DHL: The future of global supply chains lies in a flexible, sustainable and diversified structure
DHL Global Forwarding, the air and ocean freight specialist of DHL Group, has published a white paper entitled “China Plus X: The New Global Supply Chain“.
The report highlights the growing importance of multi-shoring strategies that go beyond the classic “China Plus 1” approach and focus on diversifying production and sourcing locations across multiple countries. In this way, companies can make their supply chains more resilient to global disruptions and strengthen their operational agility.
In recent years, geopolitical tensions, trade barriers and events such as the coronavirus pandemic have highlighted how fragile supply chains can be. The white paper highlights several countries in Southeast Asia, Southern and Eastern Europe, and the Middle East and South America as possible strategic alternatives and complements to China. These countries are not only investing in their infrastructure, but also offer an increasingly trade-friendly regulatory environment.
“The future of global supply chains lies in a flexible, sustainable and diversified structure designed for resilience. DHL Global Forwarding supports companies with a unique global network and local expertise to successfully shape this transformation. With our extensive portfolio of logistics and transportation solutions, we provide our customers with the tools they need to realize their ‘Plus X’ strategy and focus on long-term stability,” said Niki Frank, CEO of DHL Global Forwarding Asia Pacific.
Five important factors for the successful implementation of a ‘Plus X’ strategy
The white paper outlines five key criteria that play a crucial role in selecting suitable production and supply chain locations. Robust transport infrastructure is crucial as it includes the capacity, quality and transit times that are essential for efficient logistics. Countries such as Vietnam and Mexico are investing significantly in their transport networks, which form the backbone of their supply chains. In addition, a comprehensive analysis of the cost structure is essential; this includes evaluating the logistics costs, labor costs, and total return on investment (ROI) associated with relocating production to a specific country. Likewise, the quality of a country’s infrastructure – both digital and physical – plays a crucial role in this assessment. This involves things like broadband capacity, available transport facilities and expected developments such as new airports or railway lines, which can be important for alternative procurement strategies. The availability of skilled labor is another important factor. Countries such as India, for example, are investing in training programs to train skilled workers for future industries such as semiconductor manufacturing. Finally, a good understanding of the regulatory environment is also indispensable. These include factors such as taxes, tariffs, and trade agreements, which can have a significant impact on costs and operational efficiency. Emerging ‘Plus X’ countries are actively seeking to create favourable trade relations, providing increasingly trade-friendly environments to attract foreign investment. In this context, a long-term commitment to these sites is important, as establishing a diversified production base often requires significant upfront investment.
Strong partner for complex supply chains
With its comprehensive service portfolio, DHL Global Forwarding supports companies in making their supply chains not only efficient, but also future-proof. These include multimodal transport solutions that combine the advantages of different modes of transport. For example, companies can reduce costs and optimize delivery times by combining ocean and air freight.
In addition, DHL Global Forwarding offers specialized consulting services to help companies develop their “Plus X” strategies. These range from assessments of transport capacities in potential destination countries to analyses of regulatory requirements and optimisation of warehouse and distribution networks. Thanks to a global network in over 220 countries and territories and teams with local expertise, DHL can develop tailor-made solutions tailored to the individual needs of companies.
Another particular strength of DHL Global Forwarding is the use of innovative technologies to improve transparency and efficiency. Through digital platforms such as myDHLi, the company offers its customers real-time information about their supply chain, seamless shipment tracking and more efficient process control. This combination of technology and expertise makes DHL an indispensable partner for companies looking to diversify and strengthen their supply chains.
