Modern transport and logistics is undergoing radical transformations and is becoming increasingly complex, with the emergence of futuristic technological solutions. This economic segment is undergoing significant socio-politico-economic, technological, environmental and legal transformations. Ergo, it is becoming more confusing by the day to decide the short term and long term focus areas, and where to invest in. The following is an attempt to pinpoint the chief factors transforming the transport and logistics segment.
1. Supply Chain Collaboration
Today supply chain generates a lot of buzz; companies using cutting edge technology to achieve enhanced collaboration across the supply chain are definitely enjoying massive business advantages. Some of them are:
- Up to 35% reduction in cost
- Carbon footprint reduction by 50%
- Forecast precision increased by up to 25%
- Inventory reduction by up to 20%
- Heightened adherence to SLAs – in some instances, close to 100%
- Administrative staffing reduction by up to 10%
- Improved level of service, and increased customer satisfaction.
2. Movement from B2B to B2C
So far, B2C or business to customer, and B2B or business to business, have been kept separate in the realm of logistics. With e-commerce seeing a phenomenal growth, consumers are able to track the movement of their shipment, sometimes even with a destination change during product movement. This experience, combined with the induction of fresh talent in businesses is creating new requirements in B2B logistics operations. B2C is one of the most trending business models in logistics and transportation; and it is more transparent, sustainable, efficient and flexible.
B2C (business-to-consumer) and B2B (business-to-business) have currently been kept separate when discussing logistics. With the growth of e-commerce, consumers (in B2C operations) have been used to being continuously informed about the movement of goods, even with the possibility of changing the destination while the product is moving.
3. Green Logistics
Several logistics companies are moving towards sustainable development goals in their business with a view to reduce the carbon footprint of transportation and supply chains. The advantages of making sustainability part of the supply chain management approach are:
- Bolsters the reputation of the company
- Reduced cost of supply chain
- Grater innovation in processes and products, creating more sources of revenue
- Enhanced customer loyalty
4. Elastic Logistics
Elastic logistics, an innovative concept in logistics, refers to the capability of expanding and shrinking logistics capabilities. This capability enables alignment with demands of a given situation in a logistics op. Logistics companies are empowered to withstand market fluctuations with flexible solutions powered by the cloud that enable supply chain integration as well as visibility. Timely delivery and reduced costs are two of the biggest advantages of elastic logistics for companies; and this can be achieved despite increased demand. Other benefits include:
- Enhanced customer experience
- Inclusion of supply chain visibility in real time
- Connecting business processes
- Rendering scalability and agility
5. Digital Logistics
Elastic logistics is not possible without digital logistics. Digital supply networks – this is the way forward for an industry that has not yet achieved efficiency. Experts feel there will be a huge push towards digital and moving away from paper based procedures as well as outdated legacy systems. Digital logistics benefits include:
- Greater innovation
- Development of new products
- New revenue sources
- An interactive, secure and dynamic supply chain
- Greater access to information and data in real time
- Informed decision making
- More efficient operations and processes
- Improved collaboration, visibility and control
- Quicker and better response to market conditions
- Planning and execution capabilities are faster and better
- Quick time to market
- Enhanced customer service and increased customer satisfaction
Greater digitization is likely to be seen in higher proliferation of AI, Blockchain, Predictive maintenance and drone supervision, Robotic Process Automation, and so on.
6. Shifts in International Trade
These shifts are already visible through an increasing amount of land transport moving from China to the EU. The transport corridors between these regions have increased thanks to the Belt and Road Initiative, along with other connections of upcoming economies that are believed, will experience growth in the near future. These developments are expected to reduce transport costs, as well as create new services. Business opportunities that are likely to emerge:
- Highways, railways, telecommunication hubs etc. located along the transport corridors will be modernized
- Business regions hitherto inaccessible or unpopular due to high logistics costs, will become more accessible
- New trade agreements that transform trade profitability on certain routes
- New market trade flows that enable large scale services to be provided
- Adjusting strategies of supply chain to gain from reduced cost and delivery time
These are not by far the only trends that are emerging for this year. We are already approaching the end of the first quarter in 2019, and we are likely to see more trends emerging as a consequence of the various factors that impact this industry.