In the modern age of fast-paced online shopping and advanced connectivity, what should logistics offer its customers and where is the industry headed? We spoke with Jens Sode, APL Logistics’ new Regional Vice President for EMEA & MD Germany, as he shared his thoughts on how APLL are adapting for the future, and what logistics companies should expect in the years to come.
After 24 years with a rival company, Jens Sode accepted a Vice President position with competitor APL Logistics (APLL). Shifting his attention to the new horizons of the EMEA after an already widely traveled career, including India, Hong Kong, Denmark, USA, Belgium and Holland, Jens feels ready to take on new challenges and apply some well-earned lessons to a company that is excited to embrace the future. We asked Jens what inspired him to make the move after 24 years: “APL Logistics is a very interesting entrepreneurial company; it’s so very focused on customer solutions, and tailor-making them to fit customer needs. I was obviously seeing APL Logistics from the other side for many years, and it was always a very strong competitor.”
Founded in 1977 off the back of APL Liner (dealing in ocean liner shipping), APL Logistics is a US$1.8 billion supply chain services provider with operations around the globe. As the company describes itself, ” APL Logistics designs and operates smart, globally integrated supply chains. We combine origin and destination logistics solutions with transportation services across all modes and regions of the world.” Whilst it does deal in automotive and technology products, APLL mostly focuses on consumer products, orchestrating and synchronizing the supply chain by flowing products based on real-time or close to real-time demand. “We provide end2end supply chain planning with an optimized product flow, which we deliver through effective IT solutions with the right business partners,” explained Jens. “We offer a strong global footprint to support sourcing and new markets entry, together with an industry-leading Key Account Management program to ensure continued growth and optimization for our customers. Furthermore, together with KWE, APLL offers ocean, rail and air freight services globally.”
Jens was brought in to APLL primarily as a fresh pair of eyes to take a look at the company’s operations in the EMEA region and to make them more customer-facing. Jens’ strategies for developing APLL EMEA include staying close to key customers, dealing with a wider range of products, making sure that APLL are well represented in the big locations like London, Hamburg, Istanbul and Dubai, as well as a push in the African market. However, it is this focus on customers that is most important both to APLL.
Engagement with customers is something that Jens learnt the value of in his old company: APLL’s existing flexibility in this area, and its interest in growing this side of its operations, was what most appealed to the new VP: “It’s the customer centricity. You really have to listen to and work with your customers. That’s one thing that I definitely take with me into the new job. Another, which is along the same lines, is the importance of listening to your customer and taking that into product innovation and product evolution.”
Whilst innovation across the board is occurring in logistics, as it is with any industry, the most exciting area of development is of course within IT. Whether online interfacing with customers, managing their databases or using apps to calculate fleet efficiency, IT is making logistics faster and more efficient wherever it is applied, and whichever company best utilises this tool is king:
“In the past, there have been two types of logistics providers – those with the infrastructure but not the software, and those with the software but not the boots on the ground. Companies who are trying to combine the two will have the very best chance at competing, and that includes APLL. First of all, our software improves the experience for our customers and our suppliers, but it also lowers costs across the entire Supply Chain. Logistics is a low margin business – so if you don’t constantly take cost out and become more efficient, then you wake up with a big headache sooner rather than later.”
The software that APLL trusts to give it this competitive edge includes Oracle Transportation Management software (OTM). Whilst the company does not run many of its own assets in terms of fleets, instead outsourcing to their trucking partners, OTM is valuable for APLL in its ability to support efficient route planning for said partners and thus save on fuel, worker hours etc. Tableau is another IT staple for the company, which they use for customer presentations, analytics and other instances of clearly presenting and handling their company data. However, valuable though these pieces of software are, for other areas of their operations, APLL’s needs are more bespoke:
“Where we really put our intellectual property is in our back-office operation systems, and how we interface with our customers. Customers often interface in different ways depending on their particular needs. So, we mix our understanding of the global supply change with our recognised standard software, but we also tailor-make and adapt the interfaces to work for our customers, whether that is apps, web browsers or EDI interfaces.”
IT innovation is ongoing, and Jens has also begun to implement other changes in the EMEA region in cooperation with APLL global strategy. The company is shifting its focus on to its key accounts, which it plans to closely develop products around and in conjunction with. In particular, the company plans to focus on its end2end services: “We’ve had a lot of our customers for many years, and you have to constantly evolve. Obviously, logistics is a global network, so it’s not like we can do whatever we like in EMEA and it will automatically fit APLL across the rest of the world nor its customers for that matter.
Much as IT is the fasted-developing tool in logistics, the demands upon the industry from its customers are changing swiftly, and have transformed drastically since the birth of the internet. We can’t talk about changes in logistics without talking about the changing trends in the way we shop, and therefore in the way companies ship and deliver. In this evolving post-internet landscape, we asked Jens how logistics had adapted to the shifting trends:
“You and I have decided to start shopping via the internet: we buy three things and return two. That has had a big impact on the international supply chain. It used to be more predictable: companies used to order big bulk shipments, and these would then flood the market. Now, it’s all about last minute demand fulfilment; it’s much more IT integrated, and it’s about picking up those consumer shopping signals to trigger transportation. All the orders are becoming smaller and much more frequent, not just in Europe and America, but in also Africa and the Middle East. The only exception is Dubai, which has overtaken London as one of the biggest store shopping centres of the world thanks to its supermalls. The physical shopping experience is still happening there, but it is a completely dying trend in European and US cities as such.”
The frequency of such deliveries raises concerning questions about the environmental impact of this growing trend. Fortunately, Jens had some reassuring answers: “If you have a normal car, and you go shopping on a Saturday and drive more than 25 kilometres (15.5 miles) to buy some sneakers, you have actually left a higher carbon footprint than if those shoes had travelled around the world in an ocean container. Companies are doing a lot to reduce impact: most delivery vans are hybrids at least, and we encourage our customers to be smart in terms of packaging materials and delivery methods.” Of course, APLL can mainly advise, but they can also pack and plan in order to reduce the impact of their customers’ choices as much as possible: for example, if a customer wishes to airdrop a delivery, “we make sure it is full, and we ensure not to use excess packaging.”
Jens highlights that many couriers are also working together to share deliveries and bring separate packages together in one vehicle, and of course, companies such as Amazon are also experimenting in new initiatives such as drones. However, given the speed with which our reliance on convenience and digital living increases, the shifting trend towards ecommerce doesn’t seem like it will slow down any time soon. We asked Jens to describe his predictions for the world of logistics in five to ten years, as it continues to adapt to these demands
“I think there will be more consolidation within the ocean liner industry. There’s already been a lot of consolidation there, but the industry needs more. The whole concept around integrating and digitising the international supply chain will also have taken full effect, which will save customs officials time that they currently spend checking endless documents coming in and out of the border.”
“Then, I think we will see that quite a lot of the freight forwarders or logistics companies are gone; there will be a big consolidation in the market, because a lot of companies today live by being the local hero. This need will diminish as the supply chain becomes more reliable, predictable and fast. Business to consumer (b2c) will still thrive, and the international supply chains will trend more towards one to one: you say ‘I would like to buy these jeans’, they are produced and sent.”
This level of increased small shipments sounds like a logistical nightmare, or at the very least, costly and hard to sustain, unless the industry changes to rise to this increasing challenge. “More near-sourcing and near-production would speed up the international supply chain,” suggests Jens. “Then, there is 3D printing. Instead of holding finished goods, warehouses would hold raw materials and massive 3D printers, which will cater for a lot of personalized design and production of goods.“
3D printer warehouses and facilities would not only answer the need for near-sourcing and therefore reduce in shipping, but it would also cut down on storage and waste. Perhaps 3D printers will even become a household norm someday, but for a transitional period at least, Jens feels that the number of raw materials needed will limit this trend to people focused on crafting specific items. Instead, this vision of 3D printer warehouses or facilities might be the answer to a faster yet more sustainable logistics world.
Whatever the future holds, APLL are paying close attention, poised and ready with a combination of software, infrastructure, strong global partnerships and, mostly importantly, their priorities focused on their customers. With that, APLL also put a lot of emphasis on hiring and educating the best logistics professionals and teams globally. As the world shifts, APLL are prepared to move with it, following their customers; changing expectations and ever adapting, to make sure that they are a leading logistics company not only today, but for tomorrow and the day after as well.
