The panel included: Oliver Lucas (founder and Managing Director of ecom consulting), Stephan Meyer (freelance management consultant), Dr. Alexander Nehm (Managing Director of Logivest Concept), Prof. Dr. Michael Schröder (Academic Director of the Baden-Württemberg Cooperative State University, Center for Advanced Studies) and, as host, Kuno Neumeier (Managing Director of Logivest and initiator of the LogiVisor Award).

materialfluss: 2020 is only a few days old - what are your economic expectations?

Alexander Nehm: We have a good overview of new logistics buildings, which are often related to contract logistics. In 2019, the perceived dip is also reflected massively in the figures. We had around 4.2 million square meters of newly built logistics space in 2019, compared to over five million square meters in 2018. For 2020, I still lack a bit of substance on which to base a good forecast. The mood is defensive, that's for sure.

"The topic of retail and e-commerce will continue to be a driver." (Oliver Lucas, ecom) © Logivest

Kuno Neumeier: I can confirmthat . However, we have very positive momentum for 2020 in many of the projects that Logivest is supporting. In some cases, however, we are already noticing that the brakes have been applied to projects that have not yet been decided. The drivers for logistics properties are retail / e-commerce and the automotive sector. Despite the odd insolvency, we see the situation as positive. When the cards are reshuffled, new situations arise, including on the real estate side.

Stephan Meyer: I have noticed an unbroken need to select logistics service providers while at the same time shippers are becoming increasingly uncertain about how to actually do this. Logistics requirements are constantly changing and many shippers are trying to quickly create full transparency about the various providers and locations. However, this search process has remained unchanged for 20 years and is too time-consuming. This needs to change and happen more quickly; it is often more important to act than to first examine all conceivable alternatives "typically German".

"I think the industry needs to become more constructive." (Alexander Nehm, Logivest) © Logivest

Oliver Lucas: The topic of retail and e-commerce will continue to be a driver. We see two effects: Due to today's platform economy, it is becoming increasingly important for logistics service providers to have a much higher level of expertise than five or ten years ago. Inventories have to be assigned to channels, so a delivery order is not just an order, but a channel-specific order with specific logistics requirements attached to it, such as packaging, SLA, transport guides, inserts, documents and so on. The service levels that are expected are also increasing. This requires a professionalization of logistics that not everyone can deliver. On the other hand, we are seeing many traditional manufacturers that previously had distribution structures to retailers and are now required to handle multiple sales channels. Some of these companies are bypassing the retail sector and have to find their own ways of approaching the end customer. This massively overburdens many in terms of processes and systems.

Michael Schröder: I take advantage of the fact that I am constantly supervising several hundred students, all of whom have to write several scientific papers. As these are always concrete, current problems from the companies, I always derive trends from the topics. In addition to the "classics", there is an increasing number of papers that deal with insourcing and papers that focus on automation in the warehouse. This is new in its abundance.

"There are no more than ten logistics service providers in Germany that I would say are capable of automation." (Kuno Neumeier, Logivest) © Logivest

mfl: Does the topic of automation play a role in your company, Mr. Neumeier?

Neumeier: Definitely . Many projects are decided based on the availability of workers at the location. If these are not available, I have to compensate for this with automation. This works for longer-term mandates for logistics service providers, as intralogistics expenses are usually amortized within seven to ten years.

mfl: How do you assess the location debate and the sometimes fierce hostility against new settlements?

Schröder: The external image is certainly also an issue in logistics. As soon as a construction fence goes up somewhere, pensioners protest against it. But mayors are also challenged here; I know some who would prefer to close a port right away and sell "life on the water" instead. That often sounds more elegant in a city's public image.

"The demands on logistics are constantly changing." (Stephan Meyer, management consultant) © Logivest

Neumeier: The topic of citizens' initiatives is unfortunately a trend topic in a negative sense. These initiatives are becoming increasingly professionalized and are developing a real momentum of their own. However, the threat posed by individuals within these initiatives has now reached a level that makes me wonder.

Schröder: There are protests at sites that are so close to highways that there aren't even any animals there, let alone people who live there or would want to live there. At a citizens' meeting in one such case, a pensioner present berated me for ordering a lawnmower on the internet. Key word: he wouldn't want to live in a world like that. What the gentleman didn't realize was that the local DIY store doesn't produce lawn mowers either and that the direct sales channel to my home may be the more resource-efficient option. You have to tell people: don't listen to the agitators among the angry citizens.

Nehm: In terms of visually appealing or space-saving layouts or general "compatibility", however, the industry has not covered itself in glory in the past. Ten or fifteen years ago, the impact that logistics properties have on their surroundings could have given some people the idea of taking countermeasures. Now the issue is virulent. I think the industry needs to become more constructive.

Meyer: Many logistics service providers do not see themselves in the role of providing information, as they see themselves as an extended workbench.

"The typical SME has to earn money first, they don't do anything on a whim." (Michael Schröder, Baden-Württemberg Cooperative State University) © Logivest

Neumeier: A sensitive discussion with citizens and local politicians is essential these days - both for shippers and logistics providers. All too often, shippers approach several service providers and trust that someone will organize the space for them at a certain location. This approach is rarely successful and leads to accusations that the industry is acting unprofessionally.

mfl: Is sustainability a topic in which logistics service providers can now be active without immediately stylizing themselves as logistics heroes, because you don't have to go that far?

Lucas: A stronger profile and positioning is more necessary than ever in order to avoid being selected for projects simply on the basis of size. This is due to the lack of a neutral body that would process this, but also to the service providers' interest in positioning themselves more clearly here.

Schröder: For me, sustainability is a hygiene factor. Decades ago, it was ISO 9001, but no one crows about it anymore, then ISO 14000+X. Now it's sustainability. I predict that the topic will be standard in five years' time.

Meyer: I believe that there have to be hype topics, because only these drive service providers to make changes. Innovation happens where clients demand it - we also noticed that with the LogiVisor Award.

Neumeier: Today, nobody knows what CO2-neutral means. Concrete. That's good for the consulting industry. But thanks to Greta Thunberg and co. a huge social hype has arisen. Our industry just doesn't yet have a definition for the "CO2-neutral" label. For logistics companies setting up here, this aspect is a great entry point for local authorities. In other words, if we announce that the planned logistics property will be CO2-neutral, such as photovoltaic systems or green roofs, local authorities are often willing to talk to us. So we need this topic.

mfl: So is there an opportunity in the challenge, as there so often is?

Schröder: Yes and no. However, we shouldn't forget that many consumers ultimately don't care whether the retailer or manufacturer is CO2-neutral. There are many companies, such as REWE, that have been collecting CO2 data on their invoices for years but are still unable to disclose this to their customers. Therefore, the carbon footprint does not decide whether to buy chip brand A or B. I don't even see the beginnings of a certification system here.

mfl: Is there a consensus around the table that logistics service providers should listen more to what moves society?

Meyer: I would rather say that the service providers are experiencing an identity crisis without realizing it themselves, as they are not aware of their own role in the logistics context. The time of the "extended workbench" is over. Instead, clients should consider choosing a service provider that can raise logistics to a level that they cannot achieve themselves. This would be an opportunity for service providers to differentiate themselves and not simply rent a hall and set up operational processing. That is no longer enough.

mfl: An appeal for professionalization?

Meyer: Rather to clarify our own identity. In terms of understanding our role: what will keep us in business as a service provider in ten years' time? This is very different from the 4PL approaches of earlier years, for example.

Neumeier : There are many opportunities for logistics these days, such as urban logistics. No service provider has yet dared to look at how logistics can work in cities with more than, say, 100,000 inhabitants. This is an ideal field for the industry. Or let's take automation: there are no more than ten logistics service providers in Germany that I would say can do automation. That's incredible!

mfl: The low margins are certainly one reason for the restraint...

Schröder: Yes , the typical SME has to earn money first, they don't do anything on a whim. With margins of two to three percent for classic transportation and handling services, this should come as no surprise. And as far as the consulting services required from the service provider are concerned: The company would first need staff for this - which it cannot find.

mfl: Finding an identity, focusing on sustainability, paying attention to automation trends - what else can you suggest to logistics service providers?

Meyer: That also applies to the client side, by the way. They also have to think about it. The less I let the service provider participate and really involve them, the less they will move towards innovation.

Neumeier: To put it positively: If you work well in a niche, you have the best chances as a logistics service provider - showing the courage to fill the gap and moving away from offering "everything" must be the motto.

Lucas: There is potential for new entrants in logistics as well as for established companies that already have long-standing good relationships with their customers. These can also change. Learning can happen quickly with the right partners on board. There is still sufficient demand and need for further competent logistics service provider capacities in Germany.

mfl: Gentlemen, thank you very much for the interview!

materialfluss was a guest at Logivest in Munich for the ROUND TABLE in January. We would like to thank them for their organizational support.