Last year was record-setting for the logistics and supply chain industry with $5 billion in total projected investments. We saw the space cement itself as a mainstay in global news with the growth of the $800 billion trucking industry and rumors of Amazon “secretly” building an “Uber for Trucking” application.
The logistics and supply chain industry is poised to continue making headlines in 2017. Let’s take a closer look at my top three forecasts for what we can expect this year.
The 3PL and brokerage market will boost efficiencies with new technology.
Due to heighted competition and shrinking margins, new technology investments will become a priority for the 3PL and brokerage markets in 2017. Uber and Amazon’s entrance into the logistics industry will instigate margin compressions for the space.
Companies of all size will have to become more efficient to remain competitive. Normal gross margins will become significantly lower in the coming years. The only solution for offsetting lowering margins is by gaining efficiencies.
Old-school brokerage models will be re-evaluated and re-considered as automation further penetrates into the legacy processes utilized by brokers. Time-consuming tasks like pricing, booking and tracing will require far less human management thanks to automation capabilities. This year will set the stage for optimum efficiencies with only remnants of traditional brokerage models remaining by 2020.
Dynamic start-ups will draw more attention from investors.
On the heels of a record-breaking year for investments, supply chain and logistics tech companies will see a spike in deals. The primary categories gaining momentum include: ecommerce logistics, freight and supply chain visibility, sensors/asset tagging, last-mile delivery, ERP, inventory management, trucking, and warehousing.
TMS vendors will adapt to offer more seamless multimodal offerings as multimodal transportation becomes the new norm.
The combination of transportation modes has resulted in many benefits, including lowering inventory and freight costs and optimizing lead times. Multimodal pursuits have taken priority as leading industry players seek solutions to the supply chain’s most complex issues.
This year, we’ll see more investments from TMS vendors in growing their TMS suites to accommodate global and multimodal optimization in one platform.
There are more predictions that can be made regarding what is in store for the supply chain. These are just a few highlights, but they are all areas where we will see the biggest impact in the immediate future. I look forward to seeing how these predictions come to fruition in the coming year and would love to hear your thoughts about any other changes we can expect in 2017.
Tommy Barnes is president of project44.