In this fast-paced and digital-driven era where every industrial sector is going towards digital transformation, the logistics sector has still been on a slower path of digitalisation. One reason is the hesitation or fear of changing the decades-old workflows in logistics. However, the environment is changing now, as “economic uncertainty, changing customer needs” , new digital-focused competitors, post-pandemic effects, and other factors are all urging this sector to uplift its digital transformation journey (Logan et al., 2022). So, let’s explore in detail some of the key digitalisation trends in logistics that are likely to transform the industry significantly.
Digitalisation Trends in Logistics
The COVID-19 pandemic has played a significant role in pushing the logistics sector towards embracing digitalisation. As per Accenture Logistics Digital Transformation Research, 76% of the respondents believe that the increased technological advancements in the logistics industry are a result of the negative effects the pandemic had on this industry (Logan et al., 2022). Here are some of the main digitalisation trends in logistics worth knowing:
Data-Driven Predictive Decision-Making
Data is a core component of modern logistics and forms the basis of decision making in multiple departments such as; marketing, sales, supply chain etc. (EasySend, 2021). These scattered data assets contain useful insights that help logistics firms improve warehouse management, marketing, and overall customer experience (EasySend, 2021). The importance of “data-driven decision making” was confirmed by a study by 3PLStudy that reported that 98% of third-party logistic firms and 93% of shippers agreed that logistics leaders should leverage data and analytics to build a proactive supply chain strategy (Solomon, 2016).
Therefore, data insights and patterns are going to become key players for logistics firms with the passage of time.
Emerging New Business Models
There are many new business models emerging in the logistics industry. For example, the logistics industry previously relied heavily on “networks of agencies” but has recently begun to shift away from agents, towards digitalised platform models (EasySend, 2021) similar to the tourism industry in the form of Airbnb, Booking.com, etc (EasySend, 2021). Similarly, another emerging business model is “last-mile delivery” (EasySend, 2021). Often it is difficult for logistics firms to deliver products to consumers on the same day or hour of customers’ orders being placed due to heavy traffic (EasySend, 2021). However, many new startups are emerging that can assist with last-mile delivery using drones or other new technologies (EasySend, 2021).
Robotics & Autonomous Vehicles
The logistics sector has long been working to increase robotics in their warehouses, such as switching from traditional forklifts to autonomous forklifts but this is now being taken a step further with the addition of Artificial Intelligence (AI). As per Infoholic Research, the market of AI in logistics is projected to grow at 42.9% CAGR from 2017-2023 to the value of $6.5 billion (Infoholic Research, 2018). With the ongoing research and development in AI, logistics firms might soon be using autonomous vehicles to deliver goods that are packed and loaded by robotic arms, “automated conveyor belts”, and “autonomous forklifts” (ERMA, 2022).
Development Made Easy with No-Code
No-code platforms allow users to develop software programs or applications without the user requiring any coding knowledge (EasySend, 2021). No-code platforms give users the ability to build their own software through drag and drop interface elements. As logistics firms are becoming more digitalised, they require customised software to; manage and monitor their supply chain and provide a direct channel to customers for direct ordering and other assistance (EasySend, 2021). As this need increases, so will the need for no-code platforms (EasySend, 2021).
Final Thoughts
Digitalisation in logistics promises fruitful outcomes for companies, such as complete real-time transparency from supply chain to sales, data insights, automated workflows and decentralized and connected processes. These are a few of the reasons behind why the global digital logistics market size is expected to grow with 13.66% CAGR by 2026 with an estimated $58.90 billion worth, compared to $27.31 billion in 2020 (Research and Markets, 2021). To sum up, with an industry-wide shift towards reaching a pandemic-proof and sustainable business model, digitalisation in logistics is inevitable.
References:
EasySend (2021) in The 7 Leading Trends in Digital Transformation in Logistics and Transportation. EasySend, p. 9, 11, 13. Available at: https://www.easysend.io/ebooks/the-7-leading-trends-in-digital-transformation-in-logistics-and-transportation
ERMA (2022) Digital Trends That Transform the Logistics Industry, ERMA. ERMA. Available at: https://www2.erm-academy.org/publication/risk-management-article/digital-trends-transform-logistics-industry/
Infoholic Research (2018) Artificial Intelligence in Logistics: Global Drivers, Restraints, Opportunities, Trends, and Forecasts up to 2023, Infoholic Research. Infoholic Research. Available at: https://www.infoholicresearch.com/report/artificial-intelligence-in-logistics-market-forecasts-to-2023/
Logan, C., Pang, M.Y. and Chhabra, R. (2022) in Finding the right path to digital transformation. Accenture, p. 2, 6. Available at: https://www.accenture.com/_acnmedia/PDF-179/Accenture-Freight-And-Logistics.pdf
Research and Markets (2021) Global Digital Logistics Market Research Report (2021 to 2026) by Function, Services, Industry and Region, PR Newswire. Research and Markets. Available at: https://www.prnewswire.com/news-releases/global-digital-logistics-market-research-report-2021-to-2026—by-function-services-industry-and-region-301418793.html
Solomon, M. (2016) Big data, analytics gaining traction, annual shipper-3PL survey concludes, Supply Chain Quaterly. Supply Chain Quaterly. Available at: https://www.supplychainquarterly.com/articles/1226-big-data-analytics-gaining-traction-annual-shipper-3pl-survey-concludes
