In today's world, innovation has become a common word, and model has become Pizzahut. Tradition seems to mean backwardness, while conservatism seems to indicate demise. As the operator of third-party supply chain logistics services, when our thinking rolls forward with the general trend, we may need to calm down and analyze our industry and environment to make a correct judgment.

The Internet has triggered explosive changes in economic development

The rise of the Internet has disrupted the world and broken traditional concepts. The development of the world is complex and confusing, with science, technology, economy, politics, and major country relations intertwined. Laws are changing and rules are adjusting, making it difficult for even economists to understand and predict. Behind it, the internet is no longer just a technology, but more importantly, it has influenced people's thinking patterns, methods, and values. Under the mode of internet thinking, people's concepts are undergoing significant changes.

In traditional business management thinking, only those who earn sufficient profits are good enterprises. Under the Internet mindset, there is a greater emphasis on "possession". JD's listing proves that loss-making companies can also be good companies. As long as you possess the market, customers, territory, resources, entry points, and eyeballs... and are strong enough, you are absolutely good companies.

In traditional business management thinking, you get what you pay for, while internet thinking emphasizes "free". The birth of "360" announced the demise of the traditional antivirus software market and the rise of free services. In the world of the internet, no one is willing to use paid things. The trend of free services in the logistics industry has first emerged from the freight forwarding industry. Chunyu Foreign Trade Connect in the Yangtze River Delta has established a banner of free services. After Jack Ma moved in, Alibaba One Datong in Shenzhen not only provided free freight forwarders, but also provided subsidies for exports. In doing what the government should do, it has raised the banner of free services in two of China's most economically active regions, and the freight forwarding industry is suddenly in danger. Not only is the service free, but during the patent war between Samsung and Apple, Tesla electric vehicles, which are popular among trendsetters, announced that all patents will be open for free. Even patents are free, what is it really about?

In traditional enterprises, wool must come from sheep, while under internet thinking, wool can come from pigs. Since the birth of WeChat, there have been discussions about whether there will be a fee, but now no one is discussing it because Ma Huateng has found a "pig" that can grow wool. Some logistics parks are now considering the idea of free warehousing, officially because they have found value-added services that can grow wool.

Traditional enterprises focus on products and are customer-oriented. They do what customers want and do what they say. Under the current Internet mindset, more attention is being paid to the end users in the supply chain, and officially focusing on user value has become a key lever for third-party logistics enterprises and customers to optimize supply chain logistics together.

Nowadays, logistics alliances have sprung up in various places, but it seems that not many can thrive. This is because in traditional business thinking, the foundation of alliances is business cooperation relationships, including the client and supplier, which naturally form the relationship between the first party and the second party. The thinking of balance, constraints, assessment, rewards and punishments, and other enterprise management concepts have been applied to alliances, and the results can be imagined. Internet thinking is about alliances. This alliance is a genuine alliance, a parallel process of completing something together, rather than a series relationship where I entrust you to complete something.

Innovation will be one of the new driving forces for economic development. In traditional enterprises, technological innovation is often emphasized, and in the future, we will need to pay more attention to systematic innovation. The invention of hamburgers did not promote economic development. When they were transformed into exquisite products and established McDonald's and KFC, a commercial system was formed, forming a fast food culture that influenced people's living habits and even the world, ultimately producing huge economic effects. So, in the future, promoting economic development will mainly be through systematic innovation.

So what exactly is being talked about in the context of internet thinking? Internet thinking emphasizes openness, inclusiveness, and collaboration. Internet thinking is a transformation of values and a new understanding of current things. Values have changed, and methodology must also change.

The 'New Normal' Becomes Inevitable

When Bill Gross and Mohammed El Erian defined the "new normal" as "weak growth, high unemployment, fiscal challenges, and the rise of emerging economies," Premier Li Keqiang explained the macroeconomic regulation ideas and methods of China's "new normal" at the Summer Davos Forum on September 10, 2014: "stabilizing growth, promoting reform, adjusting structure, benefiting people's livelihoods, and preventing risks. Analyzing it, stable growth indicates that there is indeed a downward trend in the economy, and it is necessary to maintain stable and "stable" growth; Promoting reform demonstrates the need for change and innovation in national policies, government management, industry development, and enterprise operations; The structural adjustment indicates that China's economic development structure must be adjusted, which will inevitably bring huge adjustment requirements to China's logistics structure; Benefiting people's livelihoods indicates that industries and fast-moving consumer goods that are closely related to people's livelihoods will have greater development expectations; Risk prevention indicates that we must pay special attention to the risks of China's economic development and the risk control of enterprises; The growth rate has entered a new normal, the growth momentum has entered a new normal, structural adjustment has entered a new normal, and macroeconomic policies have entered a new normal. Under the new normal, China's economic development will moderate, and the continuous 20% high-speed growth of the logistics industry will also slow down. The shortage of resources has led the logistics industry to enter a period of high costs. The structural adjustment of China's economic development will promote domestic demand to become an increasingly important growth mode, and domestic logistics growth will surpass international logistics growth; The original development model of logistics enterprises is increasingly unable to adapt to the needs of the new normal, and innovation in operations and models will promote transformation and upgrading. China's logistics industry will usher in new growth opportunities.

Changes in Supply Chain Logistics Demand under the New Normal

In the logistics service army of China's economic development, there has always been a third party logistics service army struggling to move forward. Faced with increasingly fierce pressure from customers to lower prices, resource scarcity, and rising costs, there has been competitive pressure caused by the collective efforts of dedicated logistics to improve service capabilities. Some investors even compare third-party logistics to a "depressed brown bear". Compared to the hustle and bustle of e-commerce logistics, express delivery, and express transportation industries, the third-party logistics industry has become much more stable, without large-scale expansion or financing. Everyone seems to be doing their own thing, or practicing their internal skills, or deeply cultivating customers... So behind this blandness, the third-party logistics industry is facing the difficulties of traditional business development models and opportunities for a magnificent transformation.

1. Adjusting the structure will promote supply chain reform, and the third-party logistics market will continue to expand

Research has shown that the world's supply chain undergoes a major restructuring process every 20 years. 2013 is the first year of a new cycle, with the arrival of a new normal in the economy, technological progress, and social changes prompting enterprises to constantly transform and innovate to meet the needs of competition, transitioning from simply pursuing low basic logistics service prices in the past to pursuing high efficiency in the overall supply chain. The change in demand is the biggest driving force for the development of the industry, which will gradually drive third-party logistics enterprises to shift from the quagmire of vicious price competition to logistics solutions and optimization, thus forming a new and expanding market demand for professional supply chain logistics services, which will further promote the progress of China's supply chain logistics.

2. The operating policy environment of logistics enterprises is significantly improving

On January 20, 2014, the Ministry of Transport, the Ministry of Public Security, and the Ministry of Commerce jointly issued a notice on strengthening the management of urban distribution transportation and vehicle traffic, providing policy ideas and laying the foundation for solving the problem of urban logistics distribution and cracking down on block segmentation. The new pattern of urban logistics distribution will be developed in research. With the formal adoption of the medium and long-term development plan of China's logistics industry by the State Council, the central government streamlining administration and delegating power, a series of logistics industry support policies and laws and regulations will be introduced in the future, and a policy environment to support the development of third-party logistics enterprises will be gradually constructed. Detailed rules and measures to promote the development of the logistics industry will be gradually introduced and implemented. The focus of the government's work is to create a fair, legal, reasonable, trustworthy, and smooth business environment for logistics enterprises.

3. The operating environment of logistics enterprises remains severe

Due to the cross industry and full process characteristics of the logistics industry, and in the face of China's fragmented management pattern, major policies such as the national level logistics adjustment and revitalization plan and the National Ninth Article are also facing difficulties in implementation. On the basis of the existing problems that have not been solved in the development of the logistics industry, we still need to continue to face the short-term side effects of replacing business tax with value-added tax. Various resource costs continue to rise, logistics resources are becoming increasingly scarce, some logistics operation methods are still extensive, the added value of logistics services is still not high, there is a shortage of talent, the level of technological application is uneven, the industry lacks integrity, the environmental burden is heavy, and funds are scarce, among other problems, There is still downward pressure. In the future, the operating environment of third-party logistics enterprises in China will still be severe, which will promote the transformation, transformation, and adjustment of logistics enterprises. At the same time, the continuous increase in logistics costs will be transmitted to the entire economic chain, resulting in a continued increase in economic operating costs.

4. Capital begins to pay attention to third-party logistics enterprises

In the past, most of the focus of capital has been on social logistics service enterprises such as express and express delivery, which are growing rapidly and can have monopolistic market trends and unique business models. Third party logistics enterprises have not paid much attention due to their lower growth compared to social logistics service enterprises. In the future, China's economic and industrial structure will enter a stage of rapid adjustment. The adjustment of third-party logistics to customers will offer more innovation and optimization swords. Compared with the situation of more investment in social logistics, third-party logistics has more choices and more innovation, which may attract the attention of capital. At the same time, the opening of the new third board for small and medium-sized enterprises, It may further promote capital's attention and enthusiasm towards third-party logistics enterprises.

5. Gradually deepening basic research in the logistics industry and improving its level

At present, the basic research on logistics in China is still quite weak and far from meeting the needs of the development of China's logistics industry. With the joint efforts of the China Logistics and Procurement Federation and the China Logistics Society, the China Logistics Research System has gradually formed, and a research organization composed of research institutions, logistics colleges, logistics enterprises, and customer supply chain personnel has been established. Through project initiation, research, results, evaluation, publication, and publication The application and various aspects have promoted the development of logistics research in China. In the future, logistics research will further improve in level and depth, laying a scientific foundation for the development of the logistics industry.

Changes in Supply Chain Logistics Service Enterprises under the New Normal

Faced with the new normal of the economy and the constantly emerging new models, concepts, and perspectives in the world, third-party logistics enterprises are naturally unwilling to be lonely and are also striving towards the path of change.

1. Third party logistics enterprises have shifted their focus from supply chain logistics technology to innovation in business models

Due to the high stickiness and dependence of third-party logistics on customers, the previous business model was basically positioned to provide personalized services that meet their needs. With the intensification of competition and the accumulation and exploration of logistics experience in the supply chain of logistics enterprises, in order to cope with irreversible cost increases and fierce competition, the idea of occupying resources is also being adjusted, and attention is also being paid to business model innovation, in order to achieve supply chain optimization results that exceed customer expectations, and further collaborate with customers to optimize the supply chain, platform based supply chain services Flat supply chain services based on private logistics clouds have begun to emerge and develop, and the exploration of platformization such as the supply chain logistics service platform of Sinotrans is constantly advancing.

Improving logistics management and operational efficiency will be a key task for third-party logistics enterprises

Faced with fierce market competition and rising costs, third-party logistics enterprises will focus on improving their supply chain solution capabilities, logistics information technology and capabilities, and improving operational efficiency in order to cope with the dual pressure of rising costs and customer bargaining. They will focus on lean techniques and methods to form new competitive advantages for supply chain customer service; Through the innovation of business models, with the advancement of logistics information technology and logistics technology, the investment in informatization has increased. New technologies such as big data, cloud computing, Internet of Things, mobile internet, and smart logistics will gradually be applied in third-party logistics services. The upgrading of technical equipment is accelerating, and the demand for modern logistics equipment such as energy-saving forklifts and forklift accessories, new shelves, sorting and transportation equipment, and three-dimensional warehouses will rapidly increase. The shared recycling system for pallet leasing will develop rapidly. Improve labor productivity and logistics efficiency. Establishing a new resource alliance mechanism and system, realizing the transformation of logistics enterprise business growth mode, promoting the upgrading of logistics services, and also beneficial for enhancing the competitiveness of China's logistics enterprises.

3. The third-party logistics service market will gradually develop from the mid to high end of the logistics market to the mid to low end, and competition among logistics enterprises will intensify

With the deepening of the structural adjustment and transformation of China's economic development, the demand for third-party logistics services will continue to be released. Due to the improvement of professional logistics service capabilities, new enterprises with traditional transportation resources and advantages will enter the third-party logistics service system. Third party logistics services will gradually expand from the mid to high end of the logistics service market to the mid to low end market, not only professional third-party logistics contract enterprises, Social logistics companies such as Express will also increase customer stickiness by trying to integrate logistics enterprises, thus further intensifying competition. The competition between logistics enterprises, specialization and platformization will be two development directions, and platform based third-party logistics enterprises may gradually develop through exploration.

4. Segmentation of the third-party logistics market, with small and medium-sized third-party logistics enterprises developing towards advantageous majors

With the rapid development of China's economy, the third-party logistics service market, which used to focus on large customers, will gradually develop into emerging markets, especially rural logistics (including production materials, living materials, and agricultural product logistics), community logistics with the increasing rise of e-commerce, specialized cold chain home logistics, service-oriented logistics based on the tertiary industry, professional hazardous chemicals, pharmaceuticals With the development of the industry and the adjustment of national management policies, many emerging markets such as medical device logistics will emerge, cultivating a group of professional third-party logistics service enterprises. The pattern of third-party logistics services dominated by small and medium-sized logistics enterprises will not change.

The new normal of the economy, new demand for logistics, new management thinking, and new government concepts will truly promote the magnificent transformation of China's third-party logistics service market.

The author, Yun Mian, is currently the part-time vice president of the China Logistics Society and the operation director of Tianjin Delide Supply Chain Management Co., Ltd. Since 1998, I have been working in supply chain logistics services and have proposed supply chain and value chain solutions with Chinese characteristics for multiple multinational enterprise clients such as Siemens in Delide Supply Chain. I have accumulated rich experience and unique insights in supply chain logistics services and modern logistics enterprise management, and have published multiple logistics related papers.

Executive Director and Special Researcher of the China Federation of Logistics and Procurement, Deputy Director of the Expert Committee of the Road Freight Branch of the China Federation of Logistics and Procurement, China Logistics Industry Early Warning Expert of the Anti Unfair Competition Investigation Bureau of the Ministry of Commerce, a member of the Third Party Logistics Standard Committee of the China Standardization Commission, and an expert in the logistics industry of the National Bureau of Statistics. He has participated in multiple research projects related to logistics industry policies by the national government, Actively participate in logistics industry activities and become a national model worker in the logistics industry awarded by the Ministry of Personnel and the China Federation of Logistics and Purchasing.