by the increased cost of local production,where infrastructure and employment investment is greater. I do not expect this to have the negative impact on air cargo others have predicted,” he added.
ENVIRONMENTAL CONCERN But, stated Stefan Krauter, chairman of Vienna- headquartered freight forwarder and logistics provider cargo-partner: “In 2050, peoplewill not be able to believe thatwe used aircraft travelling close to sonic speed to transport goods –what awaste! Environmental necessities will lead to slowermethods of global transportation and the increased amount of time takenwill bolster the case for nearsourcing – in the case ofWestern Europe to production centres in Central and Eastern Europe.” He believes that the recent enlargement of the EU
communitywas a“positive approach” towards attracting nearsourcing attention fromWestern European countries towards Central and Eastern Europe. Krauter calls the region“Europe’s own little China at close hand”– but he said hewould still like to invite European trade unions and politicians to visit the production centres in Asia“to
1 AIR LOGISTICSCHINA 4
consultancyOliverWyman, points out that “sometimes too little attention has been paid to the total cost of goods, as purchasingmanagers focused heavily on getting the lowest ‘part price’ formanufactured items”. He said: “We nowsee companies realisemore often that several commodities ormore specific product/modules are being sourced fromthe‘wrong’supply location,when looking at total cost.” Herrmann explained: “As the product cost of higher-value,
air freight-prone products like semiconductors goes down, transportation cost becomes amore relevant factor, besides the increasing importance of environmental topics.” He believes thatmore andmore suppliers inWestern
Europe have learned to compete against the low-cost country sourcingmarkets. These companies have further developed their strengths and they have reduced the cost differencewhen viewed on a total cost basis. For the future, Herrmann sees an“increased reassessment of global supply chainswith a focus on nearsourcing, taking a bite out of airline and shipping line revenues”. In a recent interviewwith our sister publication Air Cargo
Week, Thomas Lieb, chairman of the board responsible for air freight at global logistics giant DB Schenker, asserted that air freight transportation costswould have to increase many times over to outweigh the financial advantages of local production costs in areas like China. “It is the labour cost that forms themajor part of anymanufacturing enterprise”, he stated – and here, even though GDP growthwithin Chinawill surelymean thatwage costs will keep increasing, itwill be a long time before the country loses the edge it has currently over European wage levels. There are some peoplewhowould like to
“It is the labour cost that forms themajor part of anymanufacturing enterprise” – Lieb
see the end of global outsourcing because of the
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