Logistics and Supply Chains in Emerging Markets

Where the Action Is

In recent years, logistics service providers (LSPs) have watched markets deteriorate in North America, Europe and Japan. As trade lanes with long histories of profitability suffer weakening volumes, international LSPs are turning more attention to emerging markets. Often they enter these markets by buying local LSPs or setting up joint ventures with existing companies.

Emerging nations’ historic ties to Western consumer markets are starting to loosen due to their internal infrastructure development and rising middle class. The trend toward “near-sourcing” – locating manufacturing in a country closer to the consumer – boosts economies of emerging nations such as Turkey, with its proximity to Europe, and Mexico, which neighbors the US. Some emerging-market economies are among the world’s fastest-growing, although their expansion rates have cooled recently. The International Monetary Fund expects most emerging nations to experience a 6% annual economic growth rate from 2013 to 2018, surpassing the expansion rate of established economies.

In 1981, the World Bank’s International Finance Corporation first defined an “emerging market” as “a country...