e-Commerce has Thrown Up New Opportunties for the Logistics Industry

The Logistics & e-Commerce Session of the Future of Logistics conference explored the technologies that are revolutionising the supply chain and changing our ways of working.

The discussion panel comprised a number of thought leaders and cutting-edge players in the region:

• Albert Kraak, COO, DP World Logistics

• Tobias Meier, CEO MENA, SALOODO!

• Peter Somers, CEO, Emirates Post

• Madhav Kurup, Regional CEO (MESA Region), Hellmann Worldwide Logistics

The session began with host and moderator Lars Jensen asking the panellists what is the number one challenge facing e-commerce today and what did the term “e-commerce” mean to them?

Albert Kraak said the biggest challenge facing e-commerce today was getting goods from the manufacturer into the warehouses of e-commerce and fulfilment companies. This was because presently, freight costs were prohibitively expensive and capacity was inadequate so it was very difficult to get cargo space in a timely manner.

Another challenge according to Mr Kraak was enhanced customer expectations who expected to get their packages quickly and at specific times.

Speaking on what he thought was e-commerce Mr Kraak it “was a digital shop” with an enormous behind the scenes logistics machine to provide e-fulfilment services.

“e-Commerce is matching a seller with a buyer online,” said Tobias Meier adding that it can truly change the landscape of business dramatically.

On one hand the pandemic has caused manufacturers to rethink on how and where to set up factories “without putting all their eggs in one basket.” On the other, the pandemic has given a massive boost to e-commerce allowing businesses and individuals to sell across the world.

Mr Meier said that it was the vision of DHL to enable anyone in the world to sell globally. On the challenges facing e-commerce today, Mr Meier felt that last-mile delivery was the industry’s biggest challenge facing today’s global e-commerce market.

According to Mr Meier, the Middle East’s central geographic location between Asia, Europe and Africa gave it a unique opportunity to think ahead, invest further in infrastructure to emerge as a “key player.”

Peter Somers began his reply by stating that e-commerce was now changing to q-commerce or “quick-commerce”. Thanks to the pandemic, many companies have come up to cater to this niche and their business has grown dramatically in the last 18 to 20 months. “Today, people want instant delivery. It’s not about next day delivery anymore its instant delivery and instant gratification,” said Mr Somers.

For Emirates Post it’s potentially a new area of competition that is coming up rapidly. “With Talabats and Deliveroos delivering food in 20 minutes, why not other items?” he asked.

With the lockdowns of the last 18 months e-commerce has received a massive boost, particularly in the Middle East which was lagging behind the rest of the world. This is good for the last-mile logistics business in the region, said Mr Somers.

As for capacity expansion, in terms of people and vehicles, Emirates Post has managed to solve that problem but it’s still not solved globally, according to Mr Somers. With the holiday season coming up in Europe companies have hugely scaled up capacities. However, with the prospect of lock downs resuming again in some countries there what will happen over the coming weeks is “a big question mark”.

Madhav Kurup said that e-commerce is more of a demand led process whereas what logistics companies have traditionally been used to is supply driven processes which have been more predictable and different in terms of planning schedules and the required warehouse equipment for item picking and packing.

Mr Kurup added that another change that e-commerce has brought about is logistics operations have been more B2B oriented but today they has become B2C even which is highly unpredicatable in terms of demand and this was a major challenge.

“Pre-covid going online was some nice to have for many companies and not necessarily a key channel to sell their products,” said Mr Kurup adding that the Middle East share of e-commerce trade was still only 4.2% whereas the global average was 14.6% so the opportunity for growth was “substantial” as the market was “still evolving.”

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