Online meetings were used when the COVID-19 pandemic restricted people’s movement. The same technology is not able to satisfy the movement of goods, which is a prerequisite for international and domestic trade. The logistics industry has been rapidly transforming to automation. This is undoubtedly due to the impact of the global pandemic.
Online meetings were used when the COVID-19 pandemic restricted people’s movement. The same technology is not able to satisfy the movement of goods, which is a prerequisite for both domestic and international trade. The logistics industry has been rapidly transforming to automation. This is undoubtedly due to the impact caused by the pandemic.
The COVID-19 pandemic was both a blessing and a curse for the global logistics industry. The COVID-19 pandemic has both been a boon and a bane for the global logistics industry.
The industry was clearly not prepared for this kind of turmoil. As they tried to adapt to these never-before-seen situations, many companies found themselves in financial difficulty. They realized how fragile their global supply chain was and how susceptible they were to disruption.
In context, it is worth noting that at the start of November, goods arriving from Asia in the US took an average of 70 days to arrive. About 80 percent longer than before COVID-19. As cargo ships waited at both ends of their trip to be unloaded and reloaded, this added to the turnaround times, which further contributed to the shortage of shipping containers. The result was an increase in freight costs.
On the plus side, it was clear that in order to minimize disruptions in case of similar scenarios in the future, it would be necessary to reduce supply chains and make sure that goods were delivered faster across all endpoints. The result was an acceleration of pre-existing trends such as digital transformation and automation. This included delivery by drones and the use of robots and driverless vehicles in warehouses.
Emerging Technologies
According to Fibre2Fashion’s market intelligence tool TexPro, the global logistics market is expected to grow to $15.5 trillion in revenue by 2023. This huge leap will only be possible if the industry embraces the latest technological advances. The sector could adopt several approaches, some evolutionary and others revolutionary. It can also adopt new business models to meet the growing customer expectations.
It isn’t easy to imagine a world today without transport or delivery. The logistics industry, as we know it, will undergo a major transformation as technology is integrated. In order to maintain their competitive edge, traditional logistic organizations will review their business model in order to meet the changing expectations of customers, such as faster shipments and greater transparency.
Comparing companies that use traditional service providers with those that use technology such as cloud-based software and data analytics, the latter will be able to streamline their processes further and achieve greater efficiency. In order to shape the technology that is integrated into logistics, it would be important to consider how customers’ needs are changing.
Internet of Things: The IoT is an important field. IoT allows data to be sent over any network. This will enable it to monitor employees, equipment, and people while maintaining their safety and security. The IoT will allow managers to understand and assess the activities of a business or factory, including how machines and equipment are working, ambient conditions, energy consumption, and inventory levels. It also improves the visibility of goods in transit, which leads to an increase in sales for industries. IoT can also detect problems or obstacles in the logistics industry.
Artificial intelligence (AI): At present, there are 1.1 million robots in operation around the globe. They are reliable and efficient in their production and delivery. They can also be used alongside human workers in factories. In the US and Japan, robotics and AI have been implemented in a number of logistics processes. In the near future, it is predicted that robots will take over blue-collar jobs, and chatbots can help with customer service.
3D-Printing: Imagine the possibilities that 3D printing offers. It has become a real reality for many companies. The 3D printing technology allows organizations to store parts and replace them in virtual warehouses using data models. They can then print these parts anywhere and anytime. This technology will increase the number of deliveries at the last minute, as most goods can now be printed near the customer. 3D printing centers will be located near the sales markets in order to encourage local and regional production. 3D printing allows companies to produce products in small quantities on demand and close to the customer. Fortune Business Insights estimates that the global 3D-printing market will grow from $15.26 Billion in 2021 to 68.71 Billion in 2028, with a CAGR (Compound Annual Growth Rate) of 24 percent during the forecast period 2021-2028.
Drone delivery: Back in 2012, when Amazon announced it would be using drones to deliver goods, the announcement attracted much attention. Since then, a number of companies have reported or are considering drone delivery plans. Commercial drones have been programmed to deliver products and services quickly and at low cost. A locating program allows the company to pinpoint exactly where the customer is, which makes it easier for them to deliver packages. Drones can be improved with new features as technology improves. The drone logistics and transport market will grow.
Driverless Cars: These cars can navigate and drive without human assistance. The electronic sensors, eyes, and ears of this vehicle can help reduce human effort and costs in the logistics industry. Only one out of eight logistics companies have any expertise or knowledge in this field, which makes implementation difficult.
The hype surrounding these emerging technologies is intense. Logistics companies that are willing to try new things will be the ones who lead the way in the future. In order to maintain and gain a competitive edge, a logistics company needs to leverage the available technologies as much as it can and integrate them into its core systems.
A Look at the Future
What will the logistics market look like in five to ten years ‘ yeayear’scertainty is still prevalent. Digitisation, along with escalating expectations from customers, is forcing logistics companies into unprecedented changes. New technologies are enabling more collaborative models of operation and greater efficiency. They also shape the market to a degree that is only now beginning to emerge. Sectors are also affected by new entrants and existing customers. Anthony Nunzio is the founder and CEO of ICC Logistics Services, a New York-based company that helps companies control their freight costs. He believes many global supply chains are not ready for COVID-19 despite the warnings of potential supply chain flaws, like the trade tensions in the US and China. He says that every business needs to be prepared for the next disruption because it will occur.
Here are some trends we can expect to see in the global logistics industry over the next few decades:
The top priority for is to reduce the environmental footprint and sustainably manage the environment.
The transportation industry is a major contributor to greenhouse gas emissions. In order to remain relevant, companies will need to provide solutions and insights that help customers reduce their ecological footprint. They must also become more than just a”selling point.” Companies will develop new product lines as sustainability becomes a priority. These include alternative fuels, emerging technology, and alternative supply chains. Instead of simply talking about it, they will show a greater level of focus and progress.
Electromobility is a major contributor to greener transport.
Another strong trend is the development of eco-friendly energy sources and electromobility. As the focus shifts away from oil-based fuels and towards battery-based powers, the development of electric vehicle systems and powertrains will accelerate. As new regulations are implemented globally, the use of eco-friendly fuels for maritime transportation will increase. Electromobility will allow freight forwarders to reduce their carbon footprint and assist their clients in making more informed decisions regarding their supply chains.
Blockchain technology can revolutionize the Logistics Industry.
The next generation of technology is blockchain technology. Information is stored in a database and accessible via a chain. Blockchain technology holds identical information blocks throughout its network. This prevents a single entity from controlling the system and eliminates single points of failure. The information is public, and anyone can verify it online. This technology is going to revolutionize The Review of Maritime Transport 2021, published on 18 November by the United Nations Conference on Trade and Development, says that” “improving the quality of the port infrastructure will reduce the world average maritime transportation costs by 4.1 percent, while better trade facilitation would decrease costs by 3.7 percent, and by 4.4 percent by improving liner shipping connectivity”.” The UNCTAD report also urges the continued monitoring and analysis of trends in order to find ways of reducing costs, enhancing efficiency, and smoothing delivery. The report predicts that” “the industry’s transition to zero-carbon shipping will also affect the capacity of the maritime supply chain in the medium and longer term.” Investors will need to be able to rely on a global regulatory framework that is predictable in order to ensure the required investment in new fuels, ships, and ports does not get delayed.
The use of new transportation alternatives
By 2030, it is estimated that 60 percent of the global population will be living in cities. This poses many challenges. As people move from rural to urban areas, the demand for goods and services in and out will also increase. As a result, it is anticipated that an increased focus will be put on managing congestion, urban freight distribution, and pollution, as well as environmental-related issues such as emissions and air pollution–all at the same time. In order to meet the growing demand for e-commerce, drones, and other new transportation alternatives will be employed. Self-driving cars will also improve city logistics. As 3D printing develops, it will offer new possibilities that are only possible today.
Maritime Logistics
As they handle over 80 percent of the global trade in volume and 70 percent by value, ships and ports are vital to worldwide interdependence and supply chain links. The maritime sector becomes more important when there are disruptions, such as the current pandemic because international trade and economic activities can be negatively affected by disrupted supply chains and transport networks.
All indicators indicate that the maritime industry will face immediate challenges, even though the impact of COVID-19 is not yet known. The challenges vary according to the type of maritime transport (e.g., Container, bulk, Reefer, Tanker, and national or international transport operations are different.
The International Maritime Organization has urged the industry to reduce its greenhouse gas emissions by at least 50% by 2050 compared with 2008 levels. This will lead to the development and adoption of environmentally friendly and fuel-efficient technologies. The lockdowns and the subsequent increase in air pollution have made it clear how important clean technologies are for combating climate change and continuing life on Earth.
Documentation for shipping goods is expected to undergo rapid digitization, as it will not only increase efficiency but also reduce the need for physical interaction, which is crucial, given how COVID-19 has been impacted. For example, e-documents allow for faster completion of formalities without the need to sign or deliver documents physically. Governments can achieve this by deploying the appropriate technologies. Dubai, for example, is implementing a blockchain-based strategy that involves documents. The goal is to eliminate over 1 billion paper documents in order to save $5.5 billion annually. The adoption of these technologies will result in lower costs.
In the Review of Maritime Transport 2021, published on 18 November by the United Nations Conference on Trade and Development, it is stated that “improving the quality of the port infrastructure will reduce the world average maritime transportation costs by 4.1 percent, while better trade facilitation and improved liner shipping connectivity will reduce costs by 3.7 percent “t and by 4.4 percent.” The report calls for continued monitoring and analyses of trends in order to find ways of reducing costs, enhancing productivity, and smoothing the delivery of maritime commerce. The” report predicts that “medium to long-term, the maritime supply capacity industry is affected by the industry’s transition toward” zero-carbon shipping.” Investors will need to be able to rely on a global regulatory framework that is predictable in order to ensure the required investment in new fuels, ships, and ports does not get delayed.
Air Cargo Outlook
The outlook for air cargo, both short-term and long-term, is positive. The short- and long-term outlook for air cargo is positive.
Brendan Sullivan of the International Air Transport Association (IATA) said at the 14th World Cargo Symposium, which was held “in Dublin recently, that “Air cargo” is a critical industry.” The pandemic brought that home. During this crisis, cargo has been an essential lifeline, transporting vital medical supplies and vaccinations around the world and maintaining international supply chains. Cargo became an important source of revenue for many airlines when passenger flights were grounded. Air cargo generated $129 billion in 2020. This represented the airline’s third (33%) of its total revenues. The outlook for”the future is positive. “We need to continue the momentum that was established during the pandemic and build license after the crisis.”
IATA predicts that the global cargo market will surpass its pre-crisis levels (2019) by 8 percent, and revenues are expected to reach $175 Billion this year. Yields are expected to increase by 15%. Demand will exceed pre-crisis levels (2019) by 13 percent in 2022, with revenue projected at $169.4 billion and a decline of 8 percent in yields.
Shippers will also be expected to take on greater responsibility for their emissions. Customers will hold them accountable if they don’t. Many organizations now report the amount of emissions produced by their supply chains and are looking for carbon-neutral transportation solutions. Customers will expect air cargo companies to maintain the highest sustainability standards. Sullivan says that a collective effort will be needed to move from stabilizing net emissions to reducing them.
Air freight companies will also benefit from digitalization, as it will improve their operational efficiency. This will be especially useful for cross-border e-commerce and items that require special handling, such as time-sensitive payloads and temperature-sensitive pay”ads. Sullivan states, “Customers of these products want the ability to track their goods at any point during transport and” know their condition.” This requires data and digitization.
Rail Freight Transport
Asia-Pacific is the largest rail transport market, with a market share of around 40%. Western Europe follows closely behind, with a share of about 20%. Africa is the continent with the smallest percentage of rail networks in the world.
Rail freight emits significantly less CO2 than air freight, a fact that has gained importance over the past few years.
Rail transportation is adopting driver assistance systems that are more advanced than ever before to improve safety, reduce costs, and optimize energy usage. The advanced techniques also include automated warning, protection, and operation systems, as well as monitoring and control systems.
In recent years, China took the lead in laying direct rail routes to Europe. It has taken 15-18 days for Chinese goods from China to reach European rail termini, compared to the twice as long it takes to send containers via ship. It allows China to ship its goods directly to a number of European countries. Sometimes, the last mile is delivered via short sea routes or trucks. Due to faster transit times, European companies are better able to respond to market changes.
China State Railway Group (the national railway service operator) reports that there will be more freight trains between China and Europe during the first ten months of 2021 compared to the previous years. From January to October, 12,605 trains carrying more than 1,22 million containers traveled between China and Europe. The number of trains increased by 26 percent compared to last year, and the freight volume increased by 33 percent.
The Group claims that the safe and steady operation of its services has made it an important strategic channel in global trade. The company has developed plans to increase capacity in overseas corridors by opening up new routes and offering different transport models.
Construction of a high China railway in South China’s Guangxi-Zhuang autonomous region has made significant progress. All tunnels are now drilled. The railway that connects the cities of Fangchenggang, located on the China-Vietnam Border, and Dongxing will be a key component in the development of railway connectivity between China and the members of the Association of Southeast Asian Nations.
China Railway Nanning Group reports that the number of freight trains crossing the border from Guangxi into Vietnam has increased by 57.5 percent in the past year. China will likely continue to dominate inter-country rail traffic, with its network reaching over 170 cities across 23 European countries and Vietnam.
Challenges To Global Logistics
Global logistics companies face many challenges due to technological advancements, changing consumer expectations, and government regulations. Here are a few of the most important ones:
Enhancing business processes: Of the companies surveyed by Inbound Logistics, 36% strongly agreed that 3PL partners had helped them reduce costs and improve function. Logistics partners are expected to understand and know how to make company-wide improvements, not only within supply chain and logistic operations. Financial stability, flexibility, and an openness to some risk is also essential. Industry benchmarking is a highly competitive way to improve business processes in the logistics industry.
Enhancing Customer Service: After COVID-19, the markets have become more dynamic, and the supply chain is more complex. The customer’s expectations have also changed in terms of quatoday’srvice and delivery time. In today’s highly competitive market, logistics partners must also be resourceful and creative in finding solutions to problems. In order to be successful, logistics partners need to hire people who have the right attitude and skills. The company should also try to standardize and enhance the customer experience on all channels and touchpoints. This includes traditional and digital media such as phone calls, online chats, and e-mails.
Improving supply chain visibility: Logistics companies need to have full visibility of all aspects of the distribution chain to ensure on-time and accurate deliveries. Tracking shipments is essential to ensure that they follow the prescribed schedule and route and to send alerts in the event of disruptions. This allows immediate action to be taken. Customers should receive updates, including shipping notifications, estimated arrival times (ETAs), and the option to track shipments. Although digitalization and technological advances are a great help in this area, there is a lot that can be improved in the process.
Government Regulations: The government has a lot of regulations for international shipments. All organizations must adhere to the rules of each country. The carrier fees must be fair to both charterers and ships, like demurrage, which is charged when either charterers or ships fail to return containers/equipment on time. Transport service providers should minimize blank sailings, abandonment rates, and any other actions taken to protect the vital services provided by shippers. This is especially true for vulnerable countries. Access to ports is crucial when there are no transit measures, such as transit lanes and special procedures.
Sustainability: This is the focus of this article, in part due to anti-idling regulations and emission reduction laws implemented by governments but also for public perception and savings. To comply with regulations, companies can optimize routes and load-loads, track and report emissions, upgrade engines, and choose alternative fuels. Consumers expect that companies are aware of the impact they have on the environment and will be held accountable.
