The Alliance for European Logistics (AEL) is a one-of-a-kind industry coalition bringing together companies that provide and use logistics services in Europe. Launched in November 2008, AEL builds on the shared commitment of its members to enhance the logistics industry’s profile among European policymakers. The AEL collaborates closely with European institutions and stakeholders to raise awareness on the unique role that logistics play in helping the EU achieve its policy goals for 2030 and beyond.
The functioning of the logistics sector is the key to the functioning of the European economy. We connect the world. According to the 2018 Global Logistics Index published by the World Bank, eight out of the ten best-performing countries in the logistics sector worldwide are EU countries. Indeed, the EU has strong players contributing to the EU economy while also connecting Europe to growing markets. AEL members are active around the globe and therefore have a lot of first-hand experience with issues arise from running global businesses, namely trade barriers, etc.
Supply chain management (SCM) can be described as the active management of supply chain activities to maximize customer value and achieve a sustainable competitive advantage. It represents a conscious effort by the supply chain firms to develop and run supply chains in the most effective and efficient ways possible. Supply chain activities cover everything from product development, sourcing, production, and logistics, as well as the information systems needed to coordinate these activities.
Efficient supply chains are critical to trade flows. For example, they contribute to enhancing the quality of customer service while improving the competitiveness of the company. Furthermore, efficient supply chains help with reducing costs along with developing new services (e.g. added value services to manage logistics). In view of the ongoing development of the EU trade policy and the Green Deal priorities, AEL members outline below several key considerations from the logistics industry perspective.
Key trends in logistics and trade
As the global shift towards a low-carbon circular economy is underway, the logistics industry is becoming the frontrunner in many green services, technologies, and initiatives. Sustainability is a fundamental part of our industry’s transition. We are focusing our efforts on optimising the fleets and networks, introducing innovative technologies and developing green logistics solutions for customers and citizens. Digitalisation will also play a big role in that transition supporting the Internet of Things connectivity in the logistics sector and improving the efficiency of supply chains.
With the advance of e-commerce, one of the key trends impacting the logistics sector and global trade is the increased ability of companies, including SMEs, to reach customers across the globe, enabled by logistics’ services.
Furthermore, trade and logistics are impacted by the changing consumer behaviour of citizens through e-commerce, leading to an increase in the number of necessary delivery services. At the same time, consumers and end-users demand options for sustainable supply chains driving demand for multimodality and for sustainable alternative fuels use.
Increased drive towards globalization raises the demand for global supply chains. With this drive, the EU needs to step up its effort so as to become the global standards setter.
Finally, we witness a backlash against free trade. While some EU Member States demonstrate a protectionist approach towards free trade agreements negotiations, finding a balance on addressing public concerns along with Member States issues would be important for free trade in the future.
Global supply chains, the Internal Market and trade
Barriers to the Internal Market weaken the competitive position of European businesses in the global market place. A completion of the Internal Market by taking away intra-EU barriers helps European businesses to trade and compete globally.
One example of a barrier to the EU internal market level, with regard to supply chains, include the different rail packages which have not managed to resolve the many issues affecting cross-border rail due to the differences in service quality, power lines, change of drivers and infrastructure bottlenecks. Rail, however, has the biggest potential in terms of increasing efficiency and plays an important role for multimodal supply chain solutions.
In addition, the decarbonisation objectives should be reflected in supply chain management. For example, this can be achieved by the reduction of freight kms due to optimised planning and storage process and avoidance of empty transport moves to reduce CO2 emissions and environmental impact, removing restrictions on the road market, supporting the cross-border use of European Modular System (EMS) etc.
Key asks to EU policy-makers
In view of the new European Commission priorities development, AEL members would like to highlight the importance of seeing the logistics industry as the backbone of growth and prosperity in Europe. Every obstacle to logistics is an obstacle to growth and prosperity in Europe. If Europe wants to remain at the forefront of trade and logistics, it needs to continue investing in reliable and high-quality infrastructure to maintain its competitive edge and reinforce its role as an enabler of economic growth and job creation, while also incentivising a market drive to pave the way for the future.
AEL members consider that the following concrete measures shall support a competitive logistics sector that contributes to Europe’s 2030 and 2050 goals:
• Focusing on trade facilitation by addressing non-tariff and technical barriers by non-EU
countries and by the EU. More concretely, this can be done by improving the efficiency of
existing regulatory trade architecture, supporting new disruptive technologies and maintaining the momentum of trade liberalization. For the logistics’ sector, this should include seamless border processes. There is an opportunity to address this issue also in the WTO negotiations on e-commerce. For example, consumption taxes on low-value imported shipments should be collected away from the border and the processes should not discriminate between foreign and EU-based sellers. Any differentiated treatment would violate Article III of the GATT.
• Continue negotiating FTAs with substantial trading partners with important trade volumes. The EU has agreed trade deals with around 50 different countries. It is important to also obtain commitments for a cluster of services relevant for logistics such as warehousing, transport, ground handling, customs brokerage and delivery services.
• As part of the FTAs negotiations, it is important to promote free trade while ensuring effective reciprocity between EU and third countries companies to create a fair level playing field for European and non-European competitors. Sustainability remains an important topic that has to be considered in FTA negotiations.
• A good FTA deal with the UK post-Brexit shall avoid trade barriers both towards the EU and the UK.
• Ensure that the regulatory framework supports the competitive position of European market players in global markets to avoid that European businesses are put at a competitive
disadvantage vis-à-vis their non-EU competitors.