5 Logistics Trends to Watch in 2019
Brian Hoey - June 27, 2019
The practice of trying to get the right goods to the right place at the right time in the right condition is virtually as old as time—and yet, each year, new trends, ideas, and best practices emerge in the fields of logistics and supply chain management. With the rise of digital technology and increased connectivity across the supply chain, the current rate of change in these fields is unprecedented. The world of logistics even 5 to 10 years from now will probably have undergone even more dramatic evolutions, and it may be virtually unrecognizable compared to the supply chains of the past.
If you’re both excited and a little daunted by all of these emerging changes, you’re not alone. Luckily, by keeping a close watch on logistics trends as they unfold, you can prepare yourself to take advantage of them and gain new areas of expertise as a business. Here are a few of the trends you should know about for the rest of 2019 and beyond.
1. The Rise of B2B2C
Thanks in large part to paradigm-shifting global e-tailers like Amazon, the binary between B2B and B2C is beginning to break down. What this means for logistics in particular is that it’s becoming more and more common for products purchased through a third party to be shipped directly to the consumers by the manufacturers themselves—bypassing the third party’s warehouses and distribution centers entirely. On the one hand, this can be a stepping stone to more streamlined, optimized shipping. On the other, it presents logistics planners with greater complexity than ever before, owing to the increased number of potential destinations for shipments. This means that the need for effective tracking and reliable visibility throughout the entire value chain will only increase as direct-to-consumer shipping routes proliferate.
2. Continued Evolution in the Last Mile
Ah, the last mile—one of the thorniest problems in effective logistics management. Every year it seems like we’re about to replace vans and other traditional means of completing deliveries with drones or self-driving cars, but by and large the industry continues to solve this problem with the same material resources as ever. That said, the introduction of things like IoT (internet of things) devices and RFID chips into trucks, vans, pallets, containers, etc. is increasingly giving transport planners the visibility they need to remain agile and adaptable in last-mile situations. Where, once, a traffic jam or a van breakdown would have presented a real risk of making on-time delivery impossible, a modern planner in the same situation might be able to re-assess traffic in real-time and suggest an alternate route. More than that, our hypothetical planner might be able to find a new way of combining cargo on the fly, arranging an exchange between two vehicles in similar geographic areas in order to take advantage of new conditions as they emerge. Ultimately, the more things like advanced analytics and machine learning become commonplace, the more shippers will be able to optimize last-mile logistics with creativity and outside-the-box thinking.
3. Increased Multimodal Shipping
Of course, the increased focus on the last mile is really part of a broader trend in logistics: the increased use of multimodal shipping routes, i.e. routes in which goods switch from one means of transportation to another (say, from truck to container ship) over the course of a journey. This has been a response not just to the increased complexity of the global value chain, but also the increased connectivity within global logistics. The more effectively you can visualize all of your options when it comes to transporting goods, the more easily you can identify non-obvious solutions that might help to reduce costs or speed up delivery-times. This obviously comes with an increased element of risk relative to relying on better-established routes, but strong supply chain visibility and integration can go a long way toward mitigating that risk.
4. Sustainable Supply Chains
Logistics providers have been searching for ways to increase efficiency since the dawn of time. Generally speaking, this has been fueled by a desire to reduce costs, but going forward it may dovetail with another interest—improving sustainability. As measures directed at counteracting climate change gain traction, there will be a continued push towards the use of more sustainable fuel sources in shipping and an equivalent push to shorten the distances that goods need to travel in the first place. By gaining a handle on factors like these and treating them as KPIs to be tracked and understood, it’s possible for shippers and freight forwarders to gain a competitive advantage over those who aren’t as adept at tracking their carbon footprints. Especially as the rules on things like CO2 emissions become more and stringent, the ability to offer emissions optimization in additions to route and cost optimization will become a major selling point.
5. Data-driven Logistics and Logistics 4.0
If there’s been a common theme among all these emerging trends, it’s this: that logistics planners increasingly need to be able to collect data from disparate sources on the value chain and leverage that data into smarter decisions, whether that’s with regards to last-mile optimization or sustainability. This isn’t just a coincidence—rather, it’s an overarching logistics trend in and of itself. As data and data analysis become more important and more commonplace, we’ll start see the rise of Logistics 4.0 in earnest. This will mean a smarter, more connected, more responsive supply chain that more effectively integrates with Industry 4.0 manufacturers.
While it’s difficult to predict exactly what a fully Logistics 4.0-enabled supply chain could look like, it’s safe to say that it will offer more responsive and agile transport flows than ever before. Supply chain planners will be able to leverage more accurate forecasts to better meet demand, and will respond to disruptions more quickly and efficiently than ever. How can you be sure that your business will thrive in this increasingly-digitized environment? For starters, you can work to create data transparency across your entire value chain. From there, you might work towards increased supply chain integration. In this way, you can position yourself to take advantage of new technological paradigms as they emerge.
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