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WORLD OF INDUSTRIES 02/2019

WORLD OF INDUSTRIES 02/2019

Smart logistics

Smart logistics equipment and machinery to drive growth in logistics sector in the coming decades NEWS AND MARKETS With conventional growth slowing down in China, all industry sectors are adjusting to this ‘new normal’, to ensure their readiness for the coming decades enterprises even in logistics sector are swiftly moving towards latest technologies like logistics 4.0 and smart logistics equipment. At the LET event in Guangzhou, one can witness the direction in which logistics sector in China headed. D ecades of double digit growth has made China not just a manufacturing powerhouse, but also one of the biggest logistics market in the world. The logistics industry has played an extremely essential role in China’s rise to top. However, in comparison to developed industrial nations China’s logistics industry faces high operational costs and relatively low efficiency. The ratio of China’s logistics cost to GDP is roughly around 14 %, as compared to USA’s nearly 8 %. Taking automobile sector for example, the logistics cost ratio in China is somewhere around 8-9 %, whereas in Europe and America is around 3 % and 5 % in Japan. According to World Bank’s international Logistics Performance Index, which covers six key aspects: customs, infrastructure, international shipments, logistics competence, tracking &tracing, and timeliness, China is ranked 26th in world. Showcasing big gaps over its competitors like Germany, Japan etc. Realizing this fact, China’s government has already taken strategic measures to reduce logistics costs and improve logistics efficiency to spur the real economy. Author: Sushen Doshi, International Correspondent for World of Industries But, over the last two years, the growth rate of China’s logistics services revenues has been facing pressure from a slowdown in the country’s GDP. According to data from China National Bureau of Statistics, the transportation and warehousing revenues have been growing much less than the average growth rate of the country. In terms of profitability as well, a continuous rise in warehousing costs and labor costs have been deteriorating the profitability for the entire sector. In the long-term, with an aging population, labor shortages will arise and due to rising urbanization the shortage of warehousing space will be inevitable, thus leading to rise and rise of operational costs. Currently, industry’s structure is also a lot more traditional in nature, which gives immense scope for modernization and incorporation of latest technologies. Now, China looks towards high-end manufacturing industry and the domestic consumption boom to drive up the demand for logistics services. From 2018, public sector as well as private companies are looking to prioritize on upgradation of logistics facilities and equipment to enhance the efficiency of the industry. Under such circumstances, smart logistics is gaining ground and becoming a key area to focus on for the whole industry to improve. Smart logistics has significant potential, for example, with modern warehousing concepts, companies can save nearly 50 % on land costs and labor costs. By fully monitoring the whole process of material transfer and storage, the efficiency and accuracy can be improved. Furthermore, with data collected by smart logistics systems, enterprises can more provide value-added services and derive new business models for customers. Future market opportunities China’s ambitious belt and road initiative is one of the driving engines for future development. It contributes largely to exports, and is expected to continue boosting logistics demand in the future. At present, most provinces and cities en route the ‘belt and road’ are 14 WORLD OF INDUSTRIES 2/2019

accelerating the development of logistics industry, especially the mid-western area represented by Zhengzhou, Xi’an, Lanzhou, and Urumqi, in a vision to build themselves as logistics hubs. After the establishment of transportation logistics hubs, certain export processing enterprises targeting Europe and other regions may choose to produce, process, disassemble and package locally; it would also form clusters of populations in the mid-western area, accelerating its process of development. China’s intelligent logistics market reached Yuan 200 billion in 2016, experts predict it will exceed 1 trillion Yuan by 2025. Some emerging technologies including drone, robotics and automation, and data analytics are in high demand in logistics industry, as well as wearable devices, 3D printers, driverless trucks and artificial intelligence are being used in storage, transportation, delivery and other end parts of logistics. As China’s manufacturing sector undergoes transformation, factories will also focus on reforming their logistics operations, thus leading to an enormous demand for intelligent factory logistics systems. In China’s smart logistics segment, vendors are generally classified into three types; hardware suppliers, software suppliers and comprehensive suppliers. Amongst them, the comprehensive suppliers are the ones with a better competitive advantage thanks to their integrated services. Most of the foreign companies operating in this space are comprehensive suppliers, and enjoy a competitive edge in terms of technologies and project experience with strengths in high-end logistics hardware and software. Whereas domestic companies, with advantages in price and local reach have a competitive edge in mid-range and low-end projects. Domestic manufacturers mainly serve as equipment suppliers or system sub-contractors with each of them operating on a small scale. With the improvement in R&D as well as availability of intelligent logistics equipment, the systems provided by domestic manufacturers are able to meet the needs of most general-purpose applications, significantly impacting the market share of foreign manufacturers who are engaged in complete intelligent logistics equipment production. Moving forward, domestic manufacturers need to further increase their input in R&D to improve the level of hardware, lean production and software performance. Rising demand in the future for intelligent equipment in pricesensitive industries will provide more space for the development of domestic manufacturers which offer competitive prices. Based on integration experience and knowledge gained over time, domestic manufacturers will have the opportunity to expand their scales and become stronger in some application fields. Logistics equipment and technology exhibition While in the midst of multi-level transition of China’s economy as well as manufacturing and logistics industry sectors, events such as LET (Logistics equipment and technology exhibition), become the guiding light for large and small enterprises. LET, is a CeMAT Asia event, and is the biggest smart logistic equipment and technology trade fair in South China. Since the first edition in 2010, LET has grown to become a successful brand in itself over the last nine years. With the exhibition expanding its floor space display area, increasing number of visitors and exhibitor companies, and improving level of its exhibits, LET is becoming one of the strongest events in the South China region. Now in its 10th edition, the logistic equipment and technology show aims to cater the market with latest trends in technology, innovation and services in the sector. With a floor space of 20,000 square meters and around 32,000 visitors in 3 days, the LET show was a big success in 2018. The 10th edition of the LET show will be hosted at the China Import & Export Complex in Guangzhou from 29th - 31st May. 2019.In 2019, the LET event will be stronger, as it will be hosted by Hannover Milano Best Exhibitions (Guangzhou) Co.,Ltd, a joint venture between Guangzhou Best Exhibition Co., Ltd. and Hannover Milano Fairs Shanghai Ltd. The show will combine the strengths of both the partners, and become one of the most influential shows for the Chinese logistics market. Like previous years, the show promises to provide a high-quality trade fair platform for exhibitors to display, communicate and find partners for co-operation in Chinese logistics market. In 2018, nearly 300 top logistics equipment and technology companies from all over the world participated and brought their advanced exhibits like, intelligent forklift trucks, smart logistics systems, logistics robots, AGV, green material handling technology, lithium battery fast charging technology, laser slam unmanned guiding technology, smart factory solutions, etc. Furthermore, nearly 100 industry experts and scholars shall be present onsite to discuss on current trends of intelligent logistics, automation, information technology, advanced manufacturing, Industry 4.0 and Logistics 4.0. Visitors can interact with exhibitor companies and work together to develop tailor made solutions for the South China market. Over the last few years, China’s e-commerce industry has seen explosive growth, and so has the demand for logistics products and services like AGV, robots, logistics IT, sorting and delivery systems etc. At LET too, visitors have expressed their interests in these areas. The product category at LET includes mechanical handling equipment like cranes, elevators, cable cars, lifting equipment and platforms, hoisting platforms, bulk goods and monorail conveyors, trolleys, industrial trucks, forklifts, robotic handling systems, driverless transport systems, storage and retrieval equipment for shelves and racks, components of drive technology, hydraulics and pneumatics. The display area also has products for warehousing and shelving systems, industrial doors and gates, pallets, bins and containers, cleaning systems for warehouses and storage facilities etc. Exhibitors will also showcase various packaging and order picking systems, weighing and metering devices, labelling and identification systems etc. In terms of logistics software, visitors can see software for material flow and movement, various types of sensors and auto-identification systems, branch specific software for transportation logistics etc. Photograph: Fotolia www.chinalet.cn Editorial Directors: Dirk Schaar, Email: d.schaar@vfmz.de Winfried Bauer, Email: w.bauer@vfmz.de Editorial board: Peter Becker (Editor-in-chief), Email: p.becker@vfmz.de Nicole Steinicke (Editor-in-chief), Email: s.steinicke@vfmz.de Manfred Weber, Email: m.weber@vfmz.de Svenja Stenner, Email: s.stenner@vfmz.de Assistant editors: Svenja Stenner, Petra Weidt Design/Layout: Anna Schätzlein, Sonja Daniel, Anette Fröder, Mario Wüst Epaper designer: Katja Rüdell Managing editor: Winfried Bauer Publishing house: Vereinigte Fachverlage GmbH Lise-Meitner-Str. 2, 55129 Mainz, Germany Commercial Register No.: HRB 2270, District Court of Mainz VAT-ID: DE149063659 Privacy Statement: ds-vfv.vfmz.de Managing director: Dr. Olaf Theisen Publishing director: Dr. Michael Werner, Email: m.werner@vfmz.de Correspondent India: Sushen Haresh Doshi M.Sc. Advertising sales director: Beatrice Thomas-Meyer, Email: b.thomas-meyer@vfmz.de Advertising sales manager: Oliver Jennen, Email: o.jennen@vfmz.de Andreas Zepig, Email: a.zepig@vfmz.de Sales representatives Austria: Heinz-Joachim Greiner, Email: verlagsbuero-greiner@vfmz.de France: Marc Jouanny, Email: marc-jouanny@wanadoo.fr Great Britain, Ireland: Roberto Tondina Email: roberto@ts-communications.co.uk Italy, Switzerland: Hermann Jordi, Email: info@jordipublipress.de Sweden, Finland, Norway: Malte Mezger, Email: verlagsbuero-mezger@vfmz.de Taiwan: Amy Liu, Email: amy@hf-taiwan.tw USA, Canada, Mexico: Patrick Venezia Jr, Email: verlagsbuero-venezia@vfmz.de Advertising disposition: Annemarie Benthin, Email: a.benthin@vfmz.de Helge Rohmund, Email: h.rohmund@vfmz.de Nevenka Islamovic, Email: n.islamovic@vfmz.de In cooperation with: Hannover Fairs International GmbH, Messegelände, 30521 Hannover, Germany Internet: www.world-of-industries.com

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