Did you know that the spending in the logistics and transportation industry totaled $1.48 trillion in 2015 and accounted for 8% of the annual GDP of the United States? This fact published by SelectUSA, points to the growing importance of the logistics sector in the American economy, largely because of the growth being witnessed by the e-commerce industry.
Trends to Watch Out for in the Logistics Industry
- Evolving Customer Expectations – Supply chains will remain under constant strain to meet customer expectations of faster deliveries. An urgency will have to be shown in reducing delivery defect rates, since this will have a direct bearing on the profitability of these companies.
- A Shift to Digital is Inevitable – The logistics industry has been slow in adopting new and emerging technologies to their advantage. A digitally integrated value chain can help in the better planning of routes, scaling or ramping down capacity based on real-time data that can be generated by implementing artificial intelligence techniques to data analytics.
- Collaboration for Improved Efficiency – “Horizontal collaboration is already happening, especially in last-mile delivery,” says a report by PwC. Many e-commerce companies and major national courier delivery services, like DHL and FedEx, have already started collaborating with national postal services for faster deliveries. One can also expect a lot of joint ventures and mergers & acquisitions in the logistics industry for improved efficiency and higher profitability. One example could be the sharing of assets, such as fleet trucks, between companies.
- Moving Towards Automation – Third party logistics service providers, or 3PLs, have a lot to gain by moving towards software automation. For instance, a courier software solution for tracking dispatch can automate the flow of valuable, customizable and time sensitive information ensuring accuracy, accountability and greater profitability for the service provider, according to Key Software Systems.
- New Business Models – A large number of companies in the industry have started to experiment with new business models with the intent to gain competitive edge and improve customer experience. From considering 3-D printing at customer locations to introducing warehouse robotics, new business models will turn out to be a win-win for both the supplier and the customer in the future.
While e-commerce will continue to be the engine of growth for the logistics industry, how fast the industry reinvents itself will play a major role in determining the scale of its growth. Companies will have to constantly evolve their capabilities in order to become lean, efficient and competitive.