Logistics

Logistics is a fundamental part of supply chain management. It consists of the organisation and management of flows of goods related to purchasing, production, warehousing, distribution and the disposal, reuse and exchange of products, as well as the provision of added value services. These days, enterprises often outsource their logistics activities to third party logistics providers and it is estimated that long-term contractual relationships, contract logistics, constitute 16% of total global logistics, while express/courier/parcel service are key to the e-commerce delivery business.

A recent study on the EU logistics market estimated that the logistics operations (excluding in-house operations) amount to €878 billion (2012) in the EU. According to the World Bank "Connected to Compete" logistics performance index , the EU logistics sector performs well on a global level, the global top largest logistics service providers are all based in Europe; six countries out of the global top-10 logistic performers are EU Member States. However, the performance varies across the Member States. While Germany has the world's highest ranking, the EU average is 3.56 (out of 5), with US at 3.92 and Japan at 3.91.

The Communication on the Freight Transport Logistics Action Plan 2007 established a list of activities to improve the framework for transport logistics operations in the EU. Discussions with stakeholders and the Logistics Conference 2013 identified that in the EU logistics costs represent about 10-15% of the final value of products. It is estimated that about half of these costs could be saved if obstacles were removed. These obstacles are in particular high administrative burden and inefficient transport chains, lack of transport infrastructure and the non-completion of the internal transport market.

Areas specifically targeted are therefore:

• Administrative burden and in particular customs procedures continue to be raised by industry as one of the main barriers for cross-border transport - in particular for efficient and fast logistics. Digitalisation can facilitate administrative procedures through the establishment of so–called single windows and the implementation of the 'reporting-only-once' principle. These issues will be addressed in the recently launched Digital Transport and Logistics Forum (DTLF) .
• As regards infrastructure, the new TEN-T framework has tripled its budget and focuses on transhipment facilities, missing links and the creation of a network of multimodal transport corridors allowing large volumes of freight to be moved efficiently.
• Transport services do not perform equally well in all modes and in all parts of the EU. Open and competitive markets tend to provide better and cheaper services and hence the completion of the Single European Transport Area remains a policy objective.
• The internalisation of external costs of all transport modes is a key topic. High negative externalities are also due to current transport patterns, where road is predominant with 70% of activity and more than 70% of the total negative externalities. The harmonisation of carbon footprint measurement will enable benchmarking of transport services as regards their environmental sustainability, while streamlining business processes and operations.