The European supply networks have seen and experienced a significant transformation over the decades. Various European logistics companies and networks have evolved in response to the beginning of the common market. The emergence of the European Union, in particular, is radically altering logistics and supply chain management in the old world.
Here’s what Europe’s logistics looked like before the advent of the European Union in the world.
The Pre-1933 Era
Before the establishment of the European Union, many corporations had a national system with a distribution hub in all of the key countries in which they competed. Sourcing was done mostly from European manufacturing units, and a country-by-country logistics strategy was devised.
Additionally, logistics responsibility was typically national—there was rarely a true European plan. Often, supply chain service offers were one-size-fits-all. Domestic carriers provided transportation, while third-party logistics providers were frequently local or regional.
The Mid to Late 1990s
Soon, the European Union began to open its internal borders as global sourcing became more crucial, and manufacturers became more globally focused. Companies established strategies for European supply chain management as the responsibility for logistics grew increasingly European-centered.
Pan-European distribution facilities began serving all of Europe’s major nations. These DCs expanded their duties, deferring production and adding value-added operations to the typical receive, pick, and ship functions. Surface carriers from around Europe arrived on the scene. Furthermore, businesses increasingly outsourced their transportation needs to integrators who could ship straight from a single location.
The Current Situation
Using centralized, pan-European distribution networks necessitates sending items to clients over wider distances, which can be costly in terms of both money and time. As a result, European supply chains are again shifting to become more product- and channel-specific.
Companies currently use a combination of centralized and decentralized distribution facilities, such as a centralized DC for medium and slow-moving items and distributing fast-moving products from a regional center located closer to clients. Some goods can be dropped-shipped straight to the client under this strategy, bypassing the DC entirely.
The Modifying Workforce
There has been a drastic shift of working labor to Western Europe. What’s cherry on top is the working population in Western Europe is aging rapidly, with a few younger folks to carry the load. As a result, migrants from Eastern Europe, Africa, and different conflict zones tend to play an increasingly prominent role, resulting in a more varied workforce in Western Europe.
In Europe, transportation is a major concern. However, substantial work is being done in this regard. Governments are taking steps to alleviate traffic congestion, such as collecting road tolls and investing in train infrastructure.
The introduction of a unified currency has generated pricing clarity across Europe. Many individuals hid behind the fact that they were selling things at various prices in different marketplaces before adopting the euro. The use of the euro alters everything. It has triggered a whole new wave of procurement.