Executive Briefings

Kraft's Cadbury Purchase Highlights Logistics Trends

Kraft's takeover of Cadbury is part of a larger trend on the part of fast-moving consumer goods (FMCG) companies to create logistics structures that can reach customers in every market across the world, according to Thomas Cullen of  Transport Intelligence, a provider of market intelligence for the transportation and logistics sectors.

Given the cost-cutting measures already undertaken at both companies, the potential for achieving major reductions in the logistics area are limited. However, Cullen says, given the savings the company expects to realize, Kraft will be rapidly looking for aggressive consolidation in logistics operations.

On the "upside", it appears that the new-look Kraft will be wanting to expand its presence worldwide, creating a demand for new FMCG logistics capability in both established and emerging markets and providing opportunities for new logistics business. The global nature of the expansion of Kraft and other FMCG companies, however, indicates they will be looking for logistics partners with global reach and sophisticated capabilities. "That suggests many smaller LSPs  will be squeezed, while the big leading LSPs, such as CEVA and DHL, will benefit," says Cullen. 

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Kraft's takeover of Cadbury is part of a larger trend on the part of fast-moving consumer goods (FMCG) companies to create logistics structures that can reach customers in every market across the world, according to Thomas Cullen of  Transport Intelligence, a provider of market intelligence for the transportation and logistics sectors.

Given the cost-cutting measures already undertaken at both companies, the potential for achieving major reductions in the logistics area are limited. However, Cullen says, given the savings the company expects to realize, Kraft will be rapidly looking for aggressive consolidation in logistics operations.

On the "upside", it appears that the new-look Kraft will be wanting to expand its presence worldwide, creating a demand for new FMCG logistics capability in both established and emerging markets and providing opportunities for new logistics business. The global nature of the expansion of Kraft and other FMCG companies, however, indicates they will be looking for logistics partners with global reach and sophisticated capabilities. "That suggests many smaller LSPs  will be squeezed, while the big leading LSPs, such as CEVA and DHL, will benefit," says Cullen. 

Read Full Article