No matter how well technology and communications are interwoven with daily business, the circle cannot be completed without robust logistics. That is even truer for the food industry where logistics is the backbone for survival.
With increasing e-commerce influences, every industry segment is geared up to meet increasing logistic demands. A new report by Sandler Research shows not only increasing interdependency between food and e-commerce, but also the importance of the global logistics market.
As U.S. companies are aggressively eyeing new markets, they are also facing a more complex supply chain with increasing barriers to business. These include, but are not limited to:
- regulatory and nontariff barriers
- political upheaval and economic instability
- variations in consumer demands
- disruptions due to natural disaster
- rising oil prices and their effect on food production and transportation
Companies are realizing that in order to reach millions of potential consumers in emerging markets, they need to ensure rock-solid logistics.
The predominant trend points to the rising demand for intermodal rail, which is shaping up to the best logistic tool for all. Low fuel costs and relatively fewer regulations than air freight or shipping is quickly making rail transportation a favorite logistic tool for the food industry — especially for companies that conduct intercontinental business.
Analysts have predicted the global food logistics market to grow at a CAGR of 8.87 percent in the next four years. The industries are interdependent here, so growth is a given. E-commerce will depend on logistics and vice versa, driving the market. Without efficient and effective logistics, the food industry cannot hope to survive the challenges it faces.
With new economies coming in to make the global markets a veritable minefield, American industries need more robust warehousing infrastructure to support their manufacturing and retail facilities. The economy has been on shaky ground, which in turn has heightened the problems plaguing all segments here.
Cost and delay has been hindering expansion across varying terrains, especially for large and bulky goods. Businesses realize that if they want goods and services to be available to customers on time and within reasonable prices, then they have to explore other avenues, like rail transportation.
Key players who are slated to make a big impact in the industry are AmeriCold Logistics, DB Schenker Rail Deutschland AG, C.H. Robinson Worldwide Inc., and Schneider National Inc. Along with other players, these companies are all set to help food and related industries increase their market presence and reach out to more consumers easily.
Changes in consumer behavior and the online retail boom are a reality that needs to be dealt with. Exploring better and cheaper logistics tools
is one of the smartest moves these savvy businesses could have made. They can now boast of increased capacity without incurring higher costs or taxes, and therefore offer superior service to their customers. They can also offer more customized options, which will help them stand out among the increasing competition.
The Sandler Research report links the various segments like products and geography with various transportation modes to provide a clear prediction for the logistics market and its growth prospects in the coming years. It shows that increasing dependency on logistics will come in handy for complete management of resources. These will be responsible for continuous and cost-effective supply of durable and nondurable goods from one place to another.
From procurement of raw materials to storage, from providing a viable link between the manufacturing facilities and distribution of finished products to retail outlets, the global food logistics market is going to be the key conduit for overall success of the food and beverage industries.