“What are the main problems faced by the logistics industry?” According to the answers given to the question, the most basic problems were stated as “Lack of Strategic Plan (53%)”, “Price-Oriented Competition (47%)” and “Qualified Human Resources (42%)”.
In the survey conducted for this Research, “What is the level of competition in the sector according to 4 basic factors (price, quality, service speed, service diversity)?” According to the answers given to the question “price” (87%)” competition, “high” is specified, “quality (53.33%)”, “service speed (51%)” and “service variety” (58%) competition, “medium” specified as.
As it can be understood from the answers given to these two questions, the only competition in the logistics sector is “price” competition, and companies do not make much effort for “better quality” or “faster” or “diversity of services” (?).
In my opinion, the two most interesting data in this Research are “What are the main problems facing the logistics industry?” “Lack of Value-Added Services (13%)” and “Innovation (16%)” given to the question.
Why is it interesting?
Because %22Lack of Value-Added Services%22 and %22Innovation%22, which are not seen as many %22problems%22 in fact, can be the solution to the above %22fundamental problems%22.
Why do companies compete only on %22price%22 and not or cannot compete for %22quality of service%22 or %22speed of service%22 or %22diversity of service%22?
Competition for “quality of service” or “speed of service” or “diversity of service” other than price; It is difficult, requires hard work and is done with qualified people.
Countries, like companies, are in competition. The situation of countries is compared (competitively) with other countries through indices prepared by internationally recognized institutions.
According to the World Bank’s Logistics Performance Index (LPI) 2018 results, Turkey is losing its place in the world logistics league. Turkey, which was 34th in LPI 2016, dropped to 47th in LPI 2018. The most important reasons for this 13 place loss; “Human Resources”, “Competence” and “Service Quality”.
The quality of logistics is an important determinant of international trade, and an improved logistics can provide more foreign trade. According to the study “The World Bank’s LPI and Drivers of Logistics Performance (Lauri OJALA, Dilay Çelebi, https://www.itf-oecd.org/sites/default/files/docs/ojala.pdf )”, every 10% in the LPI score An increase of 1% could increase the country’s foreign trade (imports, exports) by up to 69% (other trade-related things being equal). Had Turkey’s LPI score been the same as Malaysia, which is at the «upper-middle income» level, Turkey’s imports could increase by 14% and exports by 18%. Had Turkey’s LPI score been the same as in «high income» OECD countries, Turkey’s imports would have increased by 31% and exports by 40%. If Turkey aims at the top positions in global competition, it should make significant improvements in the weaknesses that are evident in LPI 2018.
The average profitability (VÖK/Net Sales) is very low (2,80%) if only the logistics companies that make domestic “goods movement” except the PTT in the Fortune 500 (Turkey) list are taken as a basis. I think the main reason for this is that there is only %22price%22-oriented competition. Firms should either improve their costs or offer a nuance. Otherwise, how long can this be sustained with very low profitability?
Price competition can only be achieved by %22improving%22 the factors affecting the cost.
The %22improvement%22 of cost is achieved only by %22quality of service%22.
“Service quality” is ensured by employees who actually perform that service and “companies” who truly believe in “service quality” and their “bosses” and “managers”.
Between us, %22quality of service%22 requires a lot of effort and, more importantly, %22culture%22.
Therefore, companies prefer to say %22I can do it cheaper%22 by choosing the easy and effortless one, but lower the %22price%22 without making %22improvement%22.
After? Every choice is a renunciation!
“Lack of Strategic Plan”! Let this be a separate post.