A new leader in the making ??; Chinese giants are taking over supply chains ??; How the Red Sea crisis changed the game ?? - what happened in 2024?

?? Hello and welcome to the Wiser Logtech #Recap, where you'll find a handful key logistics and supply chain stories summarized for your convenience. I'll share my thoughts, and some suggested paths to positive (or at least the best possible) outcomes. As with all content, please like, share, and comment. Picture the algorithm as a hungry hungry hippo, feeding on each interaction ??.

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A new leader in the making ?? How DSV became top dog.

This story and the top global forwarding landscape could be so different today if things hadn't gone 得斯威国际货运有限公司 's way.?

Panalpina and Agility could have joined forces, rather than being sequentially acquired by the Danish giant respectively in 2019 and 2021. If DSV had still failed to acquire 美商宏鹰国际货运 (which led to CEVA being picked-up by 达飞轮船 ), where else may they have looked for an acquisition? 波洛莱物流 wasn't exactly for sale until recently, when Bolloré's dodgy dealings (to put it lightly) on the African continent put the family in a very precarious situation. The rest of the top players such as DHL , 德迅物流 , and NX GROUP (NIPPON EXPRESS GROUP) , weren't truly feasible targets at the time, or simply not for sale.

DSV's M&A strategy since the beginning of the century is nothing short of remarkable, and makes me wonder what others could have achieved with a bold strategy and some actual commitment to a specific path.

With DSV now acquiring 德铁信可 for 14.3bn EUR, they will take the top spot in most global freight forwarding lists.?

What does this mean for others?

There is a lot of talk about Kuehne+Nagel and how they are going to fend off this new giant and avoid losing market share to them. I'm still uncertain of how K+N's restructuring efforts went, but by all accounts they lost some great people during their power-centralizing efforts. The funny thing is that this could have been a non-issue for them had Kuehne+Nagel's heir extraordinaire, Klaus Michael Kuehne, not written-off bidding for Panalpina back when DSV made their winning bid.

“If the Danes absolutely want to buy a hopelessly overvalued Panalpina, then you can't prevent it. Maybe a year ago it might have been a financially attractive target, but at the moment its operative potential and the valuation do not match.”

One thing is for sure: in this particular case, short term vision lost out to long term strategy and consistency.

The impact of Logistics Technology ??

One of the major reasons why I believe DSV could implement their M&A strategy and execute it so successfully is down to technology. WiseTech Global 's CargoWise is the leading solution for global freight forwarders for a reason. Once implemented and fine tuned (a gargantuan and expensive endeavour), the productivity gains are theoretically substantial and scalable.?

My theory is that Kuehne+Nagel were not able to envision the potential gains from technology when analysing the opportunity to acquire Panalpina, leading to them making what may have been the right decision for them at the time, but an overall unfortunate one.

DSV rolled-out CargoWise to Panalpina so quickly that they were ready to go again two years later, using the same blueprint to move Agility onto the common CargoWise install.?

Technology has been a true differentiator for a while, and is one battlefield that is set to change quite a bit with the explosion of “AI everything” and the multiplication of very capable solutions.

The big question now is what will DSV do? Roll out CargoWise onto Schenker, or finally pull the plug on what has at times been an abusive relationship and leverage Schenker's technology to go their own path? Clearly a topic for a future newsletter.

?? LET'S GET IT DONE ??

The acquisition of DB Schenker presents a unique opportunity for DSV to emancipate themselves from a technology perspective and take control of their own digital destiny. This is a once in a blue moon opportunity that is unlikely to come around again, unless they maybe look at acquiring the likes of Dachser or others who use their own technology.

We are all well aware of WiseTech Global's track record. They love to use that price list lever to hit their financial goals. With the release of their latest flagship product, CargoWise Next, seemingly pushed back to an undetermined date, their expected results are definitely in jeopardy, which likely means more price increases somewhere.

DB Schenker has managed to maintain a strong position as a leading global forwarder with the technology that they have built. I would love to see DSV make the most of this with a huge modernization effort, to build something truly unique, that fits their specific needs. I also believe that the democratization of AI will reduce overall development and maintenance costs, making the switch to whatever DB Schenker has built all the more attractive.

If done right, this approach could also enable them to continue their M&A strategy, acquiring competitors and opening new markets, implementing their technology with great results. The likelihood of being able to continue this strategy with CargoWise is low, as many companies already have fine-tuned CargoWise set-ups that DSV would struggle to squeeze more out of.

I'd assume that the decision makers at DSV are evaluating their options, crunching costs, and making a plan. The big question has to be: how much is too much when it comes to that yearly CargoWise bill?

As for Kuehne+Nagel, the only way they can claw their way back to the top will be through finding a new, innovative offering for their customers, and hoping that DSV cannot deliver the quality expected from customers in 2025. A tall order.

How the Red Sea Crisis = Money??

There is something that feels wrong about Carriers and other logistics services providers making hefty profits during a crisis. We saw it at the heights of the Covid-19 pandemic, and we're seeing it today with the Red Sea Crisis inflating freight rates and causing mayhem on global trade lanes.?

This crisis benefited air freight the most. Victim of its own popularity, air freight capacity quickly became a constraint and rates soared. As the Red Sea Crisis continues beyond 400 days (thanks Lars Jensen for keeping us informed with your daily updates!), and some big players continue to monopolize air cargo capacity, it feels like more of the same for 2025.

According to Xeneta 's update from early December 2024, air cargo hit 13 consecutive months of double-digit growth… Kind of puts all of those “eCommerce is dead” articles we've seen pop-up in the past 5 years to shame, doesn't it?

?? LET'S GET IT DONE ??

Between the US-China trade war threat, European industries collapsing, and the cost of living crises bearing-down on the middle-class across multiple continents, it feels like something's got to give. There are only so many cheap knock-off goods that you can buy from Amazon, Aliexpress, SHEIN, or Temu, before you realize that they aren't making your life any better, and that food, energy, house insurance, transport, and many other key necessities are eating away at more and more of your monthly budget. Those essentials aren't really optional, but eCommerce is.

As for the Red Sea Crisis, there is only so much that will be tolerated by some regional powers until they step-up their involvement. Sure, the megaprojects that Saudi Arabia has in play will not be finished for a while, but as they near completion, if there are still issues affecting accessibility, there will be the need for a resolution.

It could all end now, but too many big corporations and governments have more to lose than to gain by attempting a resolution.

Can't Stop Won't Stop China ??

When you truly take a moment to stop and think about China's influence and control over global manufacturing, you realize that it is for all intents and purposes an unstoppable force. If Chinese companies do not manufacture something directly, they are likely to have funded the manufacturing site in Mexico, Eastern Europe, or South-East Asia. There is also a strong probability that Chinese investment funds the raw materials, and vast parts of the transformation of said raw materials into parts ready for manufacturing.

There are two big subjects that I want to point out here, as it truly feels like their impact on global supply chains is being underestimated, or at least underreported, as is their importance to the end consumer, wherever that consumer may reside.

Chinese Electric Vehicles have forever changed the landscape ??

Yes, Chinese EVs were heavily subsidized by the Chinese government. But seriously, so what? Haven't the likes of Maersk and CMA been bailed out when times were hard? Take a look at the EU: Agriculture, Renewable Energy, Transportation, “Horizon Europe R&D”, not forgetting Bulgarian mansions for friends of the country's leadership…?

The facts are simple: instead of spending the past decade innovating in their existing powerhouse fields such as the automotive industry or in new areas like emerging technologies and AI… Europe became complacent and is now throwing shade at China because they missed the boat. That same EU is happy to welcome BYD manufacturing plants in Eastern Europe to circumvent the tariffs and create local employment. Oh the irony.?

Chinese EVs are cheaper, with better technology, and great cost/performance ratios. Does the odd one spontaneously combust? Probably. But so do Teslas. I remember my dad's car exploded going down the motorway way back when I was too young to know what a supply chain was. With manufacturing moving local, and supply chains having to adapt to the new requirements of these emerging EV providers, it will be very difficult for incumbents to catch-up. It will then take time for them to reestablish trust in their brands, and to rebuild the logistics infrastructure that is being torn down right now due to crumbling demand and many bad decisions.?

TEMU and SHEIN are in control ??

Bold statement, but with 1/3rd of all US ecommerce purchases coming from these two giants, it is hard to see it otherwise. They haven't just set themselves up as the cheap goods providers extraordinaire though. That was the entrée, and they are now moving on to the pièce de résistance. We're talking about opening up the fantastic supply chains that they have built to third parties and competing with the best.

Anyone who hasn't already noticed what TEMU and SHEIN have in place today should take a long hard look at some of their subsidiaries and announcements made on LinkedIn and in industry media. Change is happening, and depending on who you are, it may well impact you in a bigger way than you would like to believe. There is nothing preventing large BCOs from jumping on the “TEMU Logistics” bandwagon, benefitting from reserved capacity, highly digitized processes, and results that tend to speak for themselves.?

You know me, I'm not a fan of consumerism and what it represents, especially when it comes to quantity over quality. But I can respect and admire a solid supply chain set-up and a major power play. Definitely something to watch for 2025.

Final Thoughts ??

Only three of what could have been a dozen or so big moments for 2024 that have all set-up interesting events to come in 2025 and beyond.

What stands out for me is the impact of technology on such events. China is achieving its dominance through technological advancements and having a digital-first approach to supply chains. Technology had a big part to play in DSV's growth over the past decade and some change, with their acquire - implement - ingest - rinse and repeat approach paying dividends today and leaving others wishing they'd made different decisions and had a wider view.

I'm genuinely excited about 2025 and the change that it may bring. Sure, I'm keeping tabs on AI, but I'm all about those foundational and fundamental changes that only events like the aforementioned 3 can bring about. AI is still in its infancy, and although everyone is going AI Agent mad, I prefer to keep my focus on what matters right now: good data, good technology, good processes, integrations, ecosystems, and great people. AI will find its place in there somewhere, just not right now.

See you next week, and as always - please share, like, and comment. Every interaction feeds the algorithm and grows organic reach. If you do not believe this content is worth a share or a like, then let me know why so I can do better next time!?

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2025 is going to be a huge year for AI, compliance, connectivity, BCO Logistics Technology, and more. And I'm here to break it all down for you, so you don't have to.

Here's what you may have missed:

1. Venture Capital forgot how to pick winning founders who solve problems
2. Greed and Ignorance led to venture capital's failed logistics and supply chain tech attempts
3. WiseTech Global's annual results breakdown shows that the devil truly is in the detail
4. Logistics and logtech funding has fallen off a cliff with everyone bar the big whales feeling immense pain
5. Logistics technology's addiction is unveiled but change seems to be someone beyond the horizon
6. RTTVP providers have killed the market by being consistently awful at delivering any real value to desperate customers

Who am I? ????

I'm a logistics and supply chain enthusiast with interests in geopolitics, business, and all things tech. With a background in marketing and corporate development, I'm a LogTech strategist, providing advice and various levels of support to logistics technology and service providing companies. The Wiser Logtech and Wiser Logtech #Recap newsletters are my way of sharing my thoughts and an attempt to break the status quo, disrupting the industry's worst practices with every published issue.

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