Editorial: The Growing World of Global Logistics Superpowers
his week’s story about the German national railway agreeing to pay $1.1 billion to buy BAX Global reinforces our story in the Transport Topics Logistics 50 earlier this month headlined, “Mergers Are Creating Global Logistics Superpowers.”
And last week’s events underscore how the movement of goods around the world is evolving into a single supply chain, wherein national borders are merely bureaucratic inconveniences.
Deutsche Bahn AG, a company virtually unrecognized in the United States beyond those supply-chain experts who knew that the railway already owned Schenker Logistics, will surely make the Top 10 in next year’s TT Logistics 50 ranking, with North American net revenue of just under $1 billion a year.
When that deal closes, Deutsche Post would leapfrog over UPS Supply Chain Solutions into the No. 1 slot on TT’s logistics list.
Exel was No. 1 in the 2004 rankings, and probably would have remained at the top, except that No. 2 UPS acquired part of No. 10 Menlo Worldwide late last year.
Perhaps the most instructive lesson coming out of the BAX Global acquisition was the comment from Hartmut Mehdorn, chief executive officer of Deutsche Bahn. He said, “If we hadn’t purchased BAX, then one of our competitors would have done so, to our disadvantage.”
In other words, in the global logistics business, it has become eat or be eaten.
As the world’s production continues to shift from cheap labor market to cheaper labor market, and from efficient producers to even more efficient producers, the supply chain has to follow them.
While it was no surprise, perhaps, to see UPS and FedEx rush off to emerging markets, now some of the stronger, larger motor carriers that have invested heavily in logistics and related services are moving offshore, following their clients.
Yellow Roadway and Schneider are two of the most obvious examples, but many other fleet executives are believed to be looking at investments in China and other markets.
This globalization of the freight business presents both opportunities and challenges. In tomorrow’s world, just operating a good fleet efficiently may not, in itself, be enough to ensure success.
This editorial appears in the Nov. 21 print edition of Transport Topics. Subscribe today.
