Global Trade's Annual Logistics Planning Guide Reveals the Year's Top Trends - Global Trade Magazine
  January 15th, 2020 | Written by

Global Trade’s Annual Logistics Planning Guide Reveals the Year’s Top Trends

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  • The biggest benefit of AI is arguably its ability to automate many of the processes logistics providers provide daily.
  • Indeed, blockchain has become so big that an organization has been founded to monitor the industry.
  • In the maritime sector of the logistics industry, one revolutionary service that is “making waves” is TechnoMax.
  • 2020 is set to be a big year for reducing carbon emissions.

Sometimes buying your business into the latest trends isn’t the best idea. Saddled with high costs and incompatible programs, trendy new technology can often make business processes more difficult for your business, not less. But there are some industries where the latest really can be the greatest, and one of those industries is the logistics industry.

Let’s face it: Logistics make the world go round. Whether it’s shipping perishables to community markets or lifesaving machinery to medical clinics, there’s a lot riding on the shoulders of logistics providers. That’s why it often pays to rely on cutting-edge technology. From tracking and tracing to locating items in your warehouse, new technology can often get the job done faster and more accurately. Plus, with the growing e-commerce market, logistics is more important than ever before as businesses push to get their products into customers’ hands at the speed of retailers such as Amazon.

So, what’s on the horizon for the logistics industry this coming year? Here’s what’s on our radar—and should be on yours—for the best (and one troublesome) new innovations and trends in logistics in 2020.

LOGISTICS IT

When it comes to logistics, information technology (IT) may arguably be the most important innovation of 2020. That’s because without a solid tracking system in place you’re not only causing potential backlogs for your workers, but you could be causing frustration for your clients, too. After all, if your customer can’t see where their merchandise is in the supply chain, they may bring their business to someone else who can. This is where an excellent Warehouse Management System (WMS) comes in. Using RFID and GPS, warehouse management systems can now monitor and trace every piece of inventory in your warehouse, providing real-time data to both you and your customer.

Other systems expected to be used with increased frequency in the new year include order entry systems and transportation management systems (TMS).

But logistics IT isn’t just what the customer sees, or even what your employees interact with. It goes well beyond that. Logistics IT also encompasses the back end of your IT solutions—not just the IT product itself but also the customer support that goes along with it.

We all know the logistics industry doesn’t just run from nine to five. When there’s a problem like a software bug or outage, is your IT provider available to offer technical support when you need it? Does your provider strive to make software updates that are meaningful to your business, and that integrate seamlessly into your other systems? Does your provider notify you when there are new versions of your system that could benefit your business? These are all signs of a good IT provider—a trend you definitely don’t want to miss the boat (or train, plane or truck!) on.

Logistics providers are using the latest technology, such as Collaborative Planning, Forecasting and Replenishment (CPFR) and Vendor Managed Inventory (VMI), to satisfy ever-changing customer requirements. DHL Express introduced a fresh TC55 technology that works on the Android platform and is simple to use, as well as the navigation skills in the global positioning system (GPS).

ARTIFICIAL INTELLIGENCE AND MACHINE LEARNING

Artificial intelligence, or AI, is another way technology is streamlining the logistics industry. Currently, the biggest benefit of AI is arguably its ability to automate many of the processes logistics providers provide every day, including repetitive tasks that exhaust human capital and don’t challenge workers. Though many workers worry that AI will someday replace human workers, currently the technology is actually assisting them.

Another use for AI in the logistics industry relates to the driving of vehicles. As many are aware, initiatives from companies like Google have in recent years invested time and resources into developing self-driving cars, i.e. autonomous vehicles. These vehicles may be manned by a human driver, but they allow the driver to take breaks from driving while still traveling. This in turn gets deliveries to their destinations quicker, a fact that is projected to save logistics providers a lot of money. In fact, according to Mckinsey, autonomous vehicles could save logistics providers up to 45 percent, a savings providers can then pass along to their clients. These savings could then be passed to the consumer in the form of lower prices or lower shipping rates.

ENVIRONMENTALLY CONSCIOUS LOGISTICS

With many seaports developing green initiatives and land- and air-based logistics providers initiating a greater push for a reduced carbon footprint, 2020 is set to be a big year for reducing carbon emissions. Some land-based initiatives include more efficient route mapping, video conferencing and net-zero emissions.

Route mapping works by eliminating excess travel on longer routes. The idea is that a more direct route cuts fuel waste as well as carbon emissions. Video conferencing saves both money and the need for travel to meetings. As for net zero emissions, many logistics providers are investing in low or zero-emission vehicles and alternative fuels that emit less carbon into the air.

Logistics companies with warehousing services are also increasing their push toward a lower carbon footprint, using sustainable packaging and ramping up recycling efforts with the packing, shipping and packaging of products.

Maritime initiatives include the restoration and protection of wetlands as well as the planting of trees at some ports. Strategies also include the use of more efficient photosensitive lighting, such as the switch to LED lighting. Some ports have even switched over to the use of electric equipment instead of diesel fuel equipment, the establishment of fuel efficient requirements for ships which frequent the port and much more.

BLOCKCHAIN

If you’re in the logistics world, you’ve likely been hearing about blockchain for several years now. But what is it? Simply put, blockchain is a way of recording data which cannot be altered, using a technology called cryptology. Blockchain data is nearly unchangeable. The “chain” in blockchain refers to the chain of messages that originate from a single entry. To edit the chain, all members who posted to the chain must be willing to alter their own data to support the potentially edited data. This reduces the risk of that data being falsified or otherwise compromised along the way.

Blockchain data can be used to do everything from order tracking to payment issues. Blockchain also streamlines the way we communicate, reducing the need for time-consuming paperwork. Blockchain works in real-time, so shippers can trace every detail of their shipment as it progresses and make necessary adjustments to their route and load temperatures as needed. This can save time and money, preventing delays or rejected shipments.

Blockchain can also aid in financial decisions regarding fleet vehicles. Similar to a Carfax report, blockchain can show whether a pre-owned logistics vehicle has been maintained as well as the previous owner claims, and can help the potential buyer make decisions that could cost them—or save them—significantly down both the literal and figurative roads.

Indeed, blockchain has become so big that an organization has been founded to monitor the industry. The Blockchain in Transport Alliance, or BiTa, was founded to help advance the Bitchain industry, developing rules and regulations and providing education for new and veteran Bitchain users. The organization already boasts an impressive member list, including representatives of UPS and FedEx.

TECHNOMAX

In the maritime sector of the logistics industry, one revolutionary service that is “making waves” is TechnoMax, or TMX. TechnoMax works to streamline maritime operations by working with AI and the Internet of Things (IoT). The system provides risk and compliance data, app development, infrastructure development and data management. Some of TechnoMax’s capabilities include monitoring a ship’s emissions, analyzing cargo information and guiding navigation.

TRADE TARIFFS

Now for some bad news. With trade deals between the United States and China again delayed, there remains a lot of uncertainty among retailers and manufacturers. Though there is no crystal ball to predict the future or what it holds for these industries, the potential for raised prices on goods is of big concern. Price increases would inevitably be passed down to consumers, who could cut out or cut back on goods, causing sales to plummet. This could in turn negatively impact the logistics industry, as fewer products will be warehoused and transported.

For now, the industry seems to be holding its own, with some businesses preparing for the looming tariffs by shipping larger amounts now to avoid elevated costs later. Whether this bulking up will cause a dramatic drop in shipments in the first few months of 2020 remains to be seen.

LOOKING TO THE FUTURE

All things considered, 2020 seems to be gearing up to be a great year for the logistics industry, with many new technological and environmental advances on the horizon. From AI to blockchain, the industry is poised to become more efficient than ever, saving providers money which they can pass along to their clients, and in turn potentially to the consumer.

Even with the potential for steep tariffs on China (and vice versa) on the horizon, these positive advances should still make an impact on the industry in the coming year and decade.