No industry exists in a vacuum. Everything is interconnected and hinges on each other. The same is true of the logistics industry. The trends that will reshape the logistics industry are mostly trends that have to do with other industries that function together with logistics.
Experts believe that technological, business and social trends are going to drive the disruptions that will be felt in the logistics industry. For some, these changes will be long overdue.
From social trends like sustainability, over the changes felt in business with the rise of e-commerce, to the multiple changes the advancement of technology will allow, the logistics industry is set to undergo massive changes in the next couple of years. Let’s take a look at what we can expect.
Business Trends
E-commerce logistics and supply chains are what have most consistently been reshaping the logistics industry. What has been most influential are the customers’ expectations. Not only do customers expect to get their goods faster, but also at a low delivery cost. Not only that, but manufacturing is becoming more and more customized, which is making things all the more complicated for the logistics industry. These are the key business trends that are impacting logistics in 2020.
Last-mile Deliveries
With the advent of Amazon Prime, customers have grown to expect much faster delivery times. Companies like Amazon and Walmart provide services that offer same-day or 48-hour deliveries for less money than their competitors, sometimes even for free. This will lead to manufacturers, distributors, and logistics professionals needing to find strategies to offer shorter turnaround times on last-mile deliveries. In practice, shippers will begin focusing on what is called just-in-time delivery (JIT). JIT delivery means inbound freight arrives at the warehouse just in time for shipment in order to shorten the delivery time. This, in turn, will lead to the lowering of warehouse costs as well as carrying costs.
Localizing Warehouses
In order for JIT to work, companies will have to move warehouses closer to the consumers. Instead of having several major distribution centers, companies will look at having more smaller warehouse options throughout their market. The location of these will be determined by the frequency of orders in different areas.
Social Trends
For the most part, the social trends that will impact the future of the logistics industry are urbanization and sustainability. Increased urbanization is making it much harder to manage logistics and is making everything far more unpredictable. It also creates the demand for smaller commercial vehicles doing the deliveries. On the other hand, delivery trucks often add to pollution and traffic jams in a city setting.
This leads us to the second social trend aiming to impact the industry – sustainability. Doing deliveries cities with dense populations is getting harder and harder to manage sustainably. On top of this, there are stricter and stricter emission regulations. For example, freight-carrying ships have long been under fire for the amount of crude oil emissions. The limit for sulfur in fuel oil has been reduced starting with January 1, 2020, to 0.50% m/m (mass by mass). In addition to this, companies have been under constant pressure to adopt different green initiatives on the corporate level. All of this will force changes when it comes to logistics.
Technological Trends
Regardless of what happens in business or society, technological advances are the main and most numerous trends that will reshape the logistics industry.
Autonomous vehicles will provide great safety benefits at the fraction of the cost. Platooning technologies that link two or more trucks in convoy will provide greater fuel efficiency. Another technology that will also help with sustainability is the increased use of electric or hybrid trucks for deliveries and transportation.
Customer-facing APIs
These softwares are there to provide customers with information about where their parcel is at any time. This makes the customer feel in control of the purchase and, more importantly, makes them more likely to return. Reaching out to customers via email or text to let them know what stage their delivery is at is a simple way to keep them in the loop.
This kind of technology is also not only for customers. Advances in this field can help you keep track of your freight shipments, which can be invaluable especially if they are late.
AI and Big Data
Artificial intelligence and big data are the advances that are most likely to change the logistics industry. Analytics and AI will allow for better and faster decision making when it comes to logistics. They will enable automated scheduling as well as route and volume planning.
Drones and Robotics
Even though they are currently not very common in warehouses spaces, the awareness of the need for robotics is increasing every day. Currently, only around 5 percent of warehouses have employed this technology. It is certain, however, that this is the trend that is definitely here to stay. Its benefits are many, including solving the problem of the low labor availability for these jobs.
Drones have similarly been treated as too futuristic. However, an increasing number of companies are using them for their quick deliveries, especially in densely populated areas.
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Sebastian Miller has worked for statetostatemove.com for 4 years now. Working with a company specializing in all types of moves, from residential to corporate, for many generations has provided him with a rare all-encompassing glimpse into the moving industry. He lives and works in Dallas, TX.