COVID-19 – crisis or catalyst? Live reports from international logistics innovators

Which survival strategies are helping logistics overcome the coronavirus crisis? On Kühne Logistics University’s Logistics Innovators Day on February 4 and 5, young and emerging logistics companies from the Americas, Africa, Asia and Europe shared their initial insights. Ca. 1,000 participants had registered for the event.

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“So far, the logistics sector has been one of the winners in the coronavirus crisis,” said Ludwig Hausmann, a partner at McKinsey & Company, in his opening address for KLU Logistics Innovators Day. “COVID-19 has accelerated the dynamics of startup financing.” As a result, the total financing for logistics in 2020 was 25 percent higher than in 2019.

A closer look at Europe

Johannes Berg from Hamburg-based Digital Hub Logistics confirmed this positive impression during the opening discussion. Admittedly, some medium-sized enterprises encountered problems in the form of budget freezes and some hesitation on the part of customers. But most large startups with solid partners, he claimed, are in good shape. Moreover: “As the crisis progressed, we received more and more reports on brand-new startups that wanted to seize the opportunity to win over small and medium-sized enterprises to new technologies.”

Hendrik Bender from Sovereign Speed also had good news to share: “All of the startups we work with at HAUS61, our logistics startup lab, have a digital backbone, allowing them to rapidly adapt to new challenges.” In fact, the crisis might even provide new momentum for the European startup sector. Steffen Wagner from KPMG pointed out the fundamental differences from the Asian-Chinese market. “In Europe, it’s more about making innovations in the business model, whereas in Asian markets, given the enormous potential for growth, even speculative considerations are often important.”

Companies from South America, Africa and Asia

Modern Logistics (Brazil) is the only company of its kind in Brazil: with its own, fully integrated air transport service, it has specialized in the long-range transport and storage of time-sensitive products. At first blush, that sounds like an analog business model, yet from the outset, all systems were set up digitally and cloud-based. Consequently, according to company data, in March 2020 it was possible for all administrative employees to begin working from home, while the pilots began working in fixed, rotating teams.

The logistics platforms Little Ride (Kenya) and Kobo360 (Nigeria) have weathered the storm just as well. Little Ride, a sort of “Uber” for Africa, focused on intensive staff training, process optimization and Big Data. “Data can make the invisible visible, making us aware of trends we can capitalize on for our business. In keeping with the motto ‘How to make a trend your friend?’, innovation isn’t limited to any one continent; it can take place anywhere on the planet,” says Ashish Kukreti, COO.

Another company banking on digitalization: Kobe360, which offers a digital logistics platform for efficient supply chains. As the crisis set in, the company intensified its support for customers’ digital adaptation in order to come through these difficult times. But at the end of the day, the goal remains the same: goods have to keep flowing. 

Several companies reported that customer behavior changed during the crisis. Amol Shah, COO of FreightTiger from India: "The pandemic highlighted inefficiencies in the supply chain, triggering a fundamental shift in the industry. Companies now view technology investments in their supply chain as must-have, not just nice-to-have." Technology-enabled logistics has allowed companies to improve customer service and gain market share." An observation shared by German company InstaFreight: "Suddenly, everything had to be fast. Customers started investing in digital technologies," reports Maximilian Schäfer, Co-Founder.

Considerable interest in young logistics companies

Ca. 1,000 participants from around the globe, including students, researchers and practitioners, registered for KLU Logistics Innovators Day. According to Academic Director and KLU Professor Hanno Friedrich: “We couldn’t be happier with the response to our new format. I was especially pleased to see that we drew innovators from virtually every corner of the world as contributors.”

The Logistics Innovators Day is the only event of its kind for the logistics industry offered at a German university, and is guided by the motto: “Instead of talking about innovation, let’s talk with actual innovators.” To a substantial extent, KLU students helped organize the event.

KMPG, HAUS61 and Sovereign Speed supported the event as valued partners.

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