The future of logistics: opportunities and challenges in the sector after investigations and proposals

Investigations, legislative proposals and parliamentary questions: the future of logistics, for the past few months, seems to be full of shadows and doubts. These events have certainly been a shock for the sector and its many markets, but also a great opportunity.

On a general level, the fact that the public authority dealt with logistics, that there were judges who wanted to verify the correctness of certain consolidated dynamics, that the government was concerned about widespread behaviour in the sector, that parliament discussed it, was - and still is - very positive. This is part of the correct dynamics of managing any activity relevant to the country, and that logistics is relevant in ours, as in all countries of the world, is a reality that Covid-19 has made manifest.

Since all this happened, what we might call the 'background noise' on this news has increased considerably, especially on a point that I consider very important and which I would therefore like to try to clarify. In fact, my ideas on the strategic opportunity, offered by this albeit difficult moment, to greatly reduce tertiarisation appear from some quarters to be interpreted almost as the indication of a simple panacea capable of automatically solving every problem in the sector. No idea could be further from my vision and above all, I am convinced, more mistaken and dangerous.

My view is based on micro and macroeconomic considerations. Simplifying, at the micro level well-known theoretical and empirical conclusions of Game Theory, in the language of which the investigated companies suffered a reputational collapse, show that this can only be combated with strong direct investments in reputation. These have a probability of success directly proportional to two variables: their consistency with the causes of the collapse and their irreversibility, i.e. the fact that, once started, there is no turning back, neither by reducing them nor by directing them to other purposes. It is therefore obvious how, with respect to these two characteristics, the internalisation of labour is the stronger strategy. At the macro level, however, we observe a well-known cross-sectoral problem: the difficulty for logistics companies to offload an articulated cost structure downstream, seeing price levels consistent with different levels of service quality accepted by their customers.

This is precisely the key point in making the outcome of an internalisation process anything but simple and automatic. None of the (albeit) large operators involved will, in fact, see themselves accepting higher prices from their clients just because they were virtuous and hired directly. If the economist had any doubts on a theoretical level (and I have none), experience in a company that represents an open challenge, in the area of high-profile logistics services, on precisely these issues would have eliminated them: in the absence of a significant increase in the quality of services, the client will never absorb an increase in average prices. And this quality must be understood on at least two levels: that of the 'service models' and that of their execution (in reality, there would be many declinations, but the space available obliges us here to mention only the capital themes of the process).