The logistics industry is currently facing severe challenges: disruptions caused by the rapid spread of the Omikron variant, labor shortages, high freight costs, and raw material bottlenecks are a burden for companies.
With increasing e-commerce sales, there is growing pressure on shipping service providers to streamline their processes to handle the increased volume of packages and ensure fast and reliable delivery. How can companies deal with these difficulties? And which trends will shape the logistics of the future?
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Skills Shortage Promotes Automation
Currently, most processes in logistics are carried out by people. But it is becoming increasingly difficult to find qualified personnel in the industry. Poor pay and unfavorable working conditions mean that many positions cannot be filled. According to the Federal Association of Road Haulage, Logistics and Disposal, there is a lack of 60,000 to 80,000 professional drivers in Germany. The pandemic has only exacerbated the situation. Drivers, as well as sorting and handling staff, are urgently needed. If the problem does not change, there is also a threat of a supply collapse in Germany.
Therefore, it is essential to automate logistics processes to reduce costs, increase productivity, and relieve staff. Self-driving vehicles, automated warehouses, cargo planes, and bicycle delivery can speed up processes and reduce human error. Many companies, including Amazon, are already experimenting with autonomous delivery vehicles. China is also driving the development of autonomous “mobile mailboxes.” The trend cannot be stopped: the first renamed delivery vehicles will soon be seen on European roads. Modern warehouses are also equipped with automated vertical storage systems that can further increase productivity – you can click here to learn more about their benefits.
Logistics Of The Future: Digitization Enables Cooperation With Several Service Providers
At the moment, most companies in logistics show little interest in cross-company cooperation that offers visible advantages for the sender or recipient – even if subcontracting is carried out on a large scale. Online retailers are dependent on a transport service provider and use local warehouse management systems that do not allow easy linking to multiple external partners. This limits the options available to businesses and customers.
Small companies are often unable to invest in their delivery fleets or develop state-of-the-art transport management software (TMS). At the same time, they cannot afford delays in delivery if they want to keep their customers. For this reason, they must rely on extended cooperation with other service providers. Working together with several forwarders provides clear advantages, ensures a better exchange of information, allows processes to be planned better, and empty runs, delays, and delivery bottlenecks can be avoided. Cloud-based transportation management software already makes it possible to improve supply chain collaboration with suppliers and carriers – without increasing costs and with less work.
Sea, Road, And Air Freight Costs Remain High: Local Deliveries Are Increasing
In recent years, the expansion of global supply chains has led to a sharp increase in sea, road, and air freight volumes. However, the high demand for goods caused by the pandemic has put a lot of pressure on global transport chains. Many ships were under quarantine and could not leave the ports for months. There was a shortage of containers worldwide. Because passenger traffic in aviation had collapsed, transport capacity in air freight was significantly reduced. This led to logistical difficulties, delays, and price increases. Only the big retailers will secure transport capacity by buying transport companies. Large takeovers can already be observed in the USA.
It is currently impossible to say when the pandemic-related backlog will be eliminated. Therefore, it is very likely that air, road, and sea freight costs will stabilize at a high level. This is causing many retailers to rethink: they are ready to switch to sustainable, local deliveries. Appropriate software can help keep local options, coordinate delivery dates, coordinate bulk deliveries, and provide pickup (click-and-collect) options.
Customers Expect More Flexibility For The Logistics Of The Future
The pandemic has changed consumer habits. Most want to decide for themselves when and how their packages are delivered so that they no longer miss deliveries. The demand for same-day delivery is also increasing rapidly. Big players like Amazon and Zalando are already able to offer flexible time slots and delivery options, thereby raising buyer expectations.
For medium-sized and small retailers to remain attractive, they must keep an eye on the competition and rely on flexible IT solutions. Shortly, smaller operations will offer more freedom and flexibility in delivery to meet the growing demands of customers. Here it is worth digitizing most of the processes.
