Macroeconomics

Labor environment Regulatory framework E-commerce logistics New business models Collaboration

Monitoring trends in macroeconomics

E-commerce and complex market conditions

E-commerce logistics was ranked as the most timely trend in this edition of the 4flow trend monitor, highlighting the importance of digital sales channels even beyond the initial boom caused by the Covid-19 pandemic. Additionally, the trend regulatory framework became more impactful since our previous trend assessment. The growing importance of these trends reflects the complexity facing global supply chains in a world of quickly changing political and economic conditions.

Labor environment – in focus

Affected industries:

All industries that rely on labor-intensive tasks in production, warehousing and transportation

Affected supply chain segments:

Road and rail transportation, warehousing, value-added services

Torn between reality and recognition

Labor shortages, such as the truck driver shortage, have been a topic for years, especially in Europe. Still, the situation has intensified – vacant positions in the supply chain industry have been high, while labor strikes are common among essential workers. Will the industry find its path between cost effectiveness and attracting workers?

Related developments

Labor strikes and shortages

Wage dumping and lack of appreciation for truck drivers in past years have led to tension, resulting in labor strikes. A shortage of 100,000 truck drivers is reported in Germany alone.

Immigration to fill labor gaps

Germany passed a new migration law to attract skilled workers from abroad.

Growth despite shortages

While the EU economy is growing, 75% of EU businesses report they struggle finding skilled personnel. In contrast, although the unemployment rate in Germany rises, the number of open positions declines.

Facets of this trend

Driver shortage and IT personnel shortage
Appreciation of essential workers next to labor strikes
Aging of population in western countries persists in the long run

Getting ahead of the trend

The expected developments of the labor environment urge businesses to readdress their working environments.
While New Work initiatives and higher appreciation of workers could attract new workforce, automation and AI can also play a role in reducing the demand for essential workers.

Regulatory framework – in focus

Affected industries:

Especially relevant for businesses with global supply chains and international markets

Affected supply chain segments:

All supply chain segments

Nudging towards improvement or stifling innovation?

The supply chain industry is greatly affected by regulatory conditions – more so than many others, as supply chain activities often span multiple regions with different laws. Organizations like IATA (International Air Transport Association) govern international transportation with additional regulations. This attention from regulatory authorities can impact operations.

Related developments

Expanding sustainability legislation

Legislation like the CO₂ component of the German truck toll aims to encourage businesses to implement environmentally friendly transportation. In 2024, the scope of the German Supply Chain Act will be extended to all companies in Germany while the European CS3D (Corporate Sustainability Due Diligence Directive) will come into effect.

Electric vehicles in a global market

The European Commission announced an investigation whether an anti-subsidy against low Chinese EV prices is required.

Complex global relations

Tariffs and trade barriers have been increased in recent years. This development might accelerate, or advocates of free trade might gain the upper hand. Either way, supply chains are affected, especially with regard to the ongoing decoupling between the USA and China. Are so-called de-risking and friend-shoring valid strategies or just buzzwords?

Facets of this trend

German Mobility Package, German Supply Chain Act
Political decoupling and de-risking

Getting ahead of the trend

Businesses need to closely monitor the changing regulatory framework and evaluate how to adapt their organization to these changes.
Understanding the implications of new laws becomes vital as fines for non-compliance can be high.
Strategic decisions must be adaptable to multiple possible scenarios.

E-commerce logistics – in focus

Affected industries:

B2C industries like retail, pharmaceuticals, grocery and apparel

Affected supply chain segments:

Road, sea and air transportation, especially less-than truckload (LTL) transportation and courier, express and parcel (CEP); warehousing

Meeting the requirements of new delivery concepts

E-commerce is not a new trend per se, but changes in consumer behavior and rising market volumes pose a challenge to existing logistics infrastructure. Influencer marketing and channels like TikTok make product marketing more important than ever. The Covid-19 pandemic accelerated the transition from brick and mortar towards digital sales channels. Logistics service providers need to keep up with these changing demands – dynamic delivery across international borders, fulfilment, and return options require collaboration and technological integration among all stakeholders in the supply chain.

Related developments

Strong annual growth

The e-commerce market is expected to keep growing with an annual revenue growth rate of ~11%.

City logistics

Last-mile delivery continues to be a challenge for many businesses. Various research initiatives aim to explore innovative solutions for city logistics.

Facets of this trend

Quick commerce
Live stream logistics
Last-mile delivery concepts

Getting ahead of the trend

As marketing and quick order fulfilment become key factors for success, e-commerce businesses need to reevaluate their marketing plans and logistics services.
Retailers need to define their strategy and decide whether to engage in competition with quick commerce or stick to brick and mortar and accept possible losses of sales. Supply chain must follow suit.

New business models – in focus

Affected industries:

Retail and industries requiring high service levels

Affected supply chain segments:

All supply chain segments, especially carrier markets and warehousing

New value propositions stir up the markets

Traditional business models are transforming. Carriers are building up the expertise to expand into formally distinctive market segments, while at the same time the sharing economy and customized services are causing a shift in the producer-consumer relationship. In retail, new business models like dark stores and self-service stores are on the rise. AI enables new business models that yield competitive advantages.

Related developments

Service diversification

Prominent logistics players are utilizing their own assets to offer more diverse services, which could make more specialized players obsolete.

Collaboration leads to innovation

Logistics players are collaborating with tech companies to create applications like the AI-driven Inventory Optimizer from Shell, Equinor and Microsoft.

New digital solutions

Digitization is boosting new logistics and mobility concepts for cities – dark stores, same-day delivery and carsharing models are on the rise. And supermarkets Tegut, Rewe and Nahkauf are testing pilots for stores with self-checkout only.

Facets of this trend

Convergence of carrier business models
Dark stores and self-service stores
Digital (AI) tools and value-added services

Getting ahead of the trend

Technological developments like AI make new business models available. To avoid being left behind by market disruptors, companies need to question their business models.
Will traditional ways of operating still be able to compete with those of new challengers? Can your business benefit from service diversification?

Collaboration – in focus

Affected industries:

All industries

Affected supply chain segments:

Especially road and rail transportation

Unlocking new optimization potential by sharing data

The supply chain industry consists of many market players that traditionally optimize their operations independently from each other. As a result, there is still significant room to optimize operations for costs and sustainability. Collaboration initiatives like logistics platforms or data sharing standards aim to narrow this gap to reap the benefits of a common data base and real time updates.

Related developments

Rise of logistics platforms

Logistics platforms continue to grow in significance. While Bosch introduced a platform for last-mile delivery optimization, other startup platforms aim to connect carriers to reduce the share of empty-load trips.

Collaborative networks

With Catena-X, numerous players in the automotive industry joined a collaborative network that facilitates data sharing between participants.

Physical internet

Research initiatives are evaluating the potential of a “physical internet”, in which all logistics services are intelligently connected to leverage unused optimization potential and increase sustainability.

Facets of this trend

Digital platforms for freight forwarding and further logistics services
Data sharing initiatives
Vision of physical internet for transportation networks

Getting ahead of the trend

Businesses should consider collaboration to leverage optimization potential and increase profits. In many cases, collaboration needs standardized data.
Even if collaboration is not yet part of your strategy, adapting processes and data to market standards now will save time and effort in future projects.