It would be useful to take a look at some information before questioning what the logistics trends are and what the future of logistics is. Fifty years ago, in the 1970s, the world population was around three and a half to 4 billion. In 2000, the population of our world exceeded 6 billion. In 2020, we are faced with a world population approaching 8 billion. Population growth doesn’t just mean more demand and more production. Today’s people, having a lifestyle different from the habits of their ancestors, demand products that are not in their own country or even in their own continent. This means that logistics grows in parallel with the human population.
We can mention 2 basic currents that determine the direction of the industry. Those are technological developments and concerns regarding sustainability. These two concepts continue to shape today’s business world. Let’s have a look at these two concepts before moving on to micro changes.
The main factor determining logistics trends is of course technological developments such as IoT, 5G, AI and cloud. Firstly, the cost of using IoT has started to reduce, making this technology accessible to organizations of all sizes. The conversation of vehicles with people was a development that has already been in our lives in the logistics industry for many years and facilitates our planning. IoT, on the other hand, takes this dialogue to the next level, enables and will enable vehicles to be aware of each other by communicating with our other systems. Imagine a vehicle reporting where the malfunction is, which spare part it needs for repair. By reporting the situation to the vehicle maintenance department while returning from the voyage, it can ensure to order the product that is not in stock and thus, make its next voyage without wasting time.
We get the chance to optimize our business more thanks to cloud storage and big data analysis. It allow us to store data, analyse and take action not only for optimum route, least fuel usage but also for predicting malfunctions, performing preventive maintenance, determining the optimum maintenance mileage. It also helps in the areas of CRM and marketing. While making our current customers happier, we are able to turn our potential customers into current customers.
Lastly, let us quote a sentence from the report of “Shifting patterns- The future of the logistics industry” of PWC;
“Digital fitness will be a prerequisite for success: The winners will be those who understand how to exploit a whole range of new technologies, from data analytics to automation and platform solutions.”
One of the crucial logistics trends is, of course, sustainability as anyone can guess. In particular, the attitude of the new generation against climate change encourages all brands to take steps toward sustainability. In addition to social pressure, the policies of lawmakers, especially in developed countries, make some steps obligatory to be taken.
The United Nations Framework Convention on Climate Change, adopted in Paris in 2015, has been signed by many countries around the world. The European Union continues to take measures to reduce greenhouse gas emissions. The goal is to reduce carbon emissions by 40% by 2030. Achieving this goal, of course, means making regulations that also affect logistics companies. Here are the decisions made by some countries regarding fossil fuel consumption;
- In the UK, sales of all fossil fuel-powered vehicles, including hybrid, will be stopped by 2035. The goal for 2050 is “0” emissions in all vehicles,
- Ireland has decided to ban oil and diesel-powered cars starting from 2030,
- The Norwegian Parliament has set a goal for all vehicles to have zero emissions by 2025,
- France plans to ban the sale of fossil fuel-powered vehicles by 2040.
The world’s largest carbon emission producers are China and India. They are also among the countries that have announced that they will take serious measures regarding the use of fossil fuels.
Especially international transportation companies need to closely follow the law amendments of the countries they do business with. We can consider increasing the use of railways to reduce the carbon emissions of our logistics activities.
In the meantime, it would be beneficial not to consider logistics only by addressing the environmental aspect. The economic sustainability of the company, the sustainability of the training of the employee and the concepts of social sustainability are as important as environmental sustainability.
LOGISTICS TRENDS – LOGISTICS IN THE FUTURE
OPERATION MODELS BASED ON COOPERATION
Logistics companies will enhance their cooperation in the upcoming years, in order to be afloat by increasing their profitability, just as in other industries. New technologies enable collaborative operation models for higher efficiency. Companies of all sizes can now benefit from such cooperations.
CHANGING CUSTOMER EXPECTATIONS
Another of the logistics trends is the management of changing customer expectations. We can see that faster, more flexible, efficient and traceable logistics service is among the expectations of our customers. Besides, customers expect companies to be more transparent. Developing technology helps us to meet these demands of our customers. It is possible to track where the loads are at any moment. It is even possible through much different software to track where and how long the vehicle stops and its estimated arrival time. Integrating customers into this software will be beneficial in terms of increasing mutual reliance.
THE POWER OF START-UPS
Another factor shaping the industry will be new entries in the industry. Start-up companies, which will take place in the industry as both customers and suppliers, may redetermine the dynamics of the industry. These companies entering the system with new technology pose a great danger to old, cumbersome logistics companies. Benefiting from the blessings of technology to the full, these companies offer faster, cheaper and traceable systems to their customers. On the customer side, start-ups prefer companies that can adapt to their own technological infrastructure. For this reason, it would be useful to consider that the growth momentum of start-ups can suddenly multiply even if their volume is small at the moment.
When we take a look at the reports on the industry and the future projects of leading companies, we see that technology is the main catalyst for logistics trends and the future of logistics, and sustainability is one of the most important issues. Therefore, each company should analyze well how it will be affected by these developments and the attitude of its current and potential customers towards these developments while making its own future plans.