Interview: C4L’s Malik Zeniti on Impact of COVID-19, Green Initiatives on Logistics Sector

Chronicle.lu recently got the opportunity to speak with Malik Zeniti, Director of the Cluster for Logistics Luxembourg (C4L), about the challenges and impact of the COVID-19 pandemic on the logistics, supply-chain and warehouse industry in Luxembourg, as well as the progress in sustainabilty and green intiatives on logistics sector.

Chronicle.lu: How many people does the Luxembourg transport and mobility sector employ? How much of Luxembourg's GDP does the logistics sector represent?

Malik Zeniti: To put it into perspective, according to a 2016 Benelux study, almost 10% are employed in the transport & logistics sector in Benelux. Luxembourg is an exception to that rule, as harbours like Antwerp or Rotterdam do not exist here and hence only roughly 3.5% or about 20,000 employees are somewhere linked to the transport and logistics. In the last seven years almost 250,000 m2 of warehouse have been added, strengthening the handling of goods transported across Europe.

Chronicle.lu: With around 100 companies as C4L members, which areas in Luxembourg's logistics sector has been most impacted by global supply chain shortages?

Malik Zeniti: The lack of transport capacity for global supply chains and increased volatility has created a lot of stress across the supply chain, and forced particularly retail and industrial companies to identify alternatives and measures to secure production. The airfreight at the airport has achieved 1.15 million tons, up 19% from last year despite the difficult COVID-19 impact on manpower, whom we can only thank and congratulate.  

Chronicle.lu: Please tell us more about the LEAN & GREEN certification, for which the first online workshop is scheduled for 23 February 2022.

Malik Zeniti: In future, the voluntary LEAN & GREEN decarbonisation programme initiated by the ministry and promoted since 2014 in Luxembourg to help companies define a plan to save minimum 20% or even achieve more than 30% CO2 emissions reduction, will get more important due to the Luxembourg Energy & Climate plan (NPEC) that has raised ambitions from 20% in 2020 to over 50% in 2030. Companies that do not measure CO2 will struggle to estimate how to achieve their goals and what organisational, infrastructure and financial plan are required to meet the goals, the government expects to achieve by 2023. We are available to help provide training and support companies to perform a first plan in not more than six months and get more planning security and organisational competence.  

Chronicle.lu: Can you elaborate on the European Energy Savings Directive (EED) and how LEAN & GREEN EEO subsidies work within this framework?

Malik Zeniti: When a directive like the ones requiring companies to save energy and meet European goals get mandatory, its usually without any particular subsidies that companies have to achieve the goals. So there is a transition period where forerunners can be supported for innovative and process related measures that require changes, innovation and hence include some source of risk, that companies would not take on their own. A practical example is the testing of new energy sources or more expensive aerodynamic trailer technology that is expected to save energy.    

Chronicle.lu: How has the current rise in fuel prices impacted the logistics sector? Do you have any contingency plans in place?

Malik Zeniti: In Europe some companies stopped to use the liquefied natural gas (LNG) trucks due to costs that companies were unable to forcast. The increased energy and fuel prices cannot be absorbed by the sector and will be passed on as much as feasible during a time where low capacity and a lack of drivers makes planning extremely volatile.

Chronicle.lu: How much has the pandemic impacted the trade fairs and other C4L events?

Malik Zeniti: We have been able and our members have quickly become accustomed to digital events since early 2020. We can see however that many people are tired and would like to meet face-to-face with customers or suppliers again. Trade shows will continue to face a tough time until the epidemy has left us with mostly people who are vaccinated or have recovered from COVID-19. The digital calls will make their entry paperless, a new standard and accelerate digitilisation.

Chronicle.lu: Which are the main challenges for the logistics and warehousing companies in Luxembourg compared to other European peers?

Malik Zeniti: Decarbonisation and digitilisation are two major objectives after a decade of huge investments in physical infrastructure in the transport and logistics sector. The increase in talent development at high school and University level should help companies reinforce their resilience and supply chain planning to find the right employees and particular competencies that Luxembourg has started to attract. I'm disappointed though about the lack of investment into people that many companies display and I'm afraid some human resources (HR) departments will suffer as a consequence when unemployment drops further.   

Chronicle.lu: What are the objectives and motivation behind the ongoing digital transformation survey and how well placed is the Luxembourg logistics sector in terms of digitalisation compared to its European peers?

Malik Zeniti: There is an increasing interest from companies active in the finance or fintech for our sector and platforms, APP's and data analysis, which will transform our sector not only driven as Industry 4.0 but also creating new habits in the way logistics services are offered and procured.  

Chronicle.lu: Excluding digitalisation, what are main challenges faced by Luxembourg logistics companies, in terms of finance, workforce, supply-chain constraints, peer competition, efficiency and cost-effectiveness, storage space, environmental and green initiatives, etc.?

Malik Zeniti: The international image of supply chain has increased in the last decade and Luxembourg enjoys a broader international reputation as hub for supply chain and e-commerce. The lack of easily available multilingual employees that need to be better paid and dedicated to our sector will be complemented more and more by very international workforce from outside Europe. We see that, for example at the master of supply chain level, and this will force companies to revisit the tasks performed locally and to be outsourced to other regions of the world, particularly at the ICT level. This will push further automation and digital processes and use of robots and artificial intelligence by forerunners.