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The COVID-19 crisis has without a doubt become the most disruptive global event of our time. However, much of what’s come out of the situation has been favorable for businesses, supported in no small way by logistics and technology.
Transformation in Logistics
To make supply chains more efficient, digitization has ramped up, along with automation and mechanization. Fortunately, logistics was an early tech adopter, leveraging blockchain, RFID, IoT, and artificial intelligence (AI) to support more sustainable, cost-effective operations while enabling growth at scale—a fortuitous environment considering the events of the past year.
As the pandemic took hold, ecommerce saw the most significant gains, marking 44% growth in 2020, which, for context, is three times that of previous years. Port restrictions, tariffs on certain goods and raw materials, and trade embargos further complicated supply chain issues, forcing carriers and logistics companies to adapt
But not all 3PLs were immediately equipped to handle the surge, resulting in a cull of Darwinian proportions. However, organizations that had completed their digital transformation were in a strong position and have been able to support businesses of all stripes in succeeding against all odds.
Seven Global Logistics Trends to Watch in 2021
As the digital transformation of logistics comes into its own, here are some trends to watch going forward.
1. Outsourcing. Small businesses rely on outsourced logistics to grow and reduce risk. Beyond shipping and freight forwarding, there is a strong preference for 3PLs that can supply end-to-end services, from real-time tracking to warehousing, last-mile, returns, and more.
2. Analytics. Historical trends went out the window with COVID, making forecasting inventory needs a challenge. Going forward, AI and machine learning will be critical to predict future needs, although volumes need to stabilize into a pattern before that happens.
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3. Sustainability. There was a lot of movement around sustainability before the pandemic, but pressing needs put these discussions on the back burner. Going forward, expect to see a strong focus on environmental matters to reduce carbon emissions and mitigate harm to marine populations. Emerging solutions that support these efforts include 3D printing, alternative fuel sources, and cradle-to-cradle product development.
4. Electric and Autonomous Vehicles. We could easily place this point in the previous category, but it merits its own heading. The movement toward battery-driven vehicles is ramping up, as is the introduction of autonomous trucks and drones, all of which play into the industry-wide sustainability focus.
5. Nearshoring. As overseas supply chains continue to be challenged, companies will look to nearshoring to mitigate inventory disruption. 3PLs will rely on technology and lean network design to offset cost increases in warehousing and associated labor.
6. Real-Time Monitoring. Supply chain visibility is a priority in logistics. Even before the pandemic, many companies became global players by improving inventory management, quality control, accuracy, and customer service through every link in the chain.
7. Cold Chain Logistics. As COVID vaccines roll out, cold chain logistics continue to present complexities unlike any we’ve seen before. Issues of scale, variable distribution models, and urgent timelines are just some of the challenges we face and will continue to face until we settle into a stable rhythm.
In conclusion, logistics companies must embrace digitization on the road ahead. Connected supply chains are no longer just a value-added; they are an essential support for every business in the post-pandemic world.