1. Logistics: what is it? ETF Seminar: ‘How to recruit and organise in the logistics sector?’ Runö, Sweden 8-11 February 2009 Paula Hamilton, ITF hamilton_paula@itf.org.uk

2. What is Logistics? The work of logistics Logistics in Central and Eastern Europe Main Actors in Logistics (in the region) Gearing up to strengthen our unions

3. Logistics ‘The work required to move and position inventory throughout the supply chain which serves to link and synchronise the overall supply chain as a continuous process and is essential for supply chain connectivity.’ (Bowersox et al, 2007)

4. Logistics Logistics is a subset of and occurs within the broader framework of supply chains. Logistics activities occur within and between all companies active within supply chains. The rise of logistics is driving restructuring across the whole transport sector The ‘new’ logistics industry plays a vital role in the global economy.

5. Physical Flows, Nodes and Networks

6. Global Gateways: Container and Air Cargo CONTAINER PORTAIR CARGO TERMINAL

7. Information and Communication Flows Enable faster and more consistent communication within organisations and between corporate actors in supply chains Enhances effective communication between logistics information systems and their physical operating environments

8. ICT and Logistics Customers demanding real time information Used to reduce inventory, labour requirements and risk Improve timing/speed Increase reliability Increase transparency in supply chains

9. ICT Systems Supply Chain Information Systems (SCIS) are responsible for linking all logistics activities into an integrated process These have four major components: Enterprise Resource Planning systems Communication systems Execution systems Planning systems

10. Information and Communication Technologies Types of ICT used Bar coding and scanning Global data synchronisation The Internet Satellite technology Image processing Extensible markup language

11. The work of logistics Order Processing Inventory Transport Warehousing, Materials Handling and Packaging Facility Network Design

12. Order Processing Order preparation Order transmittal Order entry Order filling Order status reporting Key customer interface

13. Inventory Raw materials Work in process Finished goods Supplies

14. Warehousing, Materials Handling and Packaging Many types of warehousing Traditional role has been to hold or store inventory but Today many value added activities occur in such environments, operations focus on customisation, velocity and movement Packaging serves to protect products during the logistics process Materials handling involves receiving, moving, storing, sorting and assembling.

15. Facility Network Design A facility network is the number, size and geographical relationship of facilities used to perform logistical operations. Include manufacturing plants, warehouses, cross- docks, ports and retail outlets. Facility network design determines the number and location of all types of facilities used to perform logistics work Facility networks are in a constant state of flux

16. Transport These are the operations which geographically move and position inventory Include road, rail, water, air and pipeline Is the largest element of logistics costs Reduces inventory, storage and materials handling Transport’s role is becoming increasingly important in supply chains

17. Logistics Industry: Markets Air Cargo Airports Contract Logistics Finished Vehicle Logistics Freight Forwarding Ports Express and Parcels Intermodal NVOCC Rail Road Haulage and Trucking Service Parts Logistics Temperature controlled logistics Warehousing and property development Information and Management Services Shipping

18. Barriers Between Modes Disappearing Deutsche Post World Net Privatizing German Postal Service DHL Danzas Airborne Express Exel: #1 US Warehouse Co. NOL/APL Singapore Based Steamship Line Terminal Operator #3 US Whouse Co., Rail = Liner Trains

19. Logistics in Central and Eastern Europe Fundamental changes in the logistics market in recent years Production – ‘near sourcing’ in CEE Growing consumer markets Large LSPs – new models to serve clients Few indigenous international companies operating on a global scale Pattern in most CEE countries = strong local logistics presence serving the needs of small business + large TNC providers providing services for the international ‘incomers’ Possible restructuring with some CEE based companies grouping themselves together to provide services across the region

20. CEE: Contract Logistics Market Size and Growth 2007 grew to €991m, a growth rate of 24% Highest growth rate in the Slovak Republic (39%) Baltic States also experiencing strong growth, helped by proximity to Russian market 2011 market forecast = €1956m (18.56%)

22. CEE: Express and Parcels Still major differences between CEE and WE markets but likely to change as shippers demand specialist levels of service and pricing Growth is not homogeneous across the region, Baltic States and Slovenia show above average growth Automotive is particularly important to the express sector in Poland, Czech Republic, Slovakia and Hungary All major global express providers are well positioned in Poland and Czech Republic

23. CEE: Freight Forwarding 2007 grew to €2112m, a growth rate of 21.3% 2007 - Air forwarding grew to €637m, a growth rate of 17% 2007 – Sea forwarding grew to €1475m, a growth rate of 23.3% 2011 – freight forwarding market forecast is €3731m, a growth rate of 15.3%

24. CEE: Road Source: Eurostat By Type 2006 (m t km)

25. Logistics Actors in the Region Include: Manufacturers Retailers Local, regional and national Governments The European Commission AND Logistics Service Providers

26. Ocean carriersInland transport Manufacturers 3PL POWER “Wal-Mart is hard to do business with. I had a cardiac episode while I was working for them.” - Former Exel manager of Wal-Mart DC

27. Logistics Industry: Main Actors in the Region Deutsche Bahn CEVA DPWN DPD DSV Ewals Cargo Care FedEx Fiege Logistics FM Logistics GAC GEFCO GLS Geodis (SNCF) Kuehne and Nagel M&M AP Moller Maersk Group NYK Logistics Panalpina TNT UPS UTi Worldwide Wincanton

28. Logistics Industry: Main Actors present in all your home countries Deutsche Bahn DPWN DSV GAC Kuehne and Nagel M&M Others (variable range of operations)

29. M&M: Militzer & Münch International Holding AG Owned by TransInvest Holding AG Headquartered in Switzerland Operations divided into 6 regional groups A major partner in the System Alliance organisation, a FedEx partner Products and Services include rail cargo, air cargo, sea cargo, groupage, customs service, warehousing and logistics

30. Source: Transinvest M&M Organisation

31. M&M: Strategies for Growth Build its network in Eastern Europe Focus on developing its IT-aided processes Become more active in new and developing markets with a focus on Central Asia and China

32. GAC Head office in Dubai Privately owned Operates in over 40 countries, with 250 offices and over 7000 staff Business areas include shipping, logistics, marine and solutions Target markets include oil and gas, retail, automotive to dry bulk and cruise liners

33. GAC: Strategies for Growth Aims to provide an integrated solution to its clients’ logistical needs Expansionist strategy, particularly in emerging markets Tends to enter new markets via partnerships first, then set up subsidiary Four hub agency centres: London, Dubai, Singapore and Houston

34. Logistics revolution Consolidator / freight forwarder, 3PL Road transport Manufacturer Air freight Ocean shipping Port trucking Warehouse: deconsolidator, 3PL, wholesaler, DC Warehouse: deconsolidator, 3PL, wholesaler, DC Rail Road transport Retailer Small parcel delivery Home

35. How to get started … Sector Companies Geography/ Market Union Strength