Over the last few years, logistics has gone through a massive transformation due to changes in customer demands and technological innovations. Companies need to deliver their products faster than ever before, at a low cost, in a sustainable way. Rapid changes, new demands and the growth of e-commerce are forcing shippers and carriers to build better relationships to optimise their operations.
Let’s take a look at some of the key logistics trends for 2020 and beyond.
The digitalisation of logistics operations has already started and will continue to reshape entire businesses in the coming years. But the transformation is happening at a slow rate compared to other industries. According to a survey conducted by Gravity, 46% of the respondents still describe their supply chain as manual (paper-based) and only 19% say they are digitised (meaning they have a core structure of digital capabilities). Going digital will have a great impact on your business and day-to-day routines. You will get a more dynamic supply chain with better control and visibility. Digital logistics enables you to make better and faster decisions in addition to more seamless collaboration with your partners. This is essential if you want to stay competitive.
With digitalisation comes supply chain visibility. To meet the demands of the customers, you need to know where the goods are at any given time. According to a report from EFT, approximately 90% of European supply chain professionals state that visibility will be one of their top investments in the years to come, together with cost control. According to another survey, 71% said that the lack of visibility is hurting their business and have a negative impact on their supply chain. If you don’t have end-to-end visibility, it is impossible to respond to unexpected events and make the right decisions. Not to mention, it makes collaboration between partners difficult. In fact, 80% of the supply chain happens outside of your own company. How will you be able to ensure quick and efficient delivery with only 20% visibility?
Linking this real-time visibility to business processes, decision making, and forecasting, will have a huge impact on the efficiency of your supply chain. Full visibility with real-time updates is the way to maintain a competitive advantage in the future.
The "parcel" market is changing rapidly and so does the size of the freight, now that anything can be ordered online. According to Cerasis, there is an increasing volume of less-than-truckload shipments (LTL), which is a shipping service for relatively small loads or quantities of freight. LTL shipments are expected to grow more than 5% in the coming year.
Smaller packages opens the door for more consolidation. The more companies consolidate together, the cheaper it gets. Trucks, ships or planes for that matter travel around the world today with low utilisation rate, often in the efforts of minimising inventory. Shipping air is an expensive thing to do, so companies need to pay more attention to consolidation in the future if they want to reduce their costs. This will also have a positive impact on the environment because of better resource utilisation and increased fill rates. Which brings us to another important trend in the years to come: more sustainable logistics operations.
Logistics accounts for 11% of global emissions. 8% of that is caused by freight traffic (truck, ship, train, plane ). The increasing focus on sustainability is driving companies to integrate sustainable development goals into their business to lower their carbon footprint.
Players in the field need to work together in order to utilise the resources available. Better vehicle loading can substantially reduce the energy demands of logistics. Companies have a responsibility to look into their own logistics operations and evaluate changes that can be done, both on long-haul transport and urban freight, and open up for more collaboration. Companies will also get stronger reputation and increased customer loyalty by integrating green logistics. A win-win situation for all parts!
There is no doubt that in order to meet all the changes in the market, we need to go digital. Digitalisation will continue to shape the future of logistics in the coming years and is a necessary step towards more efficient and sustainable logistics operations, in addition to increased customer satisfaction.