The logistics industry is thriving currently after experiencing a challenging period that lasted for three years. During this time, the supply chain has become more important in companies’ strategies due to the realization of its critical role and impact on the entire business. This was not previously recognised, Global Senior Director of Energy at GEODIS, Amanda Bouin said.

“So as a result, there is a lot more attention being paid to logistics and the whole supply chain, which in a way is good. It means it has been recognised for what it is worth and the impact it can have on the project that our clients are working on,” Bouin said.

The current market situation remains complex due to its high volatility and its destabilised state. However, there are signs of increasing predictability, which is beneficial for all involved. When things are organized and scheduled, it benefits everyone. For GEODIS, this means new opportunities.

“We are beginning to manage to obtain validities of rates which are slightly longer than we could for a while, which obviously helps everyone, it helps our customers, helps us, it and obviously helps the providers because we can plan a lot more and we can schedule a lot more,” Amanda says.

The balancing act

The energy industry is undergoing significant changes in both traditional oil and gas sectors and renewable energy sources. However, it is important to maintain a balance between the two, as we still heavily rely on both forms of energy. “Unfortunately, we have not yet reached a point where we can solely rely on renewable energy due to insufficient production levels,” adds Bouin.

As the world’s population continues to grow, the demand for power is increasing at an unprecedented rate. However, it is crucial to strike a balance between meeting this demand and prioritizing renewable energy sources. With net zero on everyone’s mind, there is a rush in the renewable sector, which is taking up a significant amount of space in the market.

The pursuit of net-zero emissions has ignited a race among countries, inevitably leading to tension and difficulties across various sectors. The growth of renewable energy has put a brake on the traditional oil & gas industry, and the recent events in Ukraine have further impacted the market.

Speaking of projects, Bouin noted that during Covid a number of projects have been put on hold and additional tension is being created by the fact that post-Covid, floodgates opened, with so many projects in different industries hitting the supply chains at once. However, the right structure and know-how are helping GEODIS deliver on time.

“We in GEODIS have different segments, that manage all the different sectors. We all work together as a team. The fact that we have dedicated people working on the energy sector dedicated people working on renewables, dedicated people working on the rail projects on the infrastructure projects, means everyone is focusing on their own sector,” Bouin adds.

However, very often, each company sector relies on the same resources and service providers. “Identifying the right service providers to target is crucial for success in your market. Take note that some providers are highly specialized in certain sectors of activity within renewables due to intense competition in the industry. This calls for strategic targeting and offering of solutions to achieve maximum effectiveness,” Bouin said.

This is pretty much the case within every company, big or small. The issue companies with less capacity are facing is the fact that focusing solely on one market means they close themselves off from other markets. “Unfortunately, the market has a very short-term memory. Once you focus on one niche sector, instead of the other, the industry keeps going and someone else takes your spot.” Bouin said.

This is where established relationships play a major role. “It’s comforting to develop a genuine relationship and partnership with a service provider that’s working well. When customers see positive results, they become more confident in the solutions provided. This is especially true when it is a single project. However, service providers today are anxious about losing these types of relationships,” Bouin said.

Restructuring the sourcing patterns

The complexities and challenges have called for a shift in sourcing strategies. Project forwarders had to adapt to the demands, but the shift has not been quick enough, according to Bouin.

“The main issue is that it takes a lot of time. For example, wind farms have existed for a while now, but the recent push for offshore and onshore projects has been quite significant. Despite the fact that the market is mature and people are familiar with transporting and moving turbines, the industry has also evolved and changed. As a result, wind turbines are becoming larger in order to generate more electricity, and the types of turbines being used are also changing. Therefore, the market needs to continue to evolve and meet the necessary requirements,” Bouin said.

Producing renewable energy on a global scale is difficult and takes time. Governments want net zero, but it requires planning and infrastructure like production facilities and ports with enough capacity. It also requires a skilled workforce. The ambitions are big, the goals are set but at this pace, they can’t be achieved in time. Renewable energy solutions are needed now.

Steps to move the manufacturing facilities closer to Europe, or where the projects are being developed have already been taken. However, while some companies are able to offer solutions already, larger companies are taking time due to the scale of their manufacturing processes.

“However, changes are beginning to emerge and progress is being made in the right direction. The ultimate goal is to achieve true net zero, which requires producing renewable solutions in the same country where the wind farm is located. This will help reduce the need for extra transportation and contribute to a more sustainable future,” Bouin said.

“We are witnessing a new market emerging and it is important to keep up with the changes. As with any new market, regulations will develop alongside it. This process will take time as we work to create a structure that benefits both countries and companies” she concluded.