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Trends Shaping the Future of Logistics in 2021

There are unwritten rules, most of which disruptive forces state are always at play, reshaping organizations’ thoughts on technology and the future. Logistics has these rules, with the market rules having a significant impact on the sector. The disruptive forces range from regulations that require new tactics and strategies to ensure compliance to new technologies to take advantage of and explore. For logistics companies to remain competitive and remain at the bleeding edge, they must remain plugged in the emerging and new trends.

Most successful companies combine the latest trends and connect them to capitalize on established and traditional technologies.

From today onwards, how will the future trends in logistics impact you?

RFID

Radio Frequency Identity Chios has been in existence for more than a decade and has provided real-time tracking information. However, while most out-of-delivery (OFD) companies invest a lot in RFID, they cannot see any ROI from the technology.
Having RFID chips does not mean you can access the data well. Instead, it would be best to have computers near the chips to collect and share the data. Also, logistics companies should have integrated file-based technology to connect devices to the core enterprise systems where data is stored and analyzed.

Logistic companies utilize RFID technology to express the value and blend traditional technology like barcode labels with RFID. Barcode labels are of low cost and are well established. The underlying business processes and systems are common and well understood.

Build till you can’t anymore

The traditional locations next to logistic centers have ceased to cover the rising demands of reverse logistics and last-mile deliveries. Companies will have to build more warehouses next to city centers. Competing land also uses a challenge that may arise from a building. As a result, therefore, companies will start mixing “use solutions” at high rates.

As this happens, warehouses in crucial areas are growing in value and demand. Some buildings serve as reminders for the continued need for high-quality assets in prime locations.

Environmental regulation and sustainability

The goal of achieving a net-zero environment will significantly influence operators’ logistics and warehouses’ construction. Companies planning to construct should embrace the ‘green building recommendations’ listed by the Green Building Council.
Contractors and developers should integrate low carbon and renewable technologies to supply the energy needs in buildings like direct purchase arrangements with geothermal installations, hydro or wind, on-site generation, and directly purchasing renewable energy from the grind. More features can include charging points for electric vehicles and solar panels.

The drive to have a sustainable environment is integral to future transport developments like vehicle pollution problems. There are areas where the introduction of Clean Air Zones (CAZs) and Ultra Low Emission Zone (ULEZ) have been initiated, and more of this is expected later on in the year.

Solve the last mile

To achieve sustainability, logistics companies will also channel a lot of their energy into last-mile efficiencies. According to research, the previous link accounts for 50% or more of the supply chain’s total spend. This, together with the rising expectations of in-home delivery, enhances the risk of encountering inefficiencies.

Various technical solutions can be deployed, like drones, autonomous ground vehicles, and cargo bikes, to curb this challenge. In 2021, the attempt to resolve the last mile inefficiencies will go on.

Internet of Things

The Internet of Things (IoT) will connect nearly everything in logistics together, like parcels to people hence driving value within the supply chain. IoT devices provide information to logistics companies, and they will use the data to predict crucial maintenance and track shipments in live time. The same technology will also help customers to confirm when their parcel left the warehouse and when it will be delivered. This will help in theft reduction.

Besides providing data to companies, the technology will also help companies in the food industry know what atmospheric conditions are present and determine whether their goods will arrive fresh and in perfect shape. Once the full benefits of IoT are released, IoT devices will become easily accessible and smaller.

Blockchain

Blockchain is a distributed, encrypted computer filing system designed to allow real-time, free from tamper records. In addition to bringing transparency to the entire logistics process, blockchain also makes it easy to use smart contracts when automating commercial processes.

Blockchain’s system enables companies to trace and track a product from when it leaves the factory until it reaches the customer. The system records all the relevant supply chain information in a database that executes smart contracts after certain conditions are met. An example of these conditions includes confirmation of a successful delivery from the driver.

Together with IoT, blockchain will enable smarter logistics. For instance, there will be a connected pallet that will transmit the goods’ condition and the delivery and confirmation time during delivery. It will also verify whether the goods were delivered according to the agreed requirements and release the payment.

Artificial intelligence and warehouse automation

Living in a socially distanced world expects us to have increased investments and reliance on artificial intelligence and warehouse automation. Warehouse automation- place and pick technologies like automatically guided cars- increase productivity, speed, and efficiency by reducing human interventions. Artificial intelligence, on the other hand, is used for predicting and route planning. AI also plays a crucial role in managing warehouses by predicting how supplies rotate.

There will be high-profile seasonal variations and events, which will lead to falls and spikes. Logistics companies will have to be more ‘elastic’ to cope with these falls and spikes. Elastic logistics means using a transportation management system (TMS). Together with TMS, AI advancements give early warnings to forecast demand, costs, and risks.

Brexit

Supply chain costs are bound to increase since shipments will need customs documentation on arrival and departure. On the same, the subject of additional tariffs on any of the ends is still being negotiated. Inevitable delays will also lead to increased supply chain costs. The government has announced plans to come up with sites to cope with the Brexit congestion.

The flexible and innovative technological processes listed above will be used to manage the difficulties Brexit has brought along. The use of cloud-based electronic data interchange, for instance, will give regular updates on matters like routes and paperwork.

5G

If it provides end-to-end continuous coverage for detecting tracking and monitoring thieves, 5G might potentially push the logistics industry to full digitalization. According to an STL Partners report, adapting 5G to the transport and logistics industry could add a gross value of $280 billion to the global economy by 2030.

While adopting 5G is associated with some challenges and is dependent on factors like investing in 5G infrastructure and using different approaches to roaming licensing and regulation terms to help telecommunication companies operate holistically as they overcome the challenge of delivering 100% coverage.

Electric fleets

The drive to achieve sustainability has continued even amid the pandemic. With local deliveries becoming more common, electric fleets could also be an answer to the puzzle. There have been moves to create smaller local hubs to deliver instead of depending on national and regional centers. Electric vehicles will have the ability to run dense and short routes when delivering retail practice.

Their advantage over local deliveries perfectly places them in a position to take over the deliveries sector. For short journeys, hyper localization could be in the form of e scooters and e-bikes. Currently, logistics companies can do a lot of intelligent route optimizations.

Logistics Industry Stats and Growth Projections in 2021

  1. The global trade value of goods exported in the world in 2019 all around the globe amounted to $19 trillion. This is a rise from $6.45 trillion in 2000. Technological advancements, globalization, and international trade developments have led to the rise in exported goods’ value.
  2. The logistics industry is among the backbones of international trade worth 5.5 trillion euros in 2018. In 2018, North America was the largest region as it accounted for 1.4 trillion euros
  3.  In 2018, the road freight mileage in the European Union was more than 1.7 trillion kilometers.
  4. The Supply Chain and Global Forwarding segment of DHL topped the leading airfreight forwarders’ loss in the world in 2019. The results were ranked based on the volume, and the company had transported 2.05 million metric tons of air freight.
  5. The United States was the third-largest nation in exporting merchandise, with the goods amounting to $1.65 trillion in 2019.
  6. The total volume of exports-goods and services- in the US was worth $444.65 billion in the second quarter of 2020.
  7. The largest freight brokerage in the world is C.H Robinson, with net revenue of $1.8 billion. The company rose when they assisted a company that needed to deliver their freight in a motor carrier.
  8. XPO Logistics was ranked as the highest logistics company in the US based on net revenue. In 2019, the company generated net revenue of $6.1 billion.
  9. There has been growth in the air cargo traffic, with the global volume of air freight increasing over recent years, and in 2020, the freight volumes reached 54.2 million metric tons.
  10. The busiest Airport in 2019 was Chicago O’Hare International Airport, with 904,300 landings and takeoffs.

Conclusion

Technology has been taking an unprecedented change, especially in the logistics sector. It is clear that in 2021, there will be exponential growth when integrating material handling equipment with intelligence. Systems will work with the environment better, and technologically savvy workers will be operating intelligent machinery to help in the logistics field.