SUPPLY CHAIN & LOGISTICS

Cautious Optimism

Breakbulk industry executives ready to tackle infrastructure challenges ahead

Industry executives from every corner of the globe share their expectations and apprehensions in this year’s Breakbulk Outlook. For the most part, the mood is cautiously optimistic. The economic volatility and political upheavals of 2011 are still fresh and, understandably, provide the basis from this concern.

Massive capital projects are planned or under way throughout the developing world. Although galvanized by the enormous potential of Brazil, India, Africa, China and other developing regions, logistics providers are also grappling with the very real challenges created by country after country’s inadequate transportation infrastructure. From Africa to Latin America to Asia, this theme recurs. Tangles of red tape and political constraints also take a toll.

That said, this year’s group of esteemed breakbulk and heavy-lift executives is eager to get its boots on the ground and start work. The world is changing, and the breakbulk industry is a crucial part of that change.

According to Jon Leong, Regional Director, North Asia for BDP Project Logistics, “During the next few years, the challenges for logistics providers in China revolve around size and scale.

“First, there is the size and scale of China itself. This presents a huge challenge, particularly when it comes to heavy-lift projects, because of the issues of distance and the standards of transport infrastructure. But with proper planning and technical knowledge, these problems can be overcome.

“During the next few years, the challenges for logistics providers in China revolve around size and scale. We expect the logistics industry, particularly projects, to continue to see growing demand in China for many years to come.”

Jon Leong, Regional Director, North Asia - BDP Project Logistics

“Second, there is the size and scale of the projects currently being undertaken in China. These projects are among the largest and most exciting projects anywhere on earth. As China brings its economic and social infrastructure up to world standards, many more exciting projects can be expected to come along, requiring specialized and highly skilled logistics support.

“And third, there is the size and scale of the growth of the logistics industry in China. This growth shows no sign of slowing. The rise in demand for goods from China has fueled a complementary growth in the logistics sector. With growth has come some pain – and transportation bottlenecks with many inefficiencies are still to be resolved. Currently, the industry remains very fragmented and includes an enormous number of operators. We can expect to see some rationalization of these operators into larger players with greater geographical reach.

“While there is some evidence that China’s growth may be slowing, its rate of economic expansion will still dwarf most of the developed nations. We expect the logistics industry, particularly projects, to continue to see growing demand in China for many years to come.”

Source: Breakbulk Asia