As we’ve all probably seen, each year starts with wild internet speculation on what the future has in store for us. But for the last few years all these articles and lists seem to consist of the same repeated technological innovations and logistics trends. Why is that? And why these innovations are not yet in wider use?
The esteemed Greek philosopher Heraclitus once said: “The only thing that is constant is change”. This also applies to the world of logistics. But the changes in our industry haven’t quite happened in the manner we expected. This is apparent every year, when all logistics-focused media outlets publish their predictions for the next big things in logistics sector. And usually these articles consist of the same things as last year.
The hype around these recurring innovations is enormous, but their transition from “coming soon” to “now playing in logistics centers near you!” doesn’t seem to happen in a large wave but on the contrary, drop-by-drop basis. So, what are the next big things we can assume will change the logistics sector in this decade? We compiled a list of our own predictions and clarifications for game-changing trends. None of them should come as a big surprise for you, but we shake things up by picking out some not so prominently featured tendencies inside the larger trends.
After our three points, our experts analyze what are the possible things that are slowing down the implementation of these tendencies.
1. AI, machine learning and quick & easy automation
For the past years supply-chains have been under enormous stress caused by the growing requirements for fast and reliable deliveries from end-customers. This forces logistics companies to invest in automation, whether it be cobots, AGVs or full-scale warehouse automation.
For example, the International Data Corporation predicted that by the year 2023 sixty percent of the G2000 manufacturers have invested in AI-infused process automation. Correspondingly, 65 % of all the warehouse activities will use robotics and situational data analytics by the same year to enable warehouse optimization, increase capacity and cut work order processing times.
The supply chains will no longer be just chains, but complex networks full of variable. When the usage of different management systems fragments the overall management, a software that thinks and learns is a must. For example, self-learning software robot can crush numbers for you or even manage your company’s whole invoicing in the future. We believe that transfer of information that is faster, smarter, self-learning and able to predict future events will affect every link in the supply chain in the upcoming years.
We share the idea that light and flexible multipurpose automation, such as cobots, are going to become more common at the same rate that their possible uses increase. This will revolutionize logistics when these kinds of solutions become cost-effective and easy to deploy for smaller businesses, at the latest We believe that effective use of both automation and management systems as supportive elementor material flows will become a key to survival in the next decade.
2. Green logistics
The growing outcries for greener logistics among the end-customers and the evolving environmental legislation drive companies to focus on sustainable development in every link of the supply chain.
That’s why countless logistics companies, including HUB logistics, have implemented plans and strategies to minimize the burden caused on the environment, the economy and the community. This leads to continuous optimization of supply chains and, for example, the rethinking of packing materials and transportation solutions.
What is green logistics and what does it contain? The term hasn’t been properly defined and it can consist of large amount of different actions and values. The situation might change with evolving environmental legislation. With restrictions and sanctions the term “green logistics” must become more clearly defined. It will force companies to remodel their logistics processes to more environmentally conscious direction.
For example, the Chinese eCommerce giant Alibaba launched its Green Logistics 2020 project to develop, among other things, the recycling of materials, packing processes and transportation route optimization. Many other large companies have since followed this example.
At HUB logistics, we believe that the transportation part of the supply chain shouldn’t be the only thing under consideration, when planning green solutions. We believe that the whole supply chain, including production, should be a breeding ground for environmentally responsible thinking. In this case, in addition to the transportation issues, we should also concentrate on where products are manufactured and what is their full global route from raw material to the end-customer. Also, different transportation solutions implemented in the right places and in the right need are significant development trend in green logistics.
3. Elastic logistics
The market situations change quickly. The supply capacity should also be able contract, expand and focus when needed. If your company wants to avoid unnecessary hassle and excessive costs, logistics should stretch and bend in accordance with the fluctuations of the market situation. And, of course, this shouldn’t affect the customer experience in any way.
In logistics, the flexibility is usually acquired by minimizing fixed costs such as warehousing spaces, equipment and machinery and long-term investments. Technological elements, like more accurate analytics for forecasting upcoming fluctuations, will help this goal in the coming years. Maybe the most popular way to achieve elasticity in logistics is an extensive use of third-party service providers.
The elasticity of logistics is also increased by the global speed of the supply chain. By combining analytics, ecologic and suitable logistics forms and optimization of warehouse inventory and value are going to drive logistics services forward during the next decade.
From predictions to reality
When reading this article, especially the first point, you might have asked yourself “from what year is this from?”. The hot trends listed above and the innovations that come with them, like automation, digitalization, Big Data and IoT, have dominated these kinds of lists for years!
So, what exactly is keeping them from becoming mainstream in the logistics sector? Here’s some speculative answers for you.
The technologies are still relatively expensive, and they aren’t necessarily suitable for every process yet. And that’s why the risks for the investment may also seem unreasonable and uncontrollable. In other words, the cost of the technology in relations to the possible gains might not be on a level in which the investment makes sense.
However, over time the standardization of these solutions will lead to the sharp decrease of the investment costs, which in turn will make them more affordable and desirable for small businesses. Easy, quick and cost-efficient technologies are inevitably going to become more attainable in the near future as the investment risks are going to plummet.
Large changes don’t happen quickly, even in the very competitive logistics sector. They spread with little steps instead of giant leaps. But implementation of changes and the need to invest in state-of-the-art technologies becomes necessary for everyone. This is because of the pressures provided by the end-customer demands and the need for more sustainable processes.
Therefore, if you are thinking of outsourcing your logistics, would it be smart to cast their eyes to the future? Should you consider choosing a company that is already one step ahead of its competition in implementing these innovations? A company that already has experience with all the trends mentioned above.