Yesterday, we reviewed some key events from 2009, along with the most read postings on Logistics Viewpoints. Today, my colleague Steve Banker and I offer up a few predictions and things to look for in 2010.

Steve’s Predictions

• Demand Signal Repositories (DSR) market continues to grow briskly: Based on research I conducted for an upcoming market study, the DSR and related applications market grew 49 percent in 2009. And this occurred in the midst of a large global recession! Based on ARC estimates, i2 Technologies, a new entrant to the market at the end of 2008, grew its DSR-related revenues from under $1 million to over $10 million in one year. We also estimate that IBM has grown its revenues in this area to over $10 million in three years, despite not offering a core DSR database product. And now Oracle has entered the market, and we expect the company to generate at least $10 million dollars in DSR-related revenues in the next five years. (i2, IBM, and Oracle are all ARC clients). Based on these factors, it’s hard to imagine this still immature market not growing by a very health margin again next year. 
• Continued political rhetoric on cap-and-trade: I expect large companies, particularly retailers, to continue touting their green credentials, but I don’t see all of this political talk translating into meaningful legislation. As a result, it will be “business as usual” for the vast majority of companies. Warren Buffett buying Burlington Northern Santa Fe is essentially a huge bet that things won’t change much because BNSF derives a large percentage its revenues from transporting coal. I’m betting that Warren Buffett is a much more astute predictor of which way the political winds will blow than most political pundits. I also believe that the percentage of energy produced by natural gas, wind, and solar will increase, but this will be a steady, ongoing process rather than a revolution.
• Google continues to roil the supply chain technology market: As I highlighted in a recent post, Google has shaken up the GPS and navigation industry with some recent announcements. Google is developing a map database to compete with the routing and navigation maps provided by NAVTEQ and Tele Atlas. The company also announced it is offering a free turn-by-turn (TBT) navigation app with its Android 2.0-based smart phones. I don’t expect these to be the last announcements that surprise logisticians. I expect Google to continue investing in mobile technologies, in free cloud-based applications, and in other new areas designed to rattle its mortal enemy Microsoft. Google’s primary focus is serving the mass consumer market, not providing logisticians with new solutions. Nevertheless, I expect to see more solutions based on Google technologies come to market in the supply chain arena.

Adrian’s Predictions

• The House version of cap-and-trade might not pass the Senate, but something else will. I guess I’m a bit less pessimistic than Steve. I think cap-and-trade legislation will follow a similar path as healthcare reform: a lot of backroom deals will occur to get the necessary votes, but the end result will be a much watered-down version of what is on the table today. With the EPA ruling earlier this month that CO2 and other greenhouse gases are a danger to public health, thus giving it the power to regulate CO2 emissions under the Clean Air Act, some form of legislation from Congress is arguably the better poison for companies to swallow. I agree with Steve that absent some form of legislation or regulatory framework, as well as progress on the standards front, most companies will continue to stand on the sidelines. The clear winners at this point: software vendors offering “carbon information management” solutions (see “Managing Carbon: A Green Opportunity for IT” and click here to read all our postings this past year related to sustainability).
• Employee Free Choice Act (EFCA) moves to the forefront. I wrote several pieces last year and at the start of 2009 on EFCA, but with the Obama administration and Congress focusing so strongly on healthcare reform in ‘09, EFCA was put on the backburner. With the healthcare reform bill expected to pass the Senate tomorrow, I expect EFCA to move near the top of the legislative agenda in 2010. See “Retailers Propose Alternative to Employee Free Choice Act” and “Employee Free Choice Act Gets Introduced” for our past comments on this topic.
• Countries will continue to not “walk the talk” on protectionism. Remember “Buy American” and our rift with Mexico over NAFTA? Well, the U.S. is not alone in saying one thing, but doing another. According to a report issued in September 2009 by Global Trade Alert, “Broken Promises: A G-20 Summit Report by the Global Trade Alert,” protectionist measures are being implemented around the world. At least 70 harmful measures have been implemented in every quarter of 2009, and another 134 protectionist measures are in the pipeline.
• Continued strong demand for Transportation Management Systems (TMS) and Global Trade Management (GTM) solutions. I shared my outlook on TMS last week, so I won’t repeat myself here. With regards to GTM, it is important to note that although trade volumes are down this year, the costs, risks, and complexities of global trade continue to increase, which in turn generates demand for GTM solutions. The Importer Security Filing (ISF) rule (aka “10+2”) received a lot of attention this past year, and it will continue receive attention in 2010 as Customs and Border Protection starts to enforce the rule next month. But as I wrote in a previous posting, there’s a lot more going on in the world of global trade than ISF (see “Customs and Border Protection: A Refocus on Trade Facilitation”).
• Third-party logistics (3PL) providers will continue to realign their strategy and focus. You can read all of our postings related to 3PLs and logistics outsourcing here and here, but in a nutshell, I believe the logistics outsourcing industry is at a transition point. 3PLs that can effectively leverage technology to innovate their processes and create differentiated value for customers, as well as those that learn to think more like Google and Apple and less like operators of trucks and warehouses, will thrive in the coming decade, while those married to the status quo will get left behind. More on this topic in the weeks ahead.

Well, that’s all from us in 2009. I want to thank all of our readers for making Logistics Viewpoints a success this year, as well as our sponsors who make it all possible. On behalf of everyone here at ARC, we wish you all a happy and healthy holiday, and continued success in 2010. See you in January.