We have moved from a three F’s crisis (Finance, Fuel and Food) that was stoking inflation to a panic that is driving a fall in prices for all three – opening up the threat of deflation. For example, in four months the price of oil has fallen $100 in four months to $50 a barrel. This is bad news for those producing countries with a high percentage of suppliers based in the local informal economy.

And yet, with population growth from 6 to 9 billion by 2050 in store, shortages will not go away. Several countries who are resource-poor are setting up deals with less developed countries to secure their long term fuel and food security. For example, African countries lack capital and technical expertise to harness natural resources and their partners in the developed world have the cash, the skills and, voracious needs. Nothing wrong in generating badly needed cash from something that you have in abundance but, how can those countries ensure that short term gain translates into long term sustainable growth?

Natural resources should trigger fundamental transformations in their economy. Logistics will play a crucial role. And yet, this is not about military logistics to sort out emergency connectivity, humanitarian logistics to enable medicine and food to reach the needy or even the Logistics of a stable economy – just yet. Can Transformational Logistics act as a catalyst for the Logistics agenda where countries trade off natural resources for short term gain? (more…)

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Last June Sir Bob Geldoff gave a key note speech at Hull Business Week. He has made many all over the world. Today, he writes in the Financial Times ahead of the Washington summit. (more…)

One of the biggest challenges in any emerging or fast growing economy is infrastructure. The Chinese have been superb at this. For example, the Pearl River Delta story starts with building up the clusters that delivered the roads, the railways and port connectivity. Manufacturing and textiles followed as market access (in/out) was sorted out. Exports exploded. Imports of vital resources were speeded up. The rest is history. The idea was to build capacity, supply would follow and demand would be triggered. Sustainable growth was the prize. Elsewhere, it is as if they build the house starting with the smoke coming out of the chimney. 

This video illustrates just why logistics has to be enabled for any economy to be transformed at the grassroots and not just at the macro level. It takes place in Chennai, India. Let’s be clear – it could be elsewhere. It is a wake up call. 

India will spend between $350 to $550 billion on infrastruture in the coming years. How much on the last mile? And how quickly? 95% of Indian exportsand nearly 70% in value terms are carried by sea and pass through the ports. The export-import (exim) trade has grown at an impressive compounded annual growth rate of 13.4% during the last ten years. Containerised traffic stands at 25% of exim trade and this will grow to 18m TEUs by 2013-14 in major ports. This is up from an estimated 8 m TEUS for 2008. And trucks move most of this through areas such as the ones highlighted on this video. Food for thought.  (more…)