Five trends that are poised to shape the logistics industry in 2022

The logistics sector is witnessing major transformations owing to the fast-paced change in consumer habits and preferences. Businesses are investing in supply chain technologies more than ever as crises like the pandemic have exposed the gaps and pain points in the logistics industry that are yet to be addressed. According to a recent report, 50% of global product-centric enterprises will have invested in real-time transportation visibility platforms by 2023.

The e-commerce industry in India is flourishing and much of its success can be attributed to the logistics companies’ ability to keep pace with modern-day demands. An efficient and optimized supply chain is the key to success for most businesses and technology is clearly imperative today to combat challenges and increase efficiency. Going forward, new technologies will make supply chain operations smoother and hassle-free.

Listed below are a few logistics and supply chain trends that highlight the key areas of change in the sector going forward in 2022.

Digitisation will gain more prominence

Digitisation enables supply chains to be faster and more granular. There is an increased need for end-to-end transparency throughout the supply chain so stakeholders can make decisions based on real-time insights. In the coming years, companies will invest heavily in cloud technology and leverage data to optimize processes and sense disruptions in the supply chain. While until recently data silos were a problem, digitization can eliminate risks associated with data silos and integrate processes. It keeps things cohesive and connected, aggregating information from across the entire supply chain, improving forecasting accuracy and enhancing cash flow.

Drone deliveries could be a game changer

Drone deliveries is a new trend with the potential to change the logistics landscape forever. Drones can escape the traffic menace and reduce carbon emissions, promoting a more sustainable transportation practice. The Drone Liberalization Policy introduced this year would be a major catalyst in boosting the drone delivery service, further paving the way for greater innovation and widespread adoption of drones by logistics companies in the future. In this backdrop, the drone logistics and transportation market is poised to become a USD 11.20 billion market in 2022. Apart from vaccines and pharma supply chains, in the coming years, drones would be largely used for food, grocery and medicine delivery.

Last mile services will assume greater importance

Consumers today want quicker and speedy delivery and companies are striving to develop new technologies that can help them resolve the last mile problem. Crowdsource technology is a key trend to watch out for as it facilitates on-demand deliveries. With retail giants like Amazon catering to customers with their lightning speed delivery, it has raised the bar for other companies. Logistics companies that are lagging behind in terms of last-mile delivery are at the risk of losing their business to their tech-driven rivals. With consumers’ heavy reliance on online shopping and want for instant gratification, last-mile delivery is no longer a nice-to-have but a prerequisite to survive in this competitive market. Drone deliveries are picking up in congested urban areas and the global last-mile delivery market is expected to reach USD 200.42 Bn in 2027.

Green vehicles will gain more traction

With rising concerns about carbon emissions owing to increased demand for logistics services on account of expanding e-commerce, there is a shift towards greener transportation alternatives. The global electric truck market is projected to reach $1,893.1 million by 2027 and this growth can be partly attributed to logistics companies replacing their fleet with greener vehicles. Not just trucks, electric two-wheelers, three-wheelers and light commercial vehicles are also in demand as adopting such sustainable practices provides remarkable benefits such as lots of torque, low levels of pollution, reduced maintenance cost among others.

Reverse logistics operations will become more optimized

Customer product returns, failed delivery attempts and damaged product returns necessitate optimization of reverse logistics. The return experience matters just as much as the delivery experience and companies are leaving no stone unturned in enhancing customer satisfaction. Companies will invest in big data and blockchain technology to achieve efficient, customer-centric reverse logistics. Companies are focused on reducing fleet costs arising from reverse logistics (both planned and on-demand) with data reporting enabled on every node in the supply chain.

In a nutshell

With digitisation leading the way and supply chain companies resorting to automation and new transport concepts for menial, repetitive tasks, it is safe to say that there will be significant transformations in all facets of the logistics industry in the coming years. The key trends mentioned above will play a pivotal role in addressing new customer requirements and proactively resolving supply chain challenges with advanced forecasting approaches aided by technology.

This article is authored by Mr Hector Patel, Executive Director, and Board Member, Jeena & Co. Mr Patel showcases deep domain expertise in logistics operations, with hands-on experience in setting up the complete work-chain from operations to closing business, both at the national and international level.

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