12/15/2022

Six DACHSER theses on supply chains in transition

Not only are digitalization, climate change, and new geopolitical courses creating challenges for policymakers, the economy, and society, they are also redefining the role of logistics. Here are six ways that DACHSER believes current transformations are affecting global supply chains.

Changing times lead to paradigm shift

2022 will stand as a symbol of changing times that will also leave a deep mark on how logistics sees itself. Long-established modes of customer and supplier relationships are beginning to branch off in new directions. Logistics and supply chain management are being re-evaluated.

Such reevaluations of logistics and supply chain management raise the question of what conditions will define these changing times and how logistics providers and their customers can shape this transition.

Changing times lead to paradigm shift

DACHSER has distilled this into six theses for constructively shaping a transformation that will usher logistics into the future.

Click through the image gallery to access the individual theses. A detailed article including a checklist for resilient supply chains can be found in DACHSER magazine 4/2022.

Thesis 1: The establishment of economic blocs is changing global trade. In light of this situation, supply dependencies on individual countries and regions are increasingly being seen as risky. At the same time, Asia is home to economies—China in particular, but also Indonesia, Malaysia, Vietnam, and other countries in the Indo-Pacific region—that are and will remain key production locations and marketplaces for manufacturing companies and thus for logistics. This forces decision-makers to acknowledge one of logistics’ special qualities. Intelligent network management coupled with a high degree of transparency and flexibility along the entire supply chain can make logistics a crucial factor in healthy global competition, which in turn promotes self-determined growth in all regions of the world.

Thesis 2: The division of labor and globalization will endure. It is becoming apparent that current crises are rewriting the rulebook for globalization and the division of labor: for instance, one way to restructure supply chains is to move toward dual sourcing. This means establishing a broader supplier base in multiple countries and, most importantly, regions around the world. Companies are also focusing more on vertical integration—in other words, generating more added value themselves rather than buying it. And many businesses are expanding their warehouse space to a considerable degree. “For a long time, supply chains were pared back to maximize efficiency, with structures kept as simple as possible. Now that they’re becoming more complex again, they’re harder to manage,” Burkhard Eling, CEO of DACHSER, says. “This plays into DACHSER’s core competencies. Together with our customers, we’re engaging in consultancy projects to closely analyze global supply chains with a view to optimizing them. These projects result in tailored solutions based on end-to-end management of logistics processes and advanced digitalization for optimum supply chain visibility.”

Thesis 3: Geopolitical changes call for clear strategies for resilient logistics networks. The overriding goal is always to optimize supply chain resilience by taking a holistic approach. Over the past few years, the risk of disruption to supply chains has grown considerably. This is now forcing companies to consider geopolitical and societal factors and developments to a greater extent than they used to when calculating effort and costs. Just as policymakers must act immediately in a crisis, companies and their logistics partners have to respond as quickly as possible to disruptions. Politicians are currently discussing a “friendshoring” approach in which Western industrialized countries shift a larger share of their supply chains to politically friendly economies in order to secure access to important raw materials and other products. However, this approach is not feasible in the short term and, moreover, not very practical. Instead, DACHSER advocates comprehensive global logistics concepts that have been established in close collaboration with customers.

Thesis 4: Supply chain resilience has both strategic and operational dimensions. What really counts when designing resilient supply chains is the interplay with other strategic factors that also take into account geopolitical transformations and societal changes. Reliable logistics solutions are increasingly becoming a value. In the future, choosing the right producing countries and supplier locations will play a major role in the resilience of supply chains. DACHSER is in a position to create global transport solutions that offer customers the relevant network benefits and the expertise required to avoid as many bottlenecks as possible.

Thesis 5: Energy, logistics space, and personnel are becoming crucial location factors. How companies go about selecting locations around the world—and thereby also shaping supply chains—is being influenced more and more by resource scarcity. Moreover, sharp increases in fuel and energy prices are now causing problems for many companies. The high cost of diesel, AdBlue, power, and gas is putting a strain on the entire logistics sector. Since these price jumps are particularly hard on transport companies, DACHSER is doing what it can to help them by paying invoices promptly. Another aspect of ever greater importance to DACHSER’s customers is climate action. Looking beyond all the short-term disruptions, climate change will have a major impact on global trade in the decades to come. Many companies are already considering sustainability when selecting their subcontractors and suppliers and making purchasing decisions. They are also under increasing pressure to report their carbon footprint. These days, the struggle over limited human resources in industrialized countries is playing out across all sectors. In times of demographic change, this struggle will not be won through recruitment alone. This is why DACHSER invests in training, in attractive compensation and working models, in providing employees with state-of-the-art technology, and in professional development opportunities.

Thesis 6: Values are a strategic concern in an uncertain world. This principle of living values is increasingly helping companies choose where in the world to have locations, and it is ultimately reflected in their responsibility toward employees. Value-oriented, sustainable action and assuming responsibility for future generations is already an integral part of DACHSER's corporate policy today. “At DACHSER, the values framework plays a key role: we’re active in all major economic areas, but as a medium-sized family-owned company, we don’t have to be everywhere. Anytime we’re considering entering a new market, we check very closely to see whether doing so would be in line with our core corporate values and stringent compliance rules,” Burkhard Eling says. “Human rights, healthy and fair working conditions, and clear compliance rules are non-negotiable.”

DACHSER worldwide

Contact Christian Auchter Corporate Public Relations

+49 831 5916-1426 christian.auchter@dachser.com

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