The logistics and supply chain is continually evolving in ways to get materials and products from origin to destination more quickly and more efficiently. What ongoing trends do we expect to see continue through 2022 and beyond? Let’s take a look.
1. Automated Vehicles & Equipment
In just recent memory the concept of automated vehicles or robotics were the things of science fiction and researchers testing out high concept hypotheses. Today, automated vehicles and robots are available to many organizations of varying size.
Beyond 2022, it’s almost certain that autonomous vehicles and equipment will maintain its position as a leading trend in the logistics and supply chain sector. What type of equipment are seeing the greatest amount of automation?
Automated Storage & Retrieval: This includes robotic order picking systems, which have proven to do the work at faster rates than humans and more safely.
Automated Trucking: Some experts expect widespread automated trucking to take hold before self-driving cars. Over the past 5 years, investment in this sector has exploded from just under US$1 billion to $5.6 billion.
Delivery Automation: Delivery drones are the dream last mile automation being pursued by a few companies. Starship Technologies completed 2 million deliveries in 2021 using six-wheeled drones while Amazon continues to pursue flying drone deliveries.
2. Cloud Technology
Cloud technology in logistics isn’t new, but the COVID pandemic has pushed companies to adapt and implement cloud technology in their practices.
Recently the cloud technology sector has seen a compound annual growth rate of nearly 20%. This has been led by big data, digital transformation, and the adoption of 5G technology. AI and the internet of things (IoT) will further push cloud technology into the coming years.
3. LMaaS, or Last Mile as a Service
Customers are wanting faster and more accurate deliveries at lower and lower prices. Large brands such as Amazon can meet such demands while smaller companies are forced to keep up to survive.
However, LMaaS is not yet strongly established and different models are popping up, with some disappearing quickly.
On-demand crowdsourcing, the Uberization or AirBnB-ing of delivery is seen as a potential revolutionizer. However, the model has its difficulties in non-urban areas.
Other larger brands like Walmart are offering their own white label delivery services. Theoretically this helps smaller companies, but the same service also acts as a competitor to existing businesses in the logistics sector.
4. Continued Focus on Sustainability
This is a trend we’ve been hearing about for years and will continue to do so for years to come.
It’s an undeniable reality that the logistics industry will come under scrutiny to increase energy efficiency and decrease carbon emissions.
EV trucking appears to be the strongest candidate for increasing sustainability. The challenges to maritime shipping are more complex and will likely take more time to resolve.
5. Optimizing for Reverse Logistics
As even the smallest businesses serve a global customer base through ecommerce, the challenge of handling customer returns will remain a focus.
There are a few challenges to the reverse logistics process. Businesses need to be able to predict which items are likely to move backwards though the supply chain so companies can minimize any losses. However, it’s also important to be confident that the returned goods aren’t lost in the process.
6. Circular Supply Chains
This is a topic that’s closely related to sustainability. A circular supply chain is when goods that flow in the reverse direction can be resold, reused, or recycled. Then if this cycle is repeatable, a circular supply chain has been created.
Circular supply chains aren’t a reality yet because we need to develop the infrastructure needed to make them feasible. However, this is a trend that you can expect to see for the long-term.
7. Cross Docking Facilities
Cross docking is the practice of transferring goods through the use of a cross docking facility. The cross docking facility is a temporary storage terminal where incoming goods are sorted and loaded onto outbound trucks as quickly as possible.
The use of cross docking facilities is an industry growth area that is cutting storage costs for shippers. The demand for faster deliveries by consumers is what’s driving the cross docking market.
Cross docking reduces costs, improves stock turnover, and minimizes risks. However, too few carriers can lead to a cross docking failure, complex shipping schedules must be managed, and strong inventory management technology is a must for cross docking to work.
8. Supplier Relationships
We’re all familiar with customer relationship management, SRM, or supplier relationship management is the B2B equivalent.
Competition is as fierce as ever and there’s no sign of competition easing. Supplier relationships are a practical step any business should take to protect themselves from a startup disrupting the industry or a huge brand extending into your market.
Supplier relationship management means working with suppliers to develop solutions and reduce costs, share information in an effort to optimize, and look for ways to increase sustainability.
9. Local Expansion
The frequency of disruptions and continued uncertainty over global supply chains has pushed many companies to focus on the local market.
Businesses are choosing to source locally to minimize risk due to economic or political events, increased control over delivery times, reduction of carbon emissions, and improved brand presence in the local community.
10. Omnichannel Retail
Retailers and other businesses are becoming “omnichannel”. What does that mean exactly? It means that their goal is to offer customers a seamless experience between the store, online, or via mobile.
Some logistics companies are having difficulty keeping up. However, that’s because they’re resistant to the need to digitally transform. The supply chain must be able to manage multiple customer channels, prepare fulfillment models, provide payment options, and integrate facilities.
What to Take from This?
The things to remember for the coming years is to focus on optimizing processes, increasing efficiency, and building relationships that matter.
Not only in 2022 but the coming years will see strong, adaptable supply chains survive while those who are slow or resistant to digitize will languish and fall behind their competitors.