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The supply chain is evolving, with sectors such as eCommerce increasing the need for faster, more cost-effective and reliable freight deliveries, and factors including rising transport costs and global complexities coming into play
AUSTRALIA, 10 April 2013 – The role of the supply chain is taking on growing importance and sophistication in businesses, with a focus on increased cost efficiencies and consumer demand set to transform the way companies operate their supply chain functions.
According to Jones Lang LaSalle’s Rich Thompson, Managing Director for the global Supply Chain & Logistics Solutions team, the supply chain is evolving due to factors including rising freight costs, eCommerce challenges and global complexities, with companies moving operations closer to the customer in response – even if this means paying more in real estate.
Mr. Thompson said transportation can account for as much as 50% of total operating costs for companies – making it a key focus for businesses seeking cost efficiencies, and driving operational decisions. “Freight costs are expected to continue to trend up based on numerous influences – oil prices are only one factor. Increasing transportation costs will drive companies to re-evaluate their supply chain networks, and will propel interest in alternative, lower costs modes of transportation – including intermodal, rail and water.”
Mr Thompson said diversification strategies are becoming more prevalent to mitigate risk from supply chain threats such as natural disasters and to be closer to the customer to meet demand for faster delivery times – particularly with the rise of eCommerce.
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