Logistics sector in emerging markets faces fierce competition

The development of
emerging markets in
the decades ahead will
fundamentally change
world trade patterns
creating opportunities and
challenges in the logistics
sector, according to
PricewaterhouseCoopers’
latest Transportation and
Logistics 2030 report. (See
page 1)
Some of the highlights of
the report demonstrate the
dominance of China and
India in the seven-country
line-up which includes
Brazil, China, India,
Mexico, Russia, South
Africa and Turkey.
• Free Trade Zones and
resulting increases in
foreign direct investment
are expected to lead to
above-average growth
in the logistics sector in
emerging markets. FTZs
are in place in almost
all emerging markets
with 600 in the approval
process in India. The
Asean-China Free Trade
Agreement represents the
world’s third largest free
trade area after EU and
Nafta.
• Emerging markets will
continue to face challenges
around law enforcement
and were the worst
offenders in Transparency
International’s Bribe
Payers’ Index. (See graph).
• Market growth will see
the entry of multinational
logistics service providers
leading to fierce
competition followed
by consolidation and
the number of logistics
providers is expected
to fall sharply. PwC
analysis shows that 69%
of companies that were
taken over during the
second quarter of 2010
were located in Asia and
Oceania.
• Logistics service providers
from emerging markets
are unlikely to gain
significant market share
in developed countries.
Instead they will
concentrate on domestic
markets and the strong
growing neighbouring
countries.