The top 5 logistics innovations and trends
The logistics sector is constantly evolving and innovating. In this blog, we describe the top 5 logistics innovations and trends that will have (or are already having) an impact on shippers. What is happening, what impact could it have and how can shippers benefit?
1. Digitisation and big data
Data, data and more data. With digitisation in logistics and transport, more and more data is being generated. By archiving and cleverly analysing large amounts of data, patterns can be identified that were previously not possible.
For example, the impact of cargo operations on production operations and vice versa. There is often a tendency to seek improvements "locally", but they may in fact lead to additional problems or costs in another part of the operation.
With big data, it becomes possible to look holistically for improvements throughout the process.
Digitisation among logistics service providers, on the other hand, means they want shippers to submit orders directly into the logistics provider's system. This can be done manually in their customer portal or via a EDI or API connection.
The disadvantage of manual submission is that shippers lose track of their orders when working with multiple carriers (which is often better). EDI connections prevent this, but they require IT investment in setting up and maintaining connections. EDI connections also increase the barrier to switching logistics providers.
It is therefore important for shippers to also digitise smartly, for example by using a transport management system that enables simple digital handling of shipments while providing real-time visibility.
2. IoT (Internet of Things)
The rise of IoT will certainly generate more data and thus create opportunities. Connecting goods and systems makes it possible to monitor location and key (environmental) factors. This makes it easier for shippers, logistics providers and end customers to track shipments, for example.
For transporting goods that need to be conditioned or stored, temperature can be monitored, with alerts if anything goes wrong. In warehouses, connected devices can make it easier to locate items, warehouse bins and robots (see next section) for fast order picking and more accurate inventory management. However, the Internet of Things also increases vulnerability from a cybersecurity perspective.
3. Automation and robotics
In response to labour market shortages and the need to perform boring, arduous or dangerous tasks, automation and robotics on the rise, including in logistics. There are already several warehouses where order picking is done by robots. The use of drones is also being considered in warehouses, for example to quickly count or locate goods.
Drones are also being considered for last-mile delivery, especially in e-commerce, but regulations and practicalities (such as delivery to a block of flats) still stand in the way of widespread implementation.
When managing the transport of a shipment profile, more automation can be achieved by assigning transports to the "best" carrier based on rules. This enables further implementation of a "management by exception" strategy, where staff need to focus less on the "whirlwind" of daily exceptions and more on systematically executing a smart strategy.
4. Risk management
The COVID-19 crisis, the grounding of the Ever Given in the Suez Canal and the rising energy costs resulting from the war in Ukraine have clearly demonstrated the impact that major disruptions can have on supply chains and logistics.
As a result, companies are reconsidering their supply chain strategies, often with logistics innovations at the forefront. Local production and less transport versus cheaper production on the other side of the world, and ensure robustness in both inbound and outbound flows.
"To avoid complaints about our service, we no longer provide service," a sign in a restaurant once read. Funny, but with a kernel of truth. Shippers are increasingly faced with reduced customer service from logistics service providers, who now require shippers to handle shipment registration in their own systems.
This approach reduces the logistics provider's risk of errors and also saves costs. While cost reduction is beneficial for shippers, it results in loss of oversight and higher costs on their side (management of multiple portals, integration of information). By having their own transport management system connect with carriers' systems, both problems can be solved. This reduces the risk of errors and enables faster and more efficient operations for both shippers and carriers.
5. Sustainability and greening
Last but not least, sustainability and greening are key trends in logistics innovations. Consider the development of greener (zero-emission) vehicles, such as trucks and barges running on hydrogen or electricity. For marine vessels, several innovations are being explored, such as "Flettner rotors" or "wing sails" that use wind to reduce fuel consumption. Work is also under way on new materials that are carbon-negative, for example by CarbonX.
Besides circular manufacturing and requiring fleet renewal from carriers, shippers can contribute directly to transport sustainability. Transport management systems provide ever-improving information on distance travelled, as well as opportunities for consolidation of shipments and more sustainable deliveries to customers.
Conclusion
Digitalisation, automation in various forms and sustainability are the main drivers behind today's logistics innovations, and these objectives are becoming increasingly intertwined. It is no longer a choice between economic growth and sustainability, but rather a combination of both.
These innovations include both physical aspects, such as clean vehicles and new warehouse systems, and software-related aspects, such as data analysis, transport management systems, planning systems and systems integration.
If you want a no-obligation discussion about the most relevant logistics innovations for your business and the opportunities and risks they bring, Then feel free to contact us.
