communities for digitally enabled supply chain visibility

High inflation, elevated energy costs, raised interest rates and a lack of labour are the forecasts for 2023, and the logistics industry will need to navigate a safe path through this forest of perils.

That was the economic outlook in a nutshell, described by Koen de Leus, chief economist at BNP Paribas-Fortis, at yesterday’s Logistics for Europe conference in Brussels.

The event was jointly run by Clecat, the European Shippers’ Council and European Logistics Association.

Speaking via a video link following a cycling accident, Mr de Leus used a picture of an previous mishap to show that this year’s calamity was not as bad as two years ago. The moral of his story, he said, was that things will get better.

Inflation has peaked, believed Mr de Leus, and may settle and hover around the 2%-3% mark, and while US interest rates are rising, the expectation is that they will settle at around 5%, with the European bank rate just below that.

Inventories are now at their highest levels ever, with stocks at 95% full, according to Mr de Leus, who suggested the geopolitical risks to energy supplies, mainly the war in Ukraine, would keep energy prices high through next year. However, he added, the pandemic had shifted the logistics paradigm from just-in-time to just-in-case, and he expects warehouses will be restocked in a development he called “robust redundancy”.

Moreover, Mr de Leus said companies were increasingly looking at “friend-shoring”, establishing alternative supply chains that could continue operating should regular supply lines fail.

Alessandro Pitto, MD of forwarder Casasco & Nardi, highlighted the difficulties his company was facing.

“It is impossible to find people,” he said was the key problem, “attracting people, teaching them the right skills and retaining them”.

He said it was important to align the needs of the company with the expectations of prospective staff, in a “candidate-driven market”. According to Mr Pitto, statistics show four out of 10 candidates offered jobs change their minds, while 24% quit jobs because they are not comfortable with their company.

Project44’s chief industry officer, Bart de Muynck, argued that visibility in the market was key to negotiating logistics challenges and offered a slightly upbeat note with his view that “while the future doesn’t look so bright, that means there’s lots of opportunities – particularly in sustainability”.

Sustainability was an issue picked up by Robert-Frans Niers, group director at plan & deliver for bakery goods shipper Zeelandia. He said Zeelandia wanted to share in the green transition and that this would be better for customers and would attract staff.

Staffing levels are the key challenge for the coming year, but according to Mr Muynck this will be affected by consumer demand, which, as always, can be volatile. But he said that, through greater supply chain visibility, “consumers know companies are sitting on inventory and they’re waiting for another Black Friday”.

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