Shortages and low logistics stock in global retail sector are like a "déjà vu"
Shortages and low logistics stock in global retail sector are like a "déjà vu"
  Data  |  Analysis  |  Warehousing

Shortages and low logistics stock in global retail sector are like a "déjà vu"

Where does the Greek logistics sector is heading today and what are the future trends?
Eirini Theofanidou

Empty shelves of large retail stores in most European countries (to a small extent still in Greece), but also in the USA are recovering memories from 2020.

Fewer products and more expensive prices are not only seen in big retail chains but also in the grocery stores in the neighborhood with consumers talking about a return to the first days of the Covid-19 pandemic in early 2020. Is there any good news? Probably not in response to a recent Avison Young report that finds signs of improvement in the retail world.

Avison Young Capital Markets CEO Erik Foster says a number of complex issues affect food supply and retail chains today, as well as the role that industrial real estate plays in a company's ability to deliver its products on time.

One of the reasons is the less labor force but also the "weak" stock of industrial real estate (logistics centers and warehouses) since surely the pandemic for two years has raised the online markets vertically.

"The disease seems to have become a lesson" but even the developments that are currently underway do not seem to solve the problem that remains big in several European cities.

The Logistics sector in Greece today

Greece has recorded a decline in the global logistics market (42nd position LPI) according to data from the World Bank for 2018, however the latest figures unveil an improvement which seems to be reflected in the coming years. The Hellenic Society of Logistics mentions the above in the 5th Panhellenic Survey for the Supply Chain sector entitled: "Capture of the current situation and future trends in the Supply Chain sector in Greece".

According to the research, there are many companies that, having calculated the cost of Logistics in their total operating costs, have chosen the in-house model of operations and have succeeded to some extent, to have their relative sizes very close to those of 3PL companies.

At the same time, however, the percentage of outsourcing services is low compared to the European average, while transport / distribution and storage activities are the two main activities that companies outsource to third party logistics service providers.

From the research findings, it was also observed that the evolution of technology and the development of new systems has contributed to the increase of online services, while finally, the growing interest of logistics companies in the use of small and medium vehicles in order to increase both the speed as well as the flexibility of distributions within the city.

The impact of the pandemic and what's next

The majority of companies believe that the pandemic was the trigger for the better organization of the logistics circuit. In addition, it believes in the need to shift investment to areas that focus on new technologies and systems, with a strong emphasis on digital transformation.

Among the companies' immediate investment plans are investments in information systems, the reorganization of logistics processes and the training of employees. It is noted, however, that the shift of companies to e-commerce, with 40% of companies already active in e-commerce and another 40% being in the transition phase in the same direction. This development is expected to attract transport companies which, with the right incentives, will be able to modernize their outdated fleet and optimally support the distribution needs that are emerging.

In general, the messages of the research are optimistic since almost half of the participants see that there are many growth opportunities in the Greek logistics market. Certainly the COVID-19 pandemic was an accelerator for the launch of reorganization and modernization of the supply chain. The adoption of advanced technologies, the formulation of clear legislation regarding the licensing of KAD, the finding of investment funds, the harmonization of strategic plans with practices based on sustainable development and the finding of a specialized workforce, are the main pillars of the industry. After all, with about 200 thousand employees, the contribution of the sector to the national GDP is expected to reach 12% in the coming years.