News / Shift to integrated logistics necessary, but it 'will stifle competition'

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Integrated logistics hinders competition and needs to be managed properly, according to the COO of start-up Zeus Labs, Alistair Lindsay.

He claims regulatory intervention is necessary for a more democratic logistics sector to emerge.

Speaking on a platform with Maersk’s UK and Ireland representative, Samantha Brocklehurst, and Nick Winder, of WIN Logistics Group, at this year’s Multimodal show in Birmingham, the debate turned to market control through the integration of logistics services.

Mr Lindsay told The Loadstar: “Any logistics service that manages the end-to-end system will become too large, and that creates a barrier to entry [to the business] and hinders competition, and that leads to price increases – the last thing we need in this business.”

Ms Brocklehurst responded to a question regarding the practice of tying the acceptance of freight onto a ship with a subsidiary service, such as warehousing, trucking or customs clearance, an issue for container line customers in Australia, the US and Europe and considered illegal in many jurisdictions.

She said: “That is not a practice I recognise from Maersk. Our customers are a broad church and each requires a different strategy, individual solutions offered are being broadened.”

But a failure to address the practice of tying sea freight services to a requirement to buy a subsidiary service, led Mr Lindsay to say: “Integrated logistics, the idea that one company can supply an entire end-to-end service, will stifle competition, and we need to be wary of it.”

The panellists agreed a shift to integrated logistics was necessary and that it required combining physical assets with technology to over-ride manual processes and ease the difficulties the logistics industry has encountered during recent ‘black swan’ events.

Ms Brocklehurst described Maersk’s as a three-pronged approach, which allied physical assets and electronic technology and data with a “helicopter view of assets and connectivity to give greater [supply chain] visibility”.

Mr Winder said integrated logistics needed to deliver value and visibility through digital means, but added he was “yet to be convinced that there’s a player that delivers everything for the right price”.

Mr Lindsay claimed there was a need for greater regulatory intervention to prevent the control of logistics provision from being monopolised. He said: “We need to democratise the integrated logistics service provision so that the best providers can offer the best services at the best price and, ultimately, we will see the development of a free market.

“But that needs government intervention to prevent the larger businesses from taking over.”