Logistics and transport in a developing world

•  CILT Global Convention opens in Colombo

By Cheranka Mendis

Hosting over 130 delegates from around the world, the Chartered Institute of Logistics and Transport (CILT) Sri Lanka yesterday held the opening ceremony of the CILT Global Convention 2013.

Held at The Kingsbury Hotel, the Convention was held following two days of business meetings between CILT member countries and will be followed by two more days of interaction and dialogue.

In a growth and development-oriented interconnected world, transport and logistics are the main veins and arteries of the global economy, Chief Guest and IMG Resident Representative Dr. Koshy Mathai said. Noting that no country can have sustainable growth development if it does not rely on exports, he acknowledged that role played by those in the transport and logistics industry was vital for the progress of the world.

“Taking into account countries that have grown fast in the modern context, these are all countries that hooked to the global economy and built their economies around exports. It is certainly important to a small country like Sri Lanka to develop the sector.”

With the Government focusing on a strategy to develop Sri Lanka as a regional hub in diverse areas, the country’s reliability on logistics and transport is a given, he said.

Prospects of the world economy

However, with the IMF projecting a 3.3% growth for the world while anticipating the rate to pick up to a 4% next year, the world must balance the impetus of austerity and growth, and aim at increasing trade volumes that are recovering from an almost overnight drop in 2008/2009.

“As the recovery takes hold, more firms will see trade volumes recovering and countries will be able to benefit from the investments made in the transport sector such as the development of port, air, rail and road.”

Mathai stated that the world will see a ‘three speed recovery’ with the US and Japan growing at 2-3%, Euro contracting and the building up next year, and emerging markets growing at a overall 5-6% while developing Asia averaging more than 7% growth.

“Good policies taken by different countries have been catalysts in addressing the major risks – of a Euro area break up and so called US fiscal cliff – we were worried about six to 12 months ago,” he asserted. “We are also still in a recovery stage and we cannot see all countries growing at the same phase. We see emerging economies growing reasonably fast, we see US in a decent phase of growth but Europe is still stuck in a state of contraction.”

While activities have started to pick up in the housing and vehicle sales sectors in the US, outside the States, advanced and emerging economies are all picking up. Financial market which is at the heart of such difficulties is showing progress with portfolio capital flows into the emerging markets have increased quite dramatically. Stock market investments in these markets have also gone up dramatically in the last couple of quarters. “Because of these capital flows, we can see a rebound of the equity markets; in Sri Lanka as well.”

Capital flows helped strengthen the equity markets as well as currencies with the notable exception of Japan (Yen moving in the opposite direction) with all countries in the region showing appreciation in this regard.

“Fiscal policy is still quite contractionary, putting a break on growth in most of the advanced economies. As a result they have gone on a trip of reducing deficits, and trying to bring debt ratios down. What we are seeing is a tightening/reduction in deficits from one year to next. This naturally slows down growth.”

In balancing the impetus of austerity and growth, consolidation must be done at a pace that can be borne by the recovery. “Monetary policy needs to stay accommodated but we have to watch out.”

“It is certainly a lot rosier than what we were looking at a few years ago,” he assured. “The global economy is certainly on recovery and has been for a couple of years.”

 President’s Report

Delivering the President’s Report, CILT President Dr. Dorothy Chan noted the importance of working in collaboration expressing her key message to be “stronger together”.

Consisting of over 30 countries, CILT works towards a common objective of realising better potential in the spheres of logistics and transport. Listing the activities carried out through the year, Chan noted that the first duty was to put the house in order by forming a sound management leadership team with clear responsibilities and implementing changes and transiting from a single secretary general to a part-time secretary staff of three. “We also put in place delegation agreements and introduced face to face meetings.”

She stated that they have developed strategies for education and professional development, and to establish standards, and global market development strategies.

An International Mission for 2013/2014 has been prepared earlier this year, she said. This was circulated to members of the International Management Committee and a one page document of the same was distributed among Convention participants yesterday.  

“International Mission has identified three key themes for the year: growth, capability and governance,” Chan said. “The aim is to build on ideas and suggestions that are timely and appropriate.” Under the three themes, 24 action items have been identified. She invited all to study it closely and share their observation and allow CILT to monitor the progress and to achieve target.

Under the theme of ‘growth’ CILT has developed one logo for the entire CILT family. “This is a global identity for CILT in the future. The new logo and meaning behind it truly reflects the international nature of the institute.” More tasks will be carried out to strengthen this in markets by the Global Market Development Task Force, she said. They are also working on internationalising the diploma and advanced diploma programs.

Under the area of ‘capability,’ CILT strives to be proactive, relevant and on the competitive edge in the market, and be an institute capable of maintaining excellences and growth. “We see the benefit of having defined processes and systems across various fields. We are keen to promote professionalism and are ready to respond quickly to opportunities and challenges. “Our newly-established alumni will become an important role in the experience and continuity of our institution.”

CILT will also move towards facilitating the development of territorial organisations across countries as Sri Lanka has done last year. “We will do this as a partnership. From the beginning of the year active dialogue has begun in China, Nigeria in moving forward with territorial organisations. The transformation isn’t easy but we have been able to do it.

Under ‘governance’ Chan congratulated Sri Lanka for joining in and forming Women In Logistics And Transport (WILAT) and joining seven other woman groups formed in CILT over a short span of 12 months. The logo of this formation was launched on Monday. “I believe more inclusive groups will be formed internationally.” Chan said: “The key ingredient for future success of the institute is the solid foundation of good governance. We will move forward with the three themes highlighted while integrated risk management will play an integral part in our forward planning. It is important to remember that our growth strategy must be supported by this.”

 Honouring Diandas

A book consisting of the John Diandas Memorial Lectures from 2003 to 2012 was launched yesterday, honouring the past Chairman of CILT Sri Lanka and Honorary Fellow John Diandas. The lectures delivered every year by professionals in the industry are a collection of highly educational and insightful material of thoughts by the lecturers.

A scholarship was also awarded to Janaka Weerawardena who is studying for a PHD in University of Moratuwa in the Department of Transport and Logistics Management. This was given under the John Diandas Memorial Fund.

Pix by Upul Abayasekara