What Does The Future Of Logistics Look Like?

Future Of Logistics

Transportation and logistics, like most other industries, are undergoing tremendous transformations, which, like all change, bring both risk and opportunity. On the horizon lie new technology, new market entrants, new customer expectations, and new company models. To address these issues, the sector may evolve in a variety of ways, some evolutionary, others revolutionary.  Ultimately, though, there are four major areas of change that third party providers or logistics companies should be paying attention to right now, as well as numerous potential sector prospects.

Four areas of change

Customer expectations – Both individuals and businesses want things to be delivered more quickly, more conveniently, which is precisely what Rhenus High Tech offers their clients. Especially in the context of consumers, though, they want services either inexpensively or for free. Manufacturing is getting more individualised, which helps customers, but causes logistical issues. When all of this is considered, the industry is under tremendous and growing pressure to provide a better service at a cheaper cost. It can only expect to do this by making the best and most reasonable use of technology available.

Technology – Examples of technical developments include data analytics, automation, and the ‘Physical Internet.’ This means lower costs, improved efficiency, and the possibility of genuine breakthroughs in how the industry runs. However, ‘digital fitness’ is a challenge for the business, which is currently lagging many of its clients in this area. Attracting the right individuals is vital, but having the right plan is even more critical. An ever-increasingly competitive environment is also a factor to consider. Some of the sector’s clients are starting their own logistics firms, but here is where experience counts.

New entrants to the market – Are figuring out how to carve out the most profitable parts of the value chain by leveraging digital technology such as YouTube, or new ‘sharing’ business models, and they don’t have asset-heavy balance sheets or clunky current systems pulling them down. ‘Sharing’ is a significant theme in logistics right now, from Uber-style approaches to last-mile deliveries to more formal joint ventures, and corporate partnerships.

Rethinking collaboration – The whole industry is redefining cooperation, but much of this is impeded by variations in everything from shipping sizes to processes, all the way to IT systems. The Physical Internet, together with improved standardization in logistics operations, has considerable potential for the sector.

Prospective futures

What will the logistics industry look like in the next 5 to 10 years? Who knows, it’s a highly open subject. If you   take a deeper look though, at how some of the industry’s most significant changes may connect, you will likely find that the future possibilities involve combinations of the above areas of change and look a little something like this:

Start-up, reshuffle – newcomers in the form of start-ups have a greater influence in this situation. The most difficult and costly final mile of delivery becomes more diversified, with new technologies such as platform and crowd-sharing systems being used. These start-ups will work with already established firms to supplement their service offerings.

Sophisticated competition – in this case, the competitive field develops in a different direction, as significant industrial or retail suppliers and customers become competitors in the logistics sector too, not only managing their own logistics but also converting that knowledge into a workable system.

Domination – Lastly, in this case, present market leaders strive for a dominant industry presence by absorbing smaller firms, attaining size through mergers, and obtaining creativity through the purchase of smaller entrepreneurship start-ups.