The world the logistics industry is operating within is increasingly complex. Supply chains operate on a global scale and therefore have to rely on multiple parties to be able to fulfill their role while dealing with external factors. Price sensitivity, inflation, tightening competition, new regulations and changing customer needs with reduced customer spending power muddy the waters of success.
In the current combination of factors logistics are managing, these are three trends driving development in the logistics industry.
Increased digital management
With uncertainty on a global scale that could create bottlenecks in supply chains, greater flexibility and visibility are required. This can be achieved through increased digital management, not only real-time data reporting but real-time decision-making to avoid backlogs as much as possible.
The technology exists to support intricate digital management, namely Transport Management Software (TMS). It provides advanced capabilities that enable free-flowing data, real-time reporting, predictive analytics to avoid issues and AI-assisted decision-making to efficiently respond to detected issues.
As every party in a supply chain needs to share their data and access the data of the other parties for full visibility and flexibility at all stages, a secure but accessible way of sharing the data needs to be found. Blockchain could be the best solution for data sharing, meeting the needs of both transparency and security, especially as investment in blockchain solutions grows with companies predicted to spend $11.7 billion on it worldwide.
With advanced data sharing creating a detailed and accurate picture of supply chains, it also enables changes in the way of working to improve flexibility. For example, the solution of Less Than Truckload (LTL). With open data sharing, different parties can collaborate for improved flexibility. If multiple parties have orders that are less than a truckload that they are waiting to transport, they can share the same truck and schedule numerous delivery stops for better speed, efficiency and cost-effectiveness.
Attracting the right talent
There is a chronic shortage of workers within logistics. So the industry is having to make changes to attract and retain talent in key areas including drivers. One way of doing that is by reducing the need for long-distance journeys which are less appealing to potential drivers by implementing more relays. As well as improving work conditions as drivers aren’t away from home for as long, relays can reduce delivery time by 50%. It’s a more efficient and employee-centric approach to transporting goods long distances.
Introducing semi-autonomous vehicles could also take pressure off drivers during long journeys. The future of logistics is for people to work alongside machines that ease and improve the job. That being said, workers need the skills to be able to use technology to its full advantage. Therefore, implementing training programs can ensure companies have the right skills and increase job attractiveness and employee retention.
Training opportunities and technology-driven workforces could attract employees outside of the average employee profile. In America, the average age of a driver is 55 and only 6% of commercial drivers are women. Appealing to young people and women by changing the perception of driver and warehouse jobs could help resolve the labor shortage that causes delays and restricts development within logistics. For example, The Renault Group has a ‘staff leasing’ program to attract the younger generation. It’s a permanent contract that allows them to work in different warehouses on different tasks while attending off-site training.
Tangible progress in environmental sustainability
Promises around fighting climate change have been part of conversations for many years. However, now is the time to see commitments turn into action, especially considering the sustainability goals set by regulators require major change. For example, the European Union requires a 55% reduction in total greenhouse gas emissions compared to 1990.
As well as regulatory pressure, there is consumer pressure as more customers demand transparency in the supply chain to be reassured their products are sourced in a socially and environmentally responsible way. So, how will logistics create tangible progress in their environmental impact?
Organizations within logistics are being challenged to set more ambitious goals for reducing their negative environmental impact. Instead of setting goals according to what is known to be possible now, they should be future thinking and set goals with the belief that capabilities will develop to meet goals.
Alongside the development of electric trucks and commercial transportation, digital management could support greater environmental efficiency as processes are closely tracked to be able to identify areas for improvement. A more energy-efficient way to transport goods can be found as AI, ML and supportive technology optimizes routes for fuel, time and load efficiency. Adjacent technology can be used to evaluate what can be done to improve yard processing as well so warehouses don’t become blockages in the chain of transport.
Environmentally-focused innovation is also happening within packaging, enabling logistics to safely transport products without creating unnecessary waste. Following circular economy principles, single-use products can be replaced with reusable, recyclable or biodegradable alternatives.
The logistics industry is facing a unique set of challenges. The companies that come out on top will be those that monitor external factors driving change and start to make internal adjustments. The sooner action is taken, the sooner they can leverage the growth opportunities of digitization, job attractiveness and environmental sustainability, resulting in a better logistics industry for all.