Part 4. What is the last ‘blue ocean’ of global logistics?

Sufficient population and market size “will open a new logistics market”
Currently, the center of the global logistics market is North America, Europe and Asia, such as China. However, in order to achieve the goal of establishing a global network, large logistics companies are hurriedly setting up bases in other regions, although not yet in large markets, and are expanding their influence. Representative regions include Oceania centered around Australia, Central and South America such as Brazil and Argentina, and the unexplored land of Africa.

The Oceania market, which cannot be ignored, especially the Australian logistics market, is changing rapidly since Corona 19. This is the fastest growing e-commerce market. More than 900,000 households in Australia are new to online shopping for the first time in 2020, according to data released by Korea’s agro-fisheries and food trade corporation (aT). The size of the Australian e-commerce market could not be greater compared to even the larger global markets. However, a large population, a large continent and a high level of infrastructure already in place can predict the Australian e-commerce market to grow rapidly. An industry official explained: “In fact, the various logistics routes connecting other continents and Oceania, particularly Australia, are receiving a lot of attention.

The Latin American market is also one of the logistics markets that is attracting new attention. Central and South America, with major markets such as Brazil and Argentina, have been hit hard by Covid-19, but efforts are being made to address the problem through large-scale infrastructure expansion at the national level. In the center is the railway infrastructure. In Central and South America, various rail infrastructure construction projects have recently been underway, which experts say have the potential to create a new logistics market. An industry expert said, “It is true that the logistics market has not been significantly implemented in the South Central region compared to other regions due to lack of infrastructure. It is a very advanced region,” he said. The African market is still unknown. Of course, large global companies are located one after the other, but due to the lack of infrastructure, there has not yet been a more massive introduction of logistics services as on many continents. However, the global logistics industry recognizes Africa as a potential country and is working hard to build a logistics network by establishing a joint venture.

Which companies have entered Oceania, Latin America and Africa?

Hyundai Clovis – Brazil / Australia
At the beginning of 2010, Hyundai Clovis founded a company in Brazil and enthusiastically entered the Latin American market. And in 2015, it established itself as one of the main logistics companies in the country and successfully entered the market. Above all, constant interaction with local employees has played a key role in the success of Hyundai Clovis. Hyundai Clovis continues its efforts last year by reaching an agreement with labor and management at its Brazilian subsidiary. In addition, Hyundai Clovis strengthened its global competitiveness by successfully signing a long-term transportation contract with Australian energy company Woodside in April this year. Under the agreement, Hyundai Glovis, which has a role in transporting LNG produced in Australia to global consumers, will be able to further strengthen its global network, starting with the Oceania market.

LX Pantos – Brazil / Argentina
LX Pantos enters the Latin American logistics market, establishing companies mainly in Brazil and Argentina. LX Pantos Brasil, founded in June 2007, has been competitive in the local market for almost 15 years. The Pantos Argentina branch, founded relatively late at the beginning of 2017, is gradually expanding its influence in the unknown Latin American market based on comprehensive global logistics services. An official from LX Pantos explained: “Although lagging a bit in terms of sales, the Latin American market is definitely an attractive market in terms of its future potential.”

Chelogistics – Africa
Logistics companies are still exploring uncharted territory in Africa. The representative company is Sepological Logistics, a global logistics company. In 2020, SeverLogistics enthusiastically entered the African logistics market, securing stakes in leading logistics companies in Egypt and Ethiopia. In particular, it was of great importance to Egypt as it was able to create a multimodal transport service centered in the capital city of Cairo. Then last month, it also bought a Swiss freight forwarder with around 24 logistics locations in Africa, accelerating its push into the African logistics market.

What other companies are exploring the new market?
Strengthening the logistics industry by diversifying logistics business lines, Musk is also aggressively attacking the hidden logistics market. Musk has leveraged its logistics capabilities with bases in Central and South America centered on Brazil and Argentina. In addition, it is expanding its influence in Africa by establishing footholds in South Africa and elsewhere. FedEx, an international logistics company, is taking a similar step. FedEx is developing logistics services in Central and South America and Africa with hubs in South Africa, Brazil, etc. National companies are also looking for your interest in these areas. The companies that have opened their locations in Africa stand out in particular. Logis Valley HTNS is strengthening its logistics capabilities with a base in South Africa, and CJ Korea Express has also established bases in Uganda, Kenya and Zambia.