“I’ll be there for you” is one of the great hits of the U.S. pop-rock duo, The Rembrandts, first broadcast in 1994. Almost thirty years later, Schenker management might not dance to the tune - at least not publicly - but their principals are similar. This is increasingly becoming apparent since the logistics heavyweight is being asked for advice by a growing number of its customers intending to diversify their supply chain so as not to rely on just one geographical region. And the demand for professional market information is rapidly increasing. At the same time, the company announced the forthcoming launch of a smart label within its air cargo product, “Air Track”. This is a smart tracking tool which can easily be affixed to shipments, rather like a stamp.
The logistics giant is active in many fields, be it air freight, ocean freight, road transportation or warehousing. Now, another task scope is increasingly catching the attention of the company: the role of an advisor for companies intending to relocate their production – or at least part of their industrial activities – from China and other key manufacturing sites to several countries in different parts of the world. “We see a clear de-coupling or even near-shoring trend among a growing number of our customers who have been focused on one geography or region in the past. An increasing number of them has decided that, for them, putting all their eggs in a single basket could involve some risks,” argues Asok Kumar, EVP of Global Air Freight DB Schenker.
The COVID-19 pandemic was an eyeopener. It showed many companies what it means to be dependent on a single production site, which, in addition to economic hiccups, also harbors high political risks. Consequently, a growing number of European, North American, or Japanese and Korean companies have started to diversify their investments, looking at other shores in Southeast Asia, Latin America or Turkey. “The strategy of risk mitigation is underway and seems to be accelerating,” says the executive. Schenker's role in this: “We assist our customers with the ongoing redesign of supply chains because many of them are definitely looking at industrial options in order to diversify their supply chains.”
Mounting supply chain hiccups
Covid was a driver of this trend, Russia's war against Ukraine, a disruptor of established supply chains, he states. Since the invasion of Ukraine, Russian airspace has been closed to overflights by Western or Japanese airlines. This requires significant detours that cost time and additional fuel.
Another disruptor was the week-long closure of the Suez Canal by the Taiwanese container vessel, Evergiven, which severely distorted the intercontinental supply chains between the Far East and Europe. This was yet another reason motivating companies to consider a strategy of near-shoring their production as a viable option instead of following the doing-business-as-usual pattern.
Pathfinder – a new task
Since Schenker runs offices in practically all markets, the logistics company's local managers can actively advise and support their customers who are considering opening up additional sourcing channels in alternative geographies, says Mr. Kumar. “We are a neutral agent and do not advise any industrial player to withdraw from a particular country. But if they have decided to do so, we support them with their logistics requirements at alternative places where they may set up production sites or market their goods.”
Nevertheless, China remains of enormous importance and continues to be a growth market. “Just recently, we opened a new logistics center in Pinghu.”
At the same time, he points to the smart label as part of the existing Air Track product that should soon be approved for use by the relevant authorities: It is an industry-first, ultra-thin tracking device that can be affixed to a pallet, container, or individual carton, enabling shipment tracking for air, ocean, or land transport.
Labels replace traditional tags
Developed in close cooperation with Israeli company, Sensos, Air Track enables customers to monitor a shipment’s location and condition (e.g. temperature). Further to this, it constantly informs about the estimated time of arrival based on real-time data, and increases security by sending an alert in case a consignment is opened unauthorized.
The tracking device is part of DB Schenker’s predictive analytics technology. This captures the data of labels attached to consignments, thus enabling 24/7 visibility of a transport. Following a pilot phase, preparations are underway to clear all necessary regulations for the solution’s practical deployment. “Through a multitude of data gained from smart devices, we lift shipment visibility to the next level and increase the efficiency of air freight,” concludes Asok Kumar.
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