By Soham Choksi
Rising spot rates, lack of container availability, driver shortages, skyrocketing customer expectations, the emergence of new fulfillment models, the pandemic, among many other disruptions, have strained supply chains like never before. Having said that, these disruptions will continue to shape how the global supply chains and logistics industry execute their operations this year. Here are the key trends that will likely shape the logistics industry this year:
Sustainability Will Be More Than Just An Add-on
An IBM research indicates that 57% of customers are willing to change their purchasing habits to reduce their carbon footprint. With a whopping majority of customers in favor of environment-conscious practices, brands must also take sustainability seriously. Hence, Customers will favor businesses taking measures to curb CO2 emissions while executing delivery operations. Moreover, ensuring logistics sustainability is a win-win for companies.
Optimizing logistics processes can reduce a negative environmental impact and overall logistics costs and efforts. It can serve both purposes by reducing miles traveled, boosting delivery productivity, eliminating empty miles, decreasing trip volume, increasing resource utilization, and doing much more. AI-powered smart logistics management platforms can help brands strengthen this area.
Greater Demand For Cross-Border Ecommerce
Rapidly improving connectivity across geographies is making the world extremely accessible. Today, a jar of raw shea butter kept in your vanity may find its root from a small producer in Ghana. The dates we relish here during winters are probably shipped from the world’s largest dates factory in Dubai.
According to Forrester, cross-border purchases will comprise 20% of all worldwide eCommerce in 2022, with sales of $627 billion. The APAC is set to become the most prominent hub of cross-border eCommerce for imports and exports. Going with this pace, both brands and shippers will have to build capabilities around delivery visibility and scalability using the right technological and logistics partners.
Quick Commerce Will Continue To Explode
More and more consumers are joining the on-demand bandwagon in pursuit of instant gratification for their delivery needs. According to RedSeer, the quick commerce industry will clock a growth of 10-15 times in the coming five years and become a $5 billion market by 2025. We have already seen instant delivery services taking the market by storm. Continually narrowing delivery windows, high customer expectations, and intense competition will keep brands on their toes to meet the unique delivery requirements of every shopper.
Quick Commerce Will Go Beyond Groceries
As order volumes surge and customer expectations soar high, brands will have to serve a buffet of goods other than just groceries. A demand for delivering electronic items, food, apparel, etc., under 10 minutes may soon become a new normal for everyone.
Greater Need To Bring Inventory Closer To Customer
Rising eCommerce order volumes and the need for faster deliveries will drive brands to open up dark stores closer to high order volume areas. But the strategic placement of inventory alone wouldn’t work. Brands will have to optimize the movement of goods from the store to the customer location to balance customer expectations and profitability.
Need For Real-time Visibility of Inventory
The only challenge with delivering from the local Kirana or neighborhood stores is inventory visibility. Neither the customer nor the delivery aggregator knows what’s in store at any given time. But as the market for on-demand expands and order volumes swell, the local shops will have to build technological capabilities to extend better visibility and tap into the lucrative business opportunities.
Automation Will Lead The Hyperlocal Revolution
Automating core last-mile delivery operations will become critical for ensuring deliveries that are done in less than an hour. Smart allocation engines can auto-assign deliveries to the drivers based on pre-fed constraints such as proximity to the customer, current workload, weight, volume, and others. Automation can speed up task allocation and reduce the delivery turnaround time to meet super-thin delivery windows. Such capabilities enable businesses to drive a net allocation rate of 99%.
Predictive Analytics
Analytics and predictive intelligence will empower businesses to gain greater control of logistics operations. For instance, predictive analytics in terms of ETA can help manufacturers plan production better and curb any associated cost leakages in the process, such as labor or logistics costs.
Autonomous Vehicles And Drone Deliveries
Several big-league logistic players like UPS and DHL have already made significant investments in deploying these state-of-the-art autonomous delivery technologies. The increasing adoption of automated and unmanned aerial vehicles like drones for logistics operations has numerous benefits. These include decreasing logistics costs, advancing eco-friendly deliveries by reducing carbon emissions, and extending services in complex or heavily clustered regions.
The supply chain and logistics industry is changing for good. Numerous disruptions to the sector in the recent past have catalyzed rapid digital transformation to build more resilient, secure, and agile supply chains. But as eCommerce continues to explode and quick commerce skyrockets, businesses will have to continually evolve by improving their technological capabilities and offerings to stay relevant and ahead of the curve.
