This is part two in a two-part series. Read part one here.
The 3rd party logistics (3PL) sector has seen some great developments in the warehouse, but there are some pretty awesome things happening outside the warehouse in emerging markets that may change the face of global order fulfillment in the very near future.
If you’ve even considered stepping onto the global scene, these new developments are worth noting:
India’s Goods and Service Tax (GST). India has been a difficult country for product distribution due to their complicated tax system. Between VATs, entertainment taxes, purchase taxes, luxury taxes and all the rest, just selling to Indian customers can be a challenging proposition. Expected to be fully implemented by April 2016, the new Goods and Services Tax replaces all the miscellaneous taxes that came before. With just one tax rate to calculate and increasingly higher disposable incomes of its citizens, India is priming itself to be a new market for Western goods.
On-going global infrastructure expansion. China has been working hard to expand its infrastructure for some time, but India is now joining it in these efforts. By adding new and better roads, increasing port capacities and modernizing airport terminals and runways, it becomes easier to centralize distribution centers, speeding deliveries.
Before UPS and FedEx were rewarded expanded domestic contracts in China in 2012, customers could wait weeks for shipments since packages were handed off at multiple points along the way. Loss and theft were real problems, too. With expanded infrastructure, more reliable shipping companies, both foreign and domestic, will be able to get your package from your warehouse to your Chinese or Indian customer in a fraction of the time it currently takes. Packages that once took weeks to deliver may soon be delivered in just days — this is an important part of your recipe for success overseas.
Africa. As far as global markets go, Africa has been a tough nut to crack. Due to a lack of infrastructure and connections, it’s been nearly impossible to get goods into interior countries without spending a small fortune for the privilege. Because of that, many African nations are still basically uninvolved in the global economy except as exporters of raw materials.
This is all about to change:
Two international freight forwarders, Panalpina and Indu Maritime and Logistics, have secured contracts that will allow global distributors to finally reach the many underserved buyers across the continent. By creating gateways in Djibouti, Morocco and Kenya, these pioneering corporations are aiming to completely overhaul African trade. Watch this market, it could be the next hot spot.
Whether you’re hunting the newest global trend or just looking to update your own warehouse, the world of 3PL is going through some rapid changes right now. It’s going to pay in dividends to keep your eyes peeled for opportunities as the world gets smaller and the robots get smarter.