1 00:00:02,920 --> 00:00:09,280 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Let's get the boots 2 00:00:09,320 --> 00:00:12,280 Speaker 1: on the ground view of disruptions in global supply chains, 3 00:00:12,320 --> 00:00:14,360 Speaker 1: because here with us now pleased to say we have 4 00:00:14,400 --> 00:00:18,919 Speaker 1: Oscar to bok DHL supply chain. CEO Oscar, it's great 5 00:00:18,920 --> 00:00:22,400 Speaker 1: to have you with me. So not commenting specifically on 6 00:00:22,440 --> 00:00:24,640 Speaker 1: what's going on in ocean and air, which I know 7 00:00:24,640 --> 00:00:26,840 Speaker 1: that you're not involved in, but what has the spillover 8 00:00:27,240 --> 00:00:29,480 Speaker 1: been from the Red Sea to your business? 9 00:00:31,680 --> 00:00:34,400 Speaker 2: Yeah, I think what it actually have the impact that 10 00:00:34,440 --> 00:00:36,880 Speaker 2: it has. We managed to supply chain for our customers 11 00:00:37,040 --> 00:00:40,199 Speaker 2: and obviously what you see is there we need to 12 00:00:40,200 --> 00:00:42,960 Speaker 2: help our customers to find alternative ways to get the 13 00:00:43,000 --> 00:00:45,920 Speaker 2: goods to the market. And one hand you have obviously 14 00:00:46,040 --> 00:00:50,040 Speaker 2: the delays because of the way ship sailing. But on 15 00:00:50,080 --> 00:00:52,080 Speaker 2: the other hands you need to find different modes of 16 00:00:52,080 --> 00:00:54,880 Speaker 2: transport and some customers we move to air freight, some 17 00:00:54,920 --> 00:00:58,120 Speaker 2: customers we actually move into the combination of intermodel and 18 00:00:58,200 --> 00:01:02,280 Speaker 2: chips and there's various modes that we have to find. 19 00:01:02,360 --> 00:01:05,320 Speaker 2: At the same time, we have to also, together with 20 00:01:05,319 --> 00:01:09,200 Speaker 2: our customers, really look at how you store. So that's 21 00:01:09,200 --> 00:01:13,319 Speaker 2: another element. But I think overall, what it really reconfirms 22 00:01:13,360 --> 00:01:16,759 Speaker 2: once more. Is a point that I often make, which 23 00:01:16,800 --> 00:01:19,600 Speaker 2: is what I call need sourcing, which basically means that 24 00:01:19,720 --> 00:01:22,399 Speaker 2: when you look at global supply chains since the past 25 00:01:22,840 --> 00:01:26,360 Speaker 2: three four years, companies and many of our customers have 26 00:01:26,440 --> 00:01:29,280 Speaker 2: to rethink on how you organize your supply chain and 27 00:01:29,319 --> 00:01:33,600 Speaker 2: you can't simply base it on one point of source 28 00:01:34,000 --> 00:01:36,600 Speaker 2: for a strategic part or product. You have to have 29 00:01:36,640 --> 00:01:39,080 Speaker 2: more source points. And that's actually what you see happening 30 00:01:39,120 --> 00:01:42,280 Speaker 2: at the moment in the overall supply chain market. 31 00:01:42,560 --> 00:01:44,480 Speaker 1: Well, I definitely want to get to that topic of 32 00:01:44,600 --> 00:01:48,600 Speaker 1: near storing, adding multiple of course sources there. Like you say, 33 00:01:48,640 --> 00:01:50,160 Speaker 1: but when it comes to the red seat, you talk 34 00:01:50,160 --> 00:01:53,600 Speaker 1: about the contingency plan that your customers are putting in place. 35 00:01:54,080 --> 00:01:56,880 Speaker 1: How long are they preparing for when it comes to 36 00:01:56,920 --> 00:01:59,880 Speaker 1: this turmoil, what is the base case that they're baking 37 00:02:00,040 --> 00:02:01,480 Speaker 1: and for how long this could last? 38 00:02:03,720 --> 00:02:05,880 Speaker 2: Yeah, it's a lot of guests work. But I think, 39 00:02:06,520 --> 00:02:09,519 Speaker 2: and that's the main point I think with managing supply 40 00:02:09,639 --> 00:02:12,640 Speaker 2: chains in today's world is you have to work with 41 00:02:12,720 --> 00:02:16,560 Speaker 2: various scenarios. You have to create an agile and flexible 42 00:02:16,560 --> 00:02:20,679 Speaker 2: solution because there's theories that this will take for a 43 00:02:20,760 --> 00:02:23,800 Speaker 2: longer time. There's ways where you can say, well, maybe 44 00:02:23,919 --> 00:02:27,079 Speaker 2: for a part, I need to have alternative modes of transport, 45 00:02:27,120 --> 00:02:31,000 Speaker 2: like I was mentioning earlier, going for intermodel, et cetera. 46 00:02:31,960 --> 00:02:34,680 Speaker 2: So for how long they perceive that this is going 47 00:02:34,760 --> 00:02:37,720 Speaker 2: to take. Many of our customers think that this is 48 00:02:37,919 --> 00:02:40,160 Speaker 2: for quite a while still there, and at least you 49 00:02:40,160 --> 00:02:42,360 Speaker 2: have to plan accordingly, so not in order not to 50 00:02:42,400 --> 00:02:45,880 Speaker 2: fall short on stock in the near season, in near 51 00:02:45,880 --> 00:02:48,400 Speaker 2: e in the upcoming seasons, because if you make a 52 00:02:48,440 --> 00:02:51,800 Speaker 2: simple count, it takes ten days extra as you know, 53 00:02:52,440 --> 00:02:56,840 Speaker 2: to with the present route around the gape. That actually 54 00:02:56,840 --> 00:03:00,280 Speaker 2: means that you have to up your stock levels to 55 00:03:00,280 --> 00:03:02,720 Speaker 2: cope with that. So that is something that you now 56 00:03:02,760 --> 00:03:05,200 Speaker 2: need to plan a hand, or you say, well, if 57 00:03:05,200 --> 00:03:07,440 Speaker 2: I take that part part of it, I might actually 58 00:03:07,520 --> 00:03:11,880 Speaker 2: use alternative ways of transport in order to cover that part. Now, 59 00:03:11,960 --> 00:03:14,760 Speaker 2: that depends very much on the type of products and 60 00:03:14,800 --> 00:03:17,760 Speaker 2: the type of sectors I read this morning, and even 61 00:03:17,800 --> 00:03:21,040 Speaker 2: in the fashion sector from Bangladesh, you see more flights 62 00:03:21,080 --> 00:03:24,160 Speaker 2: out now actually in order to cover the air freight, 63 00:03:24,200 --> 00:03:27,240 Speaker 2: which is obviously not a solution you would normally think of. 64 00:03:27,680 --> 00:03:30,480 Speaker 2: So you see that there's various alternatives that are being 65 00:03:30,919 --> 00:03:34,760 Speaker 2: used by our customers at the moment to find solutions 66 00:03:34,800 --> 00:03:37,640 Speaker 2: both for the very short term but also look at 67 00:03:37,640 --> 00:03:40,160 Speaker 2: the mid and the long term to have a sustainable 68 00:03:40,200 --> 00:03:43,840 Speaker 2: solution that can also cover what's next to come in 69 00:03:43,920 --> 00:03:44,880 Speaker 2: supply tin disruption. 70 00:03:45,320 --> 00:03:46,960 Speaker 1: Well, like you said, a lot of guestswork there, but 71 00:03:47,040 --> 00:03:50,520 Speaker 1: obviously with some big important implications when it comes to 72 00:03:50,600 --> 00:03:52,839 Speaker 1: bottom lines. Let's also talk a little bit more though 73 00:03:52,920 --> 00:03:56,119 Speaker 1: about near shoring and of course that trend, Like you said, 74 00:03:56,160 --> 00:03:59,560 Speaker 1: a lot of companies looking for different points to which 75 00:04:00,080 --> 00:04:03,800 Speaker 1: they can source from what countries, what regions have been 76 00:04:03,880 --> 00:04:05,520 Speaker 1: the biggest beneficiary of that. 77 00:04:07,560 --> 00:04:09,400 Speaker 2: Yeah, you see a lot of and I always call 78 00:04:09,440 --> 00:04:11,040 Speaker 2: it in south near shore and are called it omni 79 00:04:11,120 --> 00:04:14,520 Speaker 2: shoreing only sourcing because many of our customers would make 80 00:04:14,560 --> 00:04:16,960 Speaker 2: sure that they don't gamble on one point, but at 81 00:04:16,960 --> 00:04:19,720 Speaker 2: more than one point to always help alternatives. But to 82 00:04:19,720 --> 00:04:22,320 Speaker 2: answer your question on which geographies do we see that 83 00:04:22,440 --> 00:04:25,159 Speaker 2: most or not, obviously we very much see it in 84 00:04:25,200 --> 00:04:28,480 Speaker 2: Mexico if you look at the even yesterday we opened 85 00:04:28,520 --> 00:04:31,080 Speaker 2: a large new facility at least we break ground on 86 00:04:31,120 --> 00:04:33,680 Speaker 2: a large new facility in Mexico, and it's one of 87 00:04:33,760 --> 00:04:36,960 Speaker 2: many of which we see a lot of take obviously 88 00:04:37,160 --> 00:04:41,039 Speaker 2: many investments that go in that direction. But apart from Mexico, 89 00:04:41,160 --> 00:04:44,400 Speaker 2: you also see big investments going in countries like Malaysia, 90 00:04:45,160 --> 00:04:47,880 Speaker 2: where you see specific on the semicon industry, you see 91 00:04:48,040 --> 00:04:50,760 Speaker 2: major investments going to that direction. We see a lot 92 00:04:50,800 --> 00:04:55,240 Speaker 2: of things happening in Vietnam, but also a market like 93 00:04:55,279 --> 00:05:00,360 Speaker 2: India is fast changing it's trade similar to what see in. 94 00:05:00,279 --> 00:05:03,480 Speaker 1: Brazil, and I will do also want to talk about China. 95 00:05:03,480 --> 00:05:06,719 Speaker 1: Of course, China also looming large in this conversation around 96 00:05:06,720 --> 00:05:09,039 Speaker 1: supply chains and so far this earning season. 97 00:05:09,040 --> 00:05:09,800 Speaker 2: I mean, just today we. 98 00:05:09,839 --> 00:05:13,720 Speaker 1: Heard from Loriol talking about sluggish demand from Chinese consumers. 99 00:05:14,120 --> 00:05:18,560 Speaker 1: How are you seeing China's sluggish economy, sluggish recovery turning 100 00:05:18,600 --> 00:05:19,400 Speaker 1: up in your business? 101 00:05:21,080 --> 00:05:24,159 Speaker 2: Yeah, I think, I think China obviously, but for us 102 00:05:24,720 --> 00:05:27,120 Speaker 2: it is very much about helping our customers to find 103 00:05:27,120 --> 00:05:30,760 Speaker 2: a solution. And but obviously you see that the volumes 104 00:05:30,760 --> 00:05:33,200 Speaker 2: are different from what the what they used to be. 105 00:05:34,080 --> 00:05:36,440 Speaker 2: But on the other hand, the Chinese economy remains a 106 00:05:36,560 --> 00:05:41,839 Speaker 2: very important one, so so therefore our customers remain very 107 00:05:41,920 --> 00:05:44,600 Speaker 2: much focused on China. But indeed there is a bit 108 00:05:44,640 --> 00:05:46,520 Speaker 2: of also there a bit of guests work on how 109 00:05:46,560 --> 00:05:48,760 Speaker 2: fast will that will let catch up. We're going to 110 00:05:48,800 --> 00:05:50,560 Speaker 2: see it a little bit after after this week of 111 00:05:50,640 --> 00:05:53,120 Speaker 2: the Chinese New Year. How how then the volumes are 112 00:05:53,120 --> 00:05:55,479 Speaker 2: going to be over there? So it is, it is 113 00:05:55,520 --> 00:05:59,400 Speaker 2: also there. It is you have to balance it between 114 00:05:59,640 --> 00:06:02,640 Speaker 2: the mid term view and what's happening today and yesterday. 115 00:06:02,680 --> 00:06:04,480 Speaker 2: And I think that's very much what's happening at the 116 00:06:04,480 --> 00:06:08,000 Speaker 2: moment because it remains a very important market. You need 117 00:06:08,080 --> 00:06:10,040 Speaker 2: to be ready, you need to be there, you need 118 00:06:10,040 --> 00:06:11,920 Speaker 2: to continue to invest in that market, and that's what 119 00:06:11,960 --> 00:06:14,880 Speaker 2: you see our customers are doing. But it is a 120 00:06:14,880 --> 00:06:17,320 Speaker 2: bit of patience on what is really happening on the 121 00:06:17,360 --> 00:06:18,120 Speaker 2: short term there. 122 00:06:18,279 --> 00:06:22,159 Speaker 1: Absolutely, Yeah, that's a conversation that companies across industries are 123 00:06:22,200 --> 00:06:24,960 Speaker 1: having right now. I do want to talk about warehouses. 124 00:06:25,000 --> 00:06:26,719 Speaker 1: Of course, I don't need to tell you that the 125 00:06:26,760 --> 00:06:30,440 Speaker 1: real estate market for warehouse properties it was extremely tight 126 00:06:30,520 --> 00:06:33,240 Speaker 1: during the pandemic. Where do we stand now, both when 127 00:06:33,279 --> 00:06:36,200 Speaker 1: it comes to prices and availability of some of those properties. 128 00:06:38,040 --> 00:06:40,440 Speaker 2: Yeah, you see an interesting development in a really state 129 00:06:40,520 --> 00:06:45,760 Speaker 2: because you see that there's less volume being developed at 130 00:06:45,760 --> 00:06:49,600 Speaker 2: the moment, and so while at the same time complexities 131 00:06:49,640 --> 00:06:54,200 Speaker 2: of supply chains continues to evolve, so we're fast therefore 132 00:06:54,240 --> 00:06:58,040 Speaker 2: heading towards scarcity of capacity. And also they are still 133 00:06:58,800 --> 00:07:03,680 Speaker 2: pretty soon for instance, why we continue to make our 134 00:07:03,720 --> 00:07:08,520 Speaker 2: investments in specifically logistics real estate, and also because there's 135 00:07:08,640 --> 00:07:11,600 Speaker 2: more and more requirements to go closer to the end consumer. 136 00:07:12,640 --> 00:07:16,880 Speaker 2: So therefore the whole profile of where warehouses and logistics 137 00:07:16,920 --> 00:07:19,440 Speaker 2: centers or fulfillment centers, whatever name you want to give it, 138 00:07:19,480 --> 00:07:21,560 Speaker 2: but where they where they need to be. They need 139 00:07:21,560 --> 00:07:24,960 Speaker 2: to be more and more closer to urban areas. So 140 00:07:25,520 --> 00:07:28,800 Speaker 2: there's two trends. On the one, end less development happening 141 00:07:28,800 --> 00:07:31,120 Speaker 2: at the moment, which means that there is an indication 142 00:07:31,320 --> 00:07:34,800 Speaker 2: of scarcity coming up. And at the same time, there's 143 00:07:34,800 --> 00:07:38,400 Speaker 2: different locations where actually logistics centers are needed because of 144 00:07:38,560 --> 00:07:40,880 Speaker 2: specifical If I look at the US market, because we 145 00:07:40,920 --> 00:07:43,560 Speaker 2: need to be closer to the end consumer and. 146 00:07:43,560 --> 00:07:47,280 Speaker 1: Oscar just quickly here, what about wages our our work 147 00:07:47,720 --> 00:07:50,360 Speaker 1: warehouse rather worker wages still going up? 148 00:07:52,760 --> 00:07:55,440 Speaker 2: Yeah, you've seen obviously. I think I think we had 149 00:07:55,440 --> 00:07:59,160 Speaker 2: the biggest part of that season because over the past 150 00:07:59,360 --> 00:08:04,200 Speaker 2: two years, the major scarcity in labor that is settling 151 00:08:04,240 --> 00:08:06,400 Speaker 2: in at the moment, so that is sort of stabilizing 152 00:08:07,120 --> 00:08:09,760 Speaker 2: more on that perspective, I think the biggest hurdle on 153 00:08:09,800 --> 00:08:13,640 Speaker 2: that one we've seen already. But I think on the 154 00:08:13,720 --> 00:08:16,760 Speaker 2: other hand, it remains always a challenge with availability, and 155 00:08:16,800 --> 00:08:19,320 Speaker 2: that's where I think you also see the balance between 156 00:08:20,840 --> 00:08:26,880 Speaker 2: staffing and robotic solutions, digital collaborative robotic solutions, and we 157 00:08:26,920 --> 00:08:31,200 Speaker 2: if I take for instance ourselves last high season, we 158 00:08:31,240 --> 00:08:36,240 Speaker 2: had investment in less number of people while we were 159 00:08:36,280 --> 00:08:39,440 Speaker 2: doing similar volumes, but because of the investments in robotic 160 00:08:39,520 --> 00:08:43,640 Speaker 2: solutions that we've done there, so you see the collaborative 161 00:08:43,760 --> 00:08:46,920 Speaker 2: robotics is also helping out on the scarcity of labor. 162 00:08:47,120 --> 00:08:49,120 Speaker 2: And at the same time, the labor market is sort 163 00:08:49,160 --> 00:08:53,120 Speaker 2: of settling in so that pressure is getting less. 164 00:08:53,280 --> 00:08:55,080 Speaker 1: Well, we're going to have to have a bigger conversation 165 00:08:55,200 --> 00:08:58,360 Speaker 1: on that relationship, hopefully soon. Oscar really enjoyed this. That 166 00:08:58,480 --> 00:09:01,720 Speaker 1: of course, is Oscar the box of DHL supply chain.