Transcript Transportation & Logistics

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Transportation and
Logistics 2030
New Hubs, New Spokes, New Industry
Leaders? Key Findings for the Road
Freight Industry
Dr Andrew Shaw
Presentation to Road
Freight Association
20 May 2013
Table of Contents
Section
Overview
Page
3
1
Changes in global trade and logistics patterns
2
Emerging economies driving growth
11
3
China as an investment destination
17
4
Outlook
26
PwC
Page 2
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1
Changes in global
trade and logistics
patterns
Page 3
Change in exports by region
1990 distribution of world
merchandise exports by exporting
country/region
Rest of World
10.5%
2009 distribution of world exports
by exporting country/region
Canada and
United States
15.4%
Rest of World
7.7%
Developing Asia
5.5%
Japan 8.5%
Western
Hemisphere
3.8%
Developing Asia
15.9%
Canada and
United States
11.0%
Western
Hemisphere
5.6%
Japan 4.7%
Sub Saharan
Africa 1.1%
Sub Saharan
Africa 1.7%
MENA 4.7%
Europe 50.5%
MENA 5.7%
Europe 47.7%
•
North America’s and Japan’s decline in export market share is significantly greater than that of Europe,
•
Africa’s export share of global exports has increased by more than 50%, albeit from a low base, and
•
Developing Asia’s export share has increased three fold
Source: PwC Economic Views, Future of World Trade – Top 25 sea and air freight routes (March 2011)
PwC
Page 4
Globalisation
Important sales and supply markets evolve in which
emerging and least developed countries play a major role.
New transport corridors will emerge, especially between
Asia and Africa, Asia and South America as well as intraAsian.
PwC
May 2013
Page 5
Top 25 bilateral trade pairs in 2009
(sea and air freight)
Source: PwC Economic Views, Future of World Trade – Top 25 sea and air freight routes (March 2011)
PwC
Page 6
Top 25 bilateral trade pairs in 2030
(sea and air freight)
Source: PwC Economic Views, Future of World Trade – Top 25 sea and air freight routes (March 2011)
PwC
Page 7
China will dominate global
trade in 2030, featuring in
17 of the top 25 bilateral sea
and air freight trade routes.
Source: PwC Economic Views, Future of World Trade – Top 25 sea and air
freight routes (March 2011)
PwC
Page 8
Evolution of 2030’s largest bilateral pairs
Evolution of the five fastest growing bilateral
pairs
300
Bilateral Trade (US$ billions in 2009 prices)
Bilateral Trade (US$ billions in 2009 prices)
700
600
500
400
300
200
250
200
150
100
50
100
0
2010
0
2010
2030
2030
China-United States
China-Japan
China-India
China-Indonesia
China-Korea
China-India
China-Nigeria
China-Saudi Arabia
China-Germany
Japan-United States
China-UAE
Source: PwC Economic Views, Future of World Trade – Top 25 sea and air freight routes (March 2011)
PwC
Page 9
Trade between China and Africa
Headline
Trade
 Bilateral trade between China and Africa has risen from
US$8bn to US$73bn in current prices between 2000 and
2009.
 Trade flow forecast to increase nearly eight times by 2030.
China - Nigeria
Infrastructure
 In 2010 the China State Construction Engineering Corp
agreed a $23bn deal to build 3 refineries in Nigeria.
 Investments and agreements for natural resources have
been struck across Africa, including those for oil in Sudan,
Angola and Algeria, copper and agriculture agreements in
Zambia and mining in South Africa.
 China has also invested heavily in transport infrastructure
(e.g. Kenya). Trade flows from China to Africa mainly
consist of Chinese consumer goods. In the next twenty
years the flows of merchandise exports between China and
Africa is expected to be a key growth area for global trade.
Source: PwC Economic Views, Future of World Trade – Top 25 sea and air freight routes (March 2011)
PwC
Page 10
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2
Emerging economies
driving growth
Page 11
The structure of ‘emerging’ economies differ
substantially
• China: by far the highest GDP, but
relatively low per capita
Brazil
• GDP per capita seems to correlate
with urbanisation rate
China
• Only India has lower GDP per capita
and urbanisation rate than China
• Smaller economies show higher GDP
per capita and urbanisation rate
– Brazil
– Mexico
– Russia
– Turkey
• Urbanisation  facilitates centralised
distribution strategies
US$ 1,482 bn
US$ 7,737
85,4%
US$ 4,758 bn
India
US$ 3,566
46,6%
US$ 1,243 bn
US$ 1,033
29,8%
US$ 866 bn
Mexico
US$ 8,040
77,5%
US$ 1,255 bn
Russia
US$ 8,874
73,1%
South
Africa
US$ 277 bn
US$ 5,635
61,2%
US$ 594 bn
Turkey
US$ 8,427
72,9%
GDP
GDP per capita
Source: PwC T&L 2030, Volume 3: Emerging Markets – New hubs, new spokes, new industry leaders? (Dec 2010)
PwC
Urbanisation
Page 12
Logistics performance of ‘emerging’ economies
•
•
•
Logistics Performance Index (World
Bank) summarises logistics
performance of countries in six areas:
– customs
– infrastructure
– international shipments
– logistics competence
– tracking & tracing
– timeliness
China leads the group of seven
(ranked 27th among 155 countries
covered), mainly due to the high
quality of transport infrastructure
South Africa (ranked
leads in
competence and quality of logistics
services
3,20
Brazil
US$ 150 bn
3,49
China
US$ 506 bn
3,12
India
Mexico
Russia
South
Africa
US$ 125 bn
3,05
US$ 50 bn
2,61
US$ 49 bn
3,46
US$ 46 bn
28th)
Turkey
3,22
US$ 59 bn
Logistics Performance Index
Source: PwC T&L 2030, Volume 3: Emerging Markets – New hubs, new spokes, new industry leaders? (Dec 2010)
PwC
Size of logistics market
Page 13
Territory insights – Seven routes to one goal:
growth.
PwC
Source: PwC T&L 2030, Volume 3: Emerging Markets – New hubs, new spokes, new industry leaders? (Dec 2010)
Page 14
Territory insights – key findings
•
Customs union ‘Mercosur’ – trigger for logistics activities
•
2014 FIFA World Cup, 2016 Olympics – trigger for FDI and upgrading of transport infrastructure
•
Domestic demand for logistics services will grow strongly, relevance of FDI may decrease
•
CEP market promising double-digit growth
•
Opportunities for the private sector envisaged, following continued privatisation of T&L operations
•
Gradual policy reforms should encourage FDI in the T&L industry
•
Multinationals dominate the logistics demand
•
Growth in international trade will depend on the effectiveness of regulatory reforms
•
Special economic zones will stimulate trade flows between Asia, Europe and North America
•
The level of competition of multinational logistics service providers is expected to grow
•
Starting point of a new transport corridor to Asia; investments in transport infrastructure needed
•
Ports, railways, pipelines – public; road transport and logistics – private
•
Continued growth and new opportunities in 3PL and CEP
•
Wave of privatisation – ports first; highways, maritime operations, bridges, railways to follow
Source: PwC T&L 2030, Volume 3: Emerging Markets – New hubs, new spokes, new industry leaders? (Dec 2010)
PwC
Page 15
8 assertions about the future of emerging markets
Regulation
Transport corridors
Consolidation
Competition
The establishment of free
trade zones and resulting
increases in foreign direct
investment will lead to aboveaverage growth of the
transportation and logistics
industry in emerging markets.
Important sales and supply
markets evolve in which
emerging and least developed
countries play a major role.
New transport corridors will
emerge, especially between
Asia and Africa, Asia and
South America as well as
Intra-Asian.
After a period of tremendous
market growth and continuous
market entrance of
multinational LSPs, the T&L
industry in emerging markets
will face fierce competition
followed by consolidation.
LSPs from emerging markets
will not gain significant market
share in developed countries,
even low-tech logistics
solutions are not perceived as
a viable route to win market
share.
It’s all about money ─ the
importance of barter trade
diminishes.
The T&L industry in emerging
markets will increase its level
of professionalism, partly
driven by strong commitment,
technology and know-how
transfer of multinationals in
their markets.
LSP from developed countries
will heavily engage in
emerging markets, however
emerging markets will not
become the new centres of
gravity in logistics as regards
standard setting, innovation
and technology transfer.
The degree and pace of
privatisation of state-owned
T&L organisations will strongly
differ among emerging
markets; while governments in
some cases become
watchdogs, they are still the
game makers in others.
Source: PwC T&L 2030, Volume 3: Emerging Markets – New hubs, new spokes, new industry leaders? (Dec 2010)
PwC
Page 16
The future for Logistics Service Providers
Competition
Logistics Service Providers (LSPs) from developed countries will heavily
engage in emerging markets. Emerging markets will not become the new
centres of gravity in logistics as regards standard setting, innovation and
technology.
• Seven of twenty most important ports are
located in China
• Innovations, standard settings and
headquarters will remain in developed
countries representing the centres of gravity
in logistics
• Some emerging economies demonstrate
low-tech low-cost innovative domestic
logistics solutions
• PwC (2010) Delphi panel: does not see a
shift before 2030
World Port ranking in container traffic in 2008
Source: Institute of Shipping Economics and Logistics
 LSPs from emerging markets should focus on their more attractive domestic markets
and seize opportunities to enhance their service level and logistics capabilities.
PwC
Page 17
Percentage modal share for domestic freight
(2007), as measured by ton kilometre
100%
Air
Water
Rail
Road
50%
0%
China
USA
India
SA
Source: Source: McKinsey and PwC Research, Van Eeden & Havenga (2011), National Department of Transport South African Maritime Study (July 2011)
PwC
Page 18
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3
China as an investment
destination
Page 19
China remains the top investment destination
Russia
19%
US
34%
Turkey
25%
Mexico
26%
Brazil
52%
South
Africa
11%
PwC
Source: PwC Choosing China: Insights from multinationals on the investment environment (2013)
China
56%
India
37%
Indonesia
12%
Page 20
Areas global CEOs want China’s Government to
focus on
73%
Improving government
transparency and
anti-corruption
53%
Reducing intervention in the
economy and allowing an increase
in private competition
PwC
Source: PwC Choosing China: Insights from multinationals on the investment environment (2013)
Page 21
China’s reform measures investors find attractive
48%
Economic
development
driven by
domestic
demand
43%
Financial reform,
steady liberalisation
of foreign exchange
controls and interest
rate policy
41%
Doubling residents’ per
capita income by 2020
PwC
Page 22
China could overtake US as world’s largest market
in PPP terms by 2017
2017
2027
China could overtake
the US in PPP terms
China could overtake
the US in MER terms
PPP: purchasing power parities
MER: market exchange rates
Source: World in 2050 -- The BRICs and beyond: prospects, challenges and opportunities.
Published by PwC, January 2013
PwC
Source: PwC Choosing China: Insights from multinationals on the investment environment (2013)
Page 23
Parts of the value chain carried out in China by
German companies
Source: PwC Logistics in China: An All-inclusive Market? (Jan 2012)
PwC
Page 24
Level of development of logistics services
providers in China
12%
Of PwC survey participants only 12% rated logistics providers’
in China average level of development as “high”
PwC
Source: PwC Logistics in China: An All-inclusive Market? (Jan 2012)
Page 25
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4
Outlook
Page 26
Outlook
•
Growth in China will continue to dominate world trade:
-
China will continue to be an attractive investment location
-
Largest growth in trade lanes will be between China and other emerging
economies
-
The practices of logistics service providers in China will lag those of the
developed world
-
Africa, with Nigeria and SA in the lead, will build closer trade links to China
•
Logistics performance in South Africa is ahead of many emerging economies
•
A period of growth in the logistics industry to support rapid changes in trade
patterns and growth in emerging economies is likely to be followed by a period of
consolidation
PwC