Looking back at the history of logistics, it has progressed to a level way above what one would have even imagined. Logistics and Supply Chain Management, today forms the backbone of any product-intensive industry and plays an important role in enhancing efficiency of service-oriented organizations. The major enablers for this have been technology and globalization.
Initially used by the military to get the goods at the time of battle, the logistics industry evolved during the world war, as this medium was used to supply the requirements to the armed forces. Post Second World War, logistics shifted from combat to the business sector, as the need for trade generated. From being a helping hand to the business sector, to becoming the backbone of operation management of a company, Logistics industry has come a long way.
A quick look at the facts reveals:
53% of all current transportation costs are attributed to last mile deliveries
70% of the companies say that they would be using cloud computing in near future.
19% is the annual growth rate of the global smart sensor market that is expected to reach $60 billion by 2022
$4.4 Billion is the expected revenue to be generated from shipments of smart glasses for logistics by 2022
In such context, it becomes important to discuss the key drivers of logistics in the next few years in terms of technology expansion, its sustainability and the effect of global pandemic.
Technology- the Enabler: The development of technology is revolutionizing the way world is doing business. From understanding the gaps, gathering resources, plugging the gaps with feasible solutions, to delivering finished goods to the consumers; technology has been playing a dominant role.
Technology integration and enhancement has also improved the supply chain management by reducing errors and cost. Integration of IT into the logistics industry such as ERP, Big Data, IOT, vehicle telematics etc. has done wonders. Some remarkable examples are real-time tracking of the product until it reaches the end customer, self-drive technologies used in vehicles to overcome the shortage of drivers, advanced features as geo-fencing etc.
Digitization of the operations in the logistics sector is of prime importance. It would play a key role in decreasing the errors due to inefficient route navigation, accidents, shortening delivery schedules, protection from theft, etc. The companies now understand the enabling-nature of technology, which is clear from the fact that 70% of the companies agree that they would be using cloud computing in their business in the next few years.
Focus on Sustainability: The climate change and the ecological imbalance across the world have changed the perspective of businesses towards their business practices. 94.4% of businesses in logistics believe that moving to sustainable practices is important for the future. The trend is not just enforced by the Governments, but also demanded by the consumers who are ready to make extra payment for sustainable shipping and logistic practices. Businesses now understand that small investments towards sustainability today will lead to much bigger returns in the future in terms of cost reduction, customer loyalty and Government support.
Post Pandemic effect: Who expected the world to go into a lockdown situation in 2020? No one. The global pandemic of COVID-19 gave a severe blow to the global trade and supply chain. The companies which relied heavily on trade to China took the biggest hit. Businesses have learned the toughest lesson, and one of them is to not put all your eggs in one basket. This will lead to generation of new hotspots for trade across the world, and looking at the trends, Africa will be one of the biggest beneficiaries. Click here to see our view on the Logistics in Africa.