Logistics is a rapidly evolving market; many factors are shaping the future of how company’s move goods and what they will require from their transportation carrier. Trends and challenges in today’s supply chains mean evolving logistics networks must be prepared to deliver results in an ever-changing business environment.
Today, demanding customers, complex supply chain and ever-changing relationships with third-party logistics (3PL’s) providers are prompting supply chain management professionals to closely examine the adaptability and agility of their logistics networks, because logistics will play an ever-greater role in delivering high-performing results.
The demand for freight transportation has been rising for many years at both the national and global level. Existing transportation volumes are already overloading today’s infrastructure creating difficult-to-expand bottlenecks. At the same time, population shifts are in evidence, indicating a growing number of people living in cities and metropolitan regions, while increasing individualization is another factor that will transform the logistics of future. These are just some of the trends that will intensify in the coming years.
The scale of the infrastructure that moves our products is staggering, yet we hardly notice it beyond appreciating how fast an item has arrived or growing agitated with double-parked delivery trucks. But the ships, trains, trucks, ports, rails, roads, and support structure that facilitates the metabolism of our society will soon be more visible. The future holds more and more commodities to be transported, and infrastructure will have to change drastically to accommodate our appetites.
The logistics industry is going through a time of rapid and unprecedented transformation. The future of logistics is paved with innovation and technology. Today, the industry is cautiously adopting these technologies to provide faster, cheaper, more reliable and sustainable delivery. At the same time, their customers, primarily the manufacturers and retailers, are wasting no time urging their 3PL logistic providers to integrate these new technologies into their service; such as The Internet of Things (IoT) this revolutionary technology allows devices to communicate with each other within an existing internet infrastructure without human intervention, some 3PL companies are currently using machine-to-machine (M2M) technology. Its application in the future of logistics is expected to increase speed, decrease waste and reduce overall costs. Other technology is driverless electric vehicles; this has had a lot of people predicting that the future belongs to self-driving vehicles. Such a vehicle is equipped with electronic eyes and ears and capable of navigating without human input. Its application in logistics can make an enormous reduction in costs. But are 3PL and the private sector companies ready for this cutting-edge technology?
As Omni-channel matures, supply management can provide a pragmatic viewpoint and set expectations, including price tags around various fulfillment options; existing infrastructure can’t support true Omni-channel. E-commerce distribution centers are designed to pick, pack and ship partial shipments, with remaining distribution centers used for full shipments.
Retailers currently are trying to create more in-store integration with online channels, using stores as fulfillment centers for Internet shopping sites, and to facilitate online order pickups at stores. Companies have to determine how much of their current infrastructure they are willing to take apart to build new delivery channels. An important aspect of a high-performing logistics network is having it integrated throughout the supply chain and the company. One key to breaking down barriers for an integrated logistics system is an effective sales and operations planning (S&OP); a S&OP is as much a cultural issue as it is a business process issue. There has to be a collaborative culture and environment where sharing information upstream and downstream in the supply chain is valued, as part of an integrated strategy.
The trends which are emerging in logistics now, however and which promise to shape the next decade of operational and commercial reality, should be examined, discussed and planned for. No one in business has a crystal ball, but true adaptability comes from those who have thought through their options ahead of time.
Leaner, faster, self-orchestrating supply chains
Tomorrow’s warehouses for freight, transport and logistics have mobile robots, drones and autonomous devices making the work faster. Internet of Things (IoT) platforms are being introduced to connect retailers to couriers and transporters, with one click. Following confirm the same
- Autonomous fleet: New forklifts called ‘vision-guided, fully autonomous mobile robots’ will tackle the time-consuming, unproductive tasks that people do, particularly transport within a warehouse. This technology will process orders four times faster than humans.
- Data replacing fuel: Instant gratification is a big thing that online shopping can deliver. Amazon, for example, are working on drones that could make deliveries straight from warehouses to homes. Logistics could become a data-centric industry where information takes priority in logistical services’ value propositions (not the transport of the cargo, itself).
- Brokerage platforms: E-retailing and digitalisation in trucking will encourage a move towards mobile-based, freight brokerage-type solutions. Think Uber, for trucking, where an app is used to match truck drivers to the shipper’s needs on routes, rates and schedules.
A technologically-savvy workforce
The transport, freight and logistics workforce of tomorrow will need to engage with technology, confidently. Employees must be familiar with equipment, as well as management techniques, to adapt to users.
In logistics, there are five growing jobs, including: procurement manager, distribution centre manager, operations manager, logistics manager, and transport scheduler. The hottest industrial roles for this year, according to one article, include warehouse workers, order clerks, forklift drivers as well as shipping and receiving clerks.
Employers in the logistics sector are looking for talent who have the skills to streamline day-to-day operations. This includes delivering goods, knowledge of best transportation practices, procedures for handling various hazardous materials and creating loading bills. As machines continue to evolve and take over many manual tasks, upskilling will become even more critical.
Intermodal Freight Transport
Some of the challenges and trends in intermodal freight transport that we are currently facing.
- More customers prefer smart and sustainable transport solutions – Today, there is a large focus on environmentally friendly solutions in the transport industry. More customers prefer smart and sustainable transport solutions to the traditional standard solutions that do not take the environment into consideration. This is true also for intermodal freight transport, which constitutes an important part of turning the global transport system into this direction. There is now a wide range of smart and sustainable solutions in the market as well as companies focusing entirely on eco-friendly intermodal freight transport.
- Intermodal freight transport is gaining ground over traditional road transport – There is a clear trend where intermodal freight transport is gaining ground over traditional road transport. Many countries, especially across Europe, are making large investments in infrastructure development. Road as well as rail networks are extended and becoming more sophisticated. As a result, many transport companies can now offer the same transit times for their intermodal freight transport as for standard road services. This makes it difficult for standard road services to compete with those new smart and sustainable solutions for intermodal freight transport.
- Increased demand for intermodal freight transport from automotive and FMCG – The increasing demand for intermodal freight transport is coming especially from two industries: the automotive and FMCG (Fast Moving Consumer Goods). This is a result of the (previously mentioned) improved transit times and infrastructure developments, putting intermodal freight transport in an increasingly competitive position against standard road service.
- Transport companies struggle to provide reliable transport services – However, one of the greatest challenges in intermodal freight transport at the moment is for the transport companies to truly offer reliable services. Even though intermodal freight transport is a growing segment, there is a lack of flexibility in the transport chain. The infrastructure in Europe does not yet fully correspond to the demand on reliable service levels. Ongoing constructions and temporary strikes are challenging the time schedules for both road and ocean freight. Having that said, we are well on track considering the large number of investments made only in the last few years.
- More consolidated shipments and groupage consignments due to smaller volumes – Another challenge in the transport industry today, is that more customers are booking smaller volumes with shorter notice. There is a large focus on flexibility in production and many companies want to reduce safety stocks and inventory costs. This has led to an increased demand for consolidated shipments and groupage consignments. It also mirrors the overcapacity in the container segment, now leading to some of the giant container ships being taken out of operation.
- Higher expectations on service levels and integrated and flexible IT systems – Digitalisation is transforming many industries today and the transport industry is no exception. As technology becomes more advanced, customers expect a higher level of service including integrated and flexible IT systems. The many modes of transport in intermodal freight contribute to a complex and dynamic supply chain and information has become a vital part in efficient supply chain management. Transport companies are now making large investments in IT solutions with fully integrated view of real-time information across the supply chain to meet those new demands, and improve customer satisfaction.
