Supply Chain Predictions 2022: Growing Investment in Delivery Technology
The world’s supply chain issues will be alleviated by rapid, wider adoption of logistics solutions and technological advancements in 2022. Though the supply chain crisis will continue to challenge the shipping and delivery industry in the coming year, companies must look past short-term mitigation strategies and invest in long-term solutions with greater potential to materially impact key crisis drivers.
I predict these technologies, paired with companies’ willingness to adapt their operations, will help global economies rebound from the pandemic, navigate bottlenecks and meet relentless consumer demand.
Mounting Challenges Require Flexible Solutions
In 2022, supply chains need to remain flexible, agile and adaptable in order to overcome the industry’s substantial challenges:
Consumer Demand: Consumers’ demand for fast, free, flexible shipping will grow in 2022 as online penetration increases in retail markets. Shippers and carriers that can best address these demands will maintain a competitive advantage over those who cannot. Retail giants like Amazon, Walmart and Target set the shipping and delivery standards that competitors must also provide in order to retain customers.
Supply Chain Bottlenecks: Supply chain bottlenecks, like those widely publicized throughout 2021, are expected to continue through the first half of 2022. The pricing of container rates, especially those servicing transpacific routes, will continue to rise.
Driver Shortages: The American Trucking Association estimates the U.S. shipping and delivery industry is short approximately 80,000 drivers. This limited capacity deeply impacts companies’ abilities to meet increased delivery demands.
Technological Advancements, and Investments, Will Alleviate Crises
Key players in shipping and delivery should consider investing in technology enabling them to adapt quickly. Many businesses have already adopted new software to help them overcome supply chain challenges, and even more are expected to take the leap in 2022. Billions in funding have poured into logistics technology startups as investors capitalize on the opportunity to improve supply chains.
The following technological advancements will spur progress in the shipping and delivery space in the coming year:
Logistics Solutions Offering Visibility and Orchestration: Logistics software and technology will grow in popularity and integration, with a particular interest in platforms offering Real-Time Transportation Visibility (RTTV) and delivery orchestration solutions as shippers and carriers seek to optimize their supply chains. RTTV also allows companies to provide customers with tracking updates that enhance their experience and strengthen their brand relationships.
Artificial Intelligence (AI) and Machine Learning (ML): Platforms utilizing ML and AI will be a major focus for companies investing in technology, as they allow shippers and carriers to quickly spot problems (like goods shortages or port congestion) and take action earlier when they arise. This enables companies to maintain an exceptional customer experience. In addition, leveraging AI to identify opportunities creates more efficient delivery routes, which saves time and money, and empowers companies to make more deliveries with a finite labor pool.
Predictive Intelligence: Predictive Intelligence will become more popular and more important in 2022. Leveraging historical route and shipping data, machine learning technologies can generate more accurate ETAs and trigger alerts to delivery stakeholders if there is a significant, unexpected delay. ML and predictive intelligence can optimize supply chain operations, discover opportunities for efficiencies and support rapid scaling.
Autonomous Deliveries: In 2022, we will see increased adoption of autonomous technologies such as drones and autonomous delivery trucks. These reduce costs and delivery times while alleviating labor shortage pressures.
Non-Traditional Fulfillment Will Be Key
Of all elements within the shipping and delivery industry, fulfillment is the area likely to experience the most change in 2022. I expect to see large advancements in omnichannel fulfillment. Many more businesses will embrace non-traditional fulfillment options such as curbside pickup, parcel lockers, dropshipping (D2C shipping), pop-up distribution centers and dark stores. These give shippers and carriers more flexibility, allowing them to adapt to demand surge and capacity shortage.
Increased Focus on Sustainability
Rising consumer demand means rising carbon emissions as companies race to deliver goods. The supply chain’s impact on the environment is of growing concern, and more companies have committed to investing in sustainable solutions. In 2021, logistics and delivery management platforms enhanced their sustainability functions, adding features that measure carbon emissions and optimize operations to support sustainability efforts. In 2022, this will accelerate as businesses will take more significant steps toward reducing their carbon footprint, including prioritizing more efficient routing and using electric vehicles.
The year ahead is filled with challenges and opportunities for shipping and delivery businesses worldwide. Their success relies on their adaptability and investment in the right tools to get the job done.