6 Trends in Logistics for 2021
The year 2020 has challenged logistics with the demanding task of maintaining supply chain continuity in the face of unexpected and ever-changing restrictions. COVID-19 has forced the industry to adapt to travel constraints and tight security requirements. This has affected logistics trends as well.
According to the 5th edition of The Logistics Trend Radar, a report by DHL, the pandemic has been a catalyst for innovation in logistics. The report also indicates that the main task for the industry over the next few years is to build resilient and sustainable supply chains. What trends will affect this process?
Logistics trends map created by DHL. Source: The Logistics Trend Radar report, 5th edition, published November 2020
The biggest trends in logistics for 2021
Robotization and automation
Robotization is to allow the reduction of production costs, and thus increase the efficiency of companies. As it turns out, in Europe there are on average 114 robots per 10 thousand employees (in Poland it is 46 per 10 thousand employees). Although Poland is not yet among the top countries with the highest robotization rate, at the end of 2020, it debuted on the list of fifteen countries where robots are introduced most willingly (according to the ranking published by the International Federation of Robotics).
As DHL highlighted in the 5th edition of the Logistics Trend Radar, robotics solutions can support logistics teams and will be taking over more and more tasks in the supply chain: from supporting workers in warehouses, through transportation, to the delivery of products to end customers. On top of that, if the repetitive and physically strenuous tasks are automated, employees are able to use their energy to execute more complex processes.
While this trend offers the industry a huge opportunity to increase productivity, it also poses certain challenges. These include ethical issues and balancing automation with the retention of jobs. This comes down to the so-called Future of Work, which will be described further.
Internet of Things
IoT offers the logistics industry a long-term perspective of benefits. Insights coming from the devices that communicate with each other are leading to entirely new solutions.
For instance, Decathlon uses RFID tags (data carriers that can be attached to movable objects) to identify, locate, and deliver products to its stores. DHL uses sensors that were originally used to monitor whether the employees lift packages in an ergonomic manner. During the COVID-19 pandemic, they alert the employees to keep the social distance.
However, IoT in logistics comes with its own challenges. First and foremost, supply chains that operate using this technology need to be secured against cyber attacks. Also, the fragmentation of data needs to be reigned in and transformed into harmonized models with comprehensive meaning.
Big Data analysis
There is no doubt that the data-driven approach is changing many sectors, including logistics. Automation tools and IoT-connected devices generate massive amounts of data. Big Data analysis enables you to see a big picture – it helps to analyze supply chain processes and identify the weak points.
It can also increase efficiency, improve customer service, reduce risk and even inspire the creation of new business models. It merely can, because the processors and analysts of this data must step up to the task of:
- providing quality data – to make effective decisions it is not enough to have the data, it must be proper data;
- maintaining data hygiene – although a lot of information is available, not all of it is accurate, structured or simply necessary;
- ensuring data security, privacy and confidentiality.
If these conditions are met, Big Data in logistics will help improve visibility and transparency during transportation, and detect any unobvious trends.
Technology never goes unnoticed and can influence social transformations, often stirring up great emotions. So how does this apply to changes in logistics?
Social and business trends
Future of Work
The Future of Work is a set of trends that aim to answer the question of how to secure workplaces against the impending wave of digitization and automation. Or perhaps rather how to ride that wave, since adaptation is the key to success. According to a McKinsey report, with the existing technology, even 49% of paid work done by humans could be automated as early as 2017. No wonder that the advancing automation is making workers anxious about their jobs.
However, these concerns are ill-founded. It is not about replacing people with robots, but about people learning to cooperate with robots, and thus gain time and space for other tasks. Automation does not reduce workplaces but changes the scope of work. It’s a shift from repetitive operations to tasks requiring creativity and abstract thinking. Robotization and automation may actually increase job satisfaction: they make room for new, more rewarding tasks and create flexible work environments.
Nevertheless, the challenge is to overcome employees’ fears and provide them with sufficient training and equipment.
New approach to packaging
COVID-19 has accelerated the development of the e-commerce sector. In 2020, the number of online shoppers in Poland alone reached 73%. The continuously growing number of shipments forces the changes in packaging. The sought after solutions should allow for transporting more packages and make product packages more environmentally friendly.
Both big and small brands are adopting green solutions. Colgate-Palmolive has announced that by 2025, all packages for their brands will be made from recyclable materials. 60% of Coca-Cola packages are recycled and reused. L’Oréal presented a concept of a paper bottle, while IKEA designed one of its mattresses to be rolled up for transportation.
We need solutions that are cost-effective, recyclable or biodegradable, and space-efficient. This will enable transportation of bigger loads while reducing costs and emissions.
The new approach to packaging stems from the sustainable logistics trend, which involves optimizing processes within the supply chain and cutting emissions. The idea is to reduce fuel and energy consumption and, in the long run, to make quiet and emission-free night-time deliveries a reality. (Currently, trucks over a certain weight are not allowed to travel at night and on weekends – the regulations slightly differ in each country).
Reducing emissions is not the main goal of moving more freight. The primary objective is to reduce the overall impact that the expanding logistics industry has on the environment.
A 2020 report by the World Economic Forum predicted that by 2030, the growth of e-commerce will result in 36% more delivery vehicles, and this in turn will increase carbon emissions by another 32%
To prevent this, we need new energy sources, “green” replacement for currently used packaging, efficient load scheduling, and fleets of zero-emission delivery vehicles.
Technological, social and business trends in logistics are complementary. In the coming years, we need to acquire more data and process it carefully to draw actionable conclusions. We will automate processes. All this is to mitigate the destructive impact on the environment, cut transportation costs and increase the capabilities of the logistics industry.
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