Top 4 Logistics Industry Trends To Look For in 2020 & Beyond

Supply chain | Feb 21, 2020 | By Satair | 7 min read

The logistics business is evolving rapidly at the moment, but which logistics industry trends will generate lasting change? We’ve taken a deep dive into the latest studies from DHL and Logistics Management magazine to give you the answer.

Technology and agility, these are two of the most important areas in logistics moving forward, according to a recent study from DHL and a survey study from Logistics Management magazine.

Robotics and other forms of automation are starting to make a notable impact on logistics, with the relentless focus on optimisation and demand for flexible and transparent supply chains driving the shift towards an automated future.

A series of trends are predicted to transform the logistics sector in the years to come. Let’s begin by taking a closer look at the perhaps most prominent one; a technology which has sparked international headlines a number of times in recent years.

These are the 4 biggest logistics industry trends

  1. Robots and automation
  2. Customer centricity
  3. Data-driven transformation
  4. Sustainability

1. Robotics and automation

There are many highly repetitive, labour-intensive tasks in the logistics industry, so it is of little surprise that the industry is looking towards modern robotics to increase productivity and efficiency.

Additive manufacturing opportunities in the aviation industry.

The speed and precision of warehouse robots are in high demand, though it comes at a high cost. Investing in robotics is expensive in itself, but it also has a potentially high cost for warehouse workers. Uniqlo, a Japanese clothing giant, has built a warehouse powered almost entirely by robotics, reducing the workforce by 90%.

Robots set to transform human jobs

Does this mean warehouse workers should be afraid of losing their jobs? Not at this point in time.

And although automation in the longer term is likely to reduce the need for humans to perform the most basic logistics tasks, it will, at the same time, generate new types of jobs that warehouse workers can fill with a bit of training.

Automation alleviate the labour shortage

Across the board, industries are experiencing labour shortages due to an ageing workforce; an issue that automation can alleviate.

Global MRO labour shortage

China, the production capital of the world, is already capitalising on the benefits automation brings and has become the largest market in the world for industrial robots.

The use of robotics is spreading

The first wave of robots has entered the logistics industry within the last couple of years, and the use of robotics will expand and grow faster in the industry as the technology matures and becomes more affordable.

Connected the dots: Exploring an industry driven by IoT.

Beyond the horizon, new automated delivery vehicles and trucks will move the transformation of logistics even further. With close to no downtime, a fleet of automated vehicles can transport goods with new levels of efficiency and safety.

2. Customer centricity

We live a connected life where apps, advanced GPS-tracking, and cloud computing makes it possible to create a level of transparency in logistics that was inconceivable only a few years ago.

New technology provides new possibilities, but it also raises the bar. Customers have high expectations when it comes to tracking, speed, and predictability.

Therefore, it’s probably no surprise that the survey study from Logistics Management concludes, that one of the primary drivers of the digital transformation in the industry is to increase the ability to respond to customer expectations.

Enabling higher efficiency

A customer-centric business model seeks to make details about shipments available and increase flexibility in the supply chain. According to the DHL-study, a customer-centric business model will be key to success moving forward.

The customer-centric approach also provides the logistics company with valuable insight into the customers’ needs. This enables higher efficiency so even though it’s a customer-centric model, it is also very much a tool to develop the internal workflow of logistics companies.

The ambition to meet customer's expectations will continue to drive the digital transformation forward, especially within, but not limited to, e-commerce.

Lufthansa Technik's leading digitisation strategy.

3. Data-driven transformation

Access to the Internet and data connectivity will expand further in the coming years. Areas without access to the Internet and general connectivity issues will soon be a thing of the past. With increased and more reliant connectivity, the Internet of Things (IoT) is expected to be adopted widely in the field of logistics.

How can executives make IoT a reality?

Initially, logistics companies may be concerned about the security and total costs of development and implementation of IoT solutions. The benefits of these new applications – ranging from increased efficiency, real-time transport visibility, smart warehousing, and predictive delivery – more than makes up for the expected teething issues.

In fact, IoT represents a whopping $1.9 trillion opportunity for the global logistics industry, according to DHL.

AI-powered analytics

In order to realize this tremendous potential, a logistics company needs to establish a system which can collect data, analyse it on its own and suggest adjustments to the processes, perhaps even implementing these changes on its own. That requires a smart system. It requires a system built with AI, or Artificial Intelligence.

AI has quickly moved from niche to mainstream in the private market as programmers have found applications for this technology in a series of smartphone apps. Slowly, but surely, the business sector is starting to catch up, eager to benefit from the lucrative promise of making machines think and act by themselves.

With AI, a programme can find patterns in large amounts of data and, for instance, direct delivery vehicles according to traffic or predict when customers in a specific region need new deliveries.

Predictive maintenance & the road to a proactive supply chain

When you combine IoT, robotics, and automation with new connectivity and wireless technologies, and add AI-analytics to the mix, the future of logistics may look quite different from today. However, that future is still far away.

Slow digital adaptation

One reason for the slow adoption is that logistics companies don’t seem to be investing enough into various digital technologies.

The study presented by Logistics Management magazine reveals that more than 63 percent of the respondents characterise their company’s digital efforts as being either “slow adopting” or “mainstream”, indicating that the companies invest quite little in the transformation or simply follow the trend in the industry.

The top 10 risks facing the aviation industry.

At the same time, one of the most significant barriers to supply chain transformation, according to the survey, is a lack of understanding of digital technologies as well as a general cultural aversion to risk.

To that end, it would seem that there is a notable potential for logistics companies who can bridge the knowledge gap, embrace the risk and move beyond the 63 percent to become digital leader using data to advance.

4. Sustainability

It’s no longer a matter of opinion and internal strategy whether to work to decrease one's carbon footprint or not. It’s business critical.

Around the world, governments are working on policies to restrict the production and sale of diesel and petrol vehicles in the coming years, forcing the logistics sector to rethink their business models and assets.

The biggest MRO disruptions.

The UN has created 17 Sustainable Development Goals in collaboration with representatives from key international industries and organisations. The so-called SDG’s has gained a lot of traction, and companies all over the world are implementing them in some form into their business plan.

(Still) Going green

Sustainability is no new trend in the logistics industry, but in the coming years the demand for more sustainable solutions will grow, and how logistics companies choose to implement these could affect the face of the industry.

There is a multitude of technologies on the horizon that might help minimise the industries carbon footprint, like electric and hybrid vehicles, and AI-powered systems that lower time and fuel consumption.

One example of green thinking in action is DHL’s new City Hub trailer; a customised trailer which can carry up to four containers for the DHL Cubicycle – a cargo bicycle explicitly designed for deliveries in the inner part of congested cities. The solution dramatically reduces emissions by minimising the mileage and time spent on the road in urban environments.

On the more practical side, the iconic logistics container is expected to evolve in the near future. So-called smart containerisation formats are intelligent and modularised, which allows for flexible loads and more efficient space utilisation.