Why is the endogenous growth stagnation widespread in the supply chain logistics industry?

The leading DPDHL and the third-ranked Kuhne & Nagel both fell into a 12-year stagnation period after a surge in size in 2006.

The growth period is synchronized with the M&A period. The development of the supply chain logistics industry depends on M&A. After combing the three mergers and acquisitions, the three companies have a proliferating period of active mergers and acquisitions. The world's second-largest US XPO's revenue has surged from 1.3 billion yuan in 2014 to 40 billion yuan in 2018, mainly relying on mergers and acquisitions. Both DHL and Kuhne & Nagel entered the low tide of mergers and acquisitions after 2006, during which time they were two stagnation periods.

1. Supply chain logistics business model: to solve the "what" or "how to transport" service

Logistics mainly involves two issues: “what to transport” and “how to transport”. Express, express and other services are only responsible for executing customer decisions, while supply chain logistics needs to help customers decide whether to “go what” or “how to”. Supply chain logistics is a very broad concept. Any service that involves helping customers solve logistics decisions or decisions plus execution can be called supply chain logistics services.

Supply chain logistics involves decision-making and needs to understand and transform customers. Therefore, the project system or contract system is generally adopted. With reference to XPO, the contract signing period is generally 5 years. The long-term cooperation mode has high conversion costs, so the customer renewal rate is also high, basically over 80%.

2. Supply chain logistics business model: profit by improving the logistics efficiency of B-side large customers

The supply chain logistics industry mainly serves the B-end customers with complex industrial chains. Customers are mainly concentrated in the four industries of consumer, automotive, electronics and biomedicine. And the concentration of large customers is high. For example, in 2018, XPO (second in the world) has more than 50,000 customers, and the top five customers contributed 11% of revenue; in 2008, CEVA (fourth in the world) customers more than 15,000, the top five customers contributed Revenue accounts for 18%.

From the perspective of enterprises, supply chain logistics can be divided into: procurement → production → sales → reverse. The front end of the supply chain involves key links such as company plan management. Large enterprises generally choose to design independently. Sales and reverse link logistics design are more open to the outside world, but supply chain logistics service providers selected in different regions are not the same. Therefore, the supply chain logistics company generally undertakes the logistics decision-making and execution of certain links in a certain area of a large customer, and is more prone to the regional oligarchs.

Reprinted from the network