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16 April 2012 | Adam Leach
Logistics providers must become more agile to help buyers address the challenges and rapidly shifting dynamics of global trade, according to an industry expert.
In an interview with SM, Michael Holt, CEO of FedEx UK and vice president, supply chain EMEA & operations NEU, FedEx, said the main challenge facing buyers as a result of globalisation is getting their heads around it.
“People are working on the global stage now rather than working on a regional or country specific basis,” he said. “I think that the challenge for procurement individuals is understanding the shift in those dynamics and understanding how that evolution of globalisation is affecting their businesses.”
He explained that the continuing growth of China and other BRIC (Brazil, Russia, India, China) countries – as well as emerging nations such as Vietnam and Malaysia – are the key factors in the changes. “China will account for more than twice America’s exports by 2030, so for procurement, the traditional markets are being challenged by the emergence of the BRIC nations and areas such as Vietnam,” he said.
He added the scale and pace of the changes mean the services that logistics and supply chain companies need to provide are also changing: “We need to be more agile and more adaptable in the provision of supply chain services to buyers. As the markets change and procurement and purchasing policies change, we have got to be there with the flexibility to be able to get them access to the new and emerging markets.”
Holt highlighted the importance of nations collaborating to produce deals such as the Trans-Pacific Trade Agreement - a policy currently being developed by a number of countries including the US, Singapore, Vietnam and Malaysia to establish regional deals, including reciprocal access to public procurement contracts. He said agreements like this would help trade to develop effectively and fairly, avoiding the sort of protectionist policies the economic crisis might prompt.
The most important factor, he emphasised, is the “adaptability and agility” of buyers and businesses in the increasingly globalised environment.