The value of the global logistics market is expected to reach $12,975.64 billion by 2027, with a CAGR of 6.5% from 2020 to 2027.
Surviving the past couple of years has been quite challenging for the logistics industry due to various whopping disruptions.
With changing customer expectations, technological breakthroughs, new entrants to the industry, the rise in e-commerce, and new ways to compete or collaborate, the industry players are trying to cope with everything.
Above all, the logistics industry is going through an unprecedented era of digitalization with evolved customer expectations. Newer technologies are enabling greater efficiency and bringing in a more collaborative approach in every aspect of the supply chain; thus challenging the logistics service providers (LSPs) to remain competitive in this constantly growing market.
Before we delve deep into the key areas where the logistics industry trends are setting in the years to come, let’s get a basic understanding of the major forces that are driving the trends.
Evolved customer expectations
With the increase in e-commerce like the individual customers, business customers are now expecting to get shipments faster, more flexibly, and with more transparency at a lower price. The argument is that when a small value product can be delivered within a day from one country to another at a minimum cost and with full visibility across the shipment, why it’s not possible for businesses?
Technological breakthroughs for automation
It has become clear by now for the logistics industry that ‘Digital fitness’ is the prerequisite for survival. Those who are not ready for investing in technology are going towards risk obsolescence. The industry has never thought of utilizing data where every small decision can be based by utilizing data. Latest technologies like AI, Machine Learning, Blockchain, Virtual cloud, and many others are changing the logistics modus operandi.
The rise in e-commerce business and startups
Start-ups are driving newer business models by offering newer technologies and providing quotes more quickly and increasing price transparency to enter the industry. Moreover, startups are not the only ones that are impacting the LSPs, e-commerce companies that are leveraging technology for delivery are also equally challenging the traditional logistics players.
Collaboration and standardization are the need of the hour:
There is a pressing need for collaboration and standardization with all stakeholders involved in the logistics process, especially in last-mile delivery. For traditional logistics players, operations in silos, fragmentation, and lack of consistency are a clear threat to their business and an urgent matter of concern to thrive in the competition.
So what are the logistics trends that could redefine the industry in the next five years and beyond?
All the disruptions revolve around a technological breakthrough in recent times. Let us discuss some of the technology driving forces that are pushing the logistics industry forward:
Artificial Intelligence and Augmented Intelligence
The logistics industry is witnessing more and more adoption of artificial intelligence (AI), machine learning (ML), and predictive analytics to streamline processes, accurate prediction, shorter delivery TATs, and enhance productivity. In the next few years, logistics companies are expected to integrate more and more AI & ML into the system, to reduce human intervention, and shipment speed, and increase efficiency, customer satisfaction, and data-driven decision making.
Adopting cloud-based systems and digital platforms
Logistics businesses will adopt more and more cloud-based systems and digital integration. This will allow logistics businesses to streamline their entire business operations and workflow on a single platform and provides real-time visibility, and better control over finance. Given the fact supply chain involves a lot of stakeholders and a digital platform is designed to bring in all the internal and external stakeholders on a single platform. Digital platforms will facilitate more integration, peer-to-peer connectivity and data exchange on a secured platform.
Real-time data and predictive analytics
Supply chain industry generates huge data and the industry has understood that if this data can be utilized properly it can bring huge benefits to the industry. There is a huge shift in providing customer service with real-time and tracking than ever before with the help of RFID chips and other advanced technologies. Now, with real-time analytics logistics companies can tell the real-time shipment status of their customers. With the use of more predictive analytics logistics companies can identify and anticipate disruptions, seasonal demand variations, etc. in advance for better decision making and increase productivity.
With the increased usage of blockchain technology all parties involved within a respective supply chain will be able to access the same information, potentially reducing communication or data transfer errors. The use of blockchain in the logistics industry will be used to reduce time on validating data and more time on enhancing faster and more economical delivery efficiency, increasing security, and data management. In addition, the application of blockchain technology will reduce errors, save costs, shorten delivery times, and enable fraud detection.
Enhanced efficiency in last-mile delivery
Last-mile delivery is always a complex and challenging job for logistics companies. Increased online shopping has further increased its importance due to the changing customer demand for the fastest delivery with complete visibility. The major breakthrough with the introduction of autonomous drones to deliver packages in the last mile will push the companies to focus on providing a personalized experience and reduce costs in the future.
At present, already autonomous vehicles are already carrying out operations under a certain level of supervision. And it is only a matter of time before these autonomous vehicles will be ready to deliver without any supervision. These autonomous vehicles are potentially safer, less expensive, eco-friendly, and easy to manage compared to manually driven vehicles.
We’ve overcome the worst phases of the global pandemic and considering the possibility of major disruptive events, the logistics industry will keep advancing by integrating newer technologies in the years to come to make their companies even more efficient.
The industry leaders are redesigning their logistics business to enter a new era, with new technologies, best practices, and standards to become future-ready to survive the unpredicted and extraordinary rugged road ahead.