We have discussed how manufacturers are changing the landscape through surprising, innovative trends. Changes in manufacturing processes, which will increase production, lead to one ultimate result–the logistics industry must change. For third-party logistics providers (3PLs), logistics industry trends will dramatically affect how logistics providers of all sizes operate. Take a look at some of the top trends to expect in 2016 for the logistics industry and how they will inherently relate to the merger and acquisition trends.
Then at the bottom, you can take a look at a fantastic logistics industry trends infographic from our logistics friends in Canada, Morai Logistics.
Increasing government regulations around the globe are driving a push towards a more sustainable fleet and means of transportation. Although logistics providers have been gradually switching towards sustainable efforts, such as the use of natural gas-powered vehicles, the push for sustainability in 2016 will exceed that of previous years, explains Jordan England-Nelson. Furthermore, logistics provider who avoid implementing sustainability measures may end up having to pay fines or penalties for violating government regulations.
From RFID sensors to large-scale monitoring of employee actions, the Internet of Things (IoT) will become more prevalent as more smart devices come online. As a result, logistics providers will be able to track inventory faster and more efficiently, which will reduce the amount of time required in shipping processes. Essentially, consumers will be able to get products faster.
In close relation to reduced wait times for the end user, augmented reality will make the picking process, as well as many other processes in logistics management, simpler. For example, augmented reality-enabled glasses are currently being used by Volkswagen, explains Ludger Schuh. Augmented reality, sometimes referred to as virtual reality, will further drive the design and use of smart warehouses for manufacturers. As a result, augmented reality must cross the boundary between manufacturers and logistics providers, which will streamline the manufacturing and shipping processes around the globe.
DHL put out a fantastic video you can watch below showing how AR is used in warehouse picking and slotting:
Not only does augmented reality pose benefits for picking processes, but it can be used to add a new level of finesse to the creation of delivery schedules and transportation routes. Essentially, augmented reality will increase the amount of control logistics providers have over preparing to respond to any problem, at any time, at nearly any location. Keep an eye out on Augmented Reality as a standout from all the other logistics industry trends. Truly, the possibilities may be endless in logistics application.
While many 3PLs may not want to share data, sharing data is rapidly becoming the norm. By working together, logistics providers can take on larger contracts to satisfy the increasing demands of a customer and retailer base. Additionally, increasing partnerships and collaborations will help logistics providers meet the demand for more products, faster, and at a reduced cost. This will be especially true as the driver shortage continues.
When the logistics industry experienced the record-breaking growth at the end of the 20th century, outsourcing manufacturing and shipping processes overseas seemed ideal. However, overseas markets are changing, and US citizens are demanding homegrown solutions. Furthermore, nearshoring or reshoring provides many benefits to customers, such as reduced delivery times, reduced transportation and shipping costs, and better communication with the manufacturer for customer service.
Nearshoring also allows manufacturers and logistics provider is to save money. For example, collaboration between the manufacturer and shipper can be increased by relocating the site of production closer to the site of shipment. As a result, misunderstandings will become less prevalent, which will save money for all parties. Ultimately, nearshoring will be one of the biggest logistics industry trends to watch for in 2016.
Over recent years, 3PL have typically served a small zone, such as delivery within 100 miles. However, the modern consumer is driving and expansions of services to include the entire supply chain. Once, 3PLs stood out as the omnipotent entities of the less than truckload Empire. unfortunately, this business model is starting to fail, and today’s 3PLs need to provide holistic solutions for all parties involved. This goes back to recent conversations about lean business processes. And in fact, at Cerasis, we are undergoing this evolution ourselves as we expand mode expertise, technology for e-commerce and reverse logistics, and plans for more robust small package offerings.
While the logistics and manufacturing industry focused on maximizing efficiency, the shipping world sought to increase efficiency as well. Unfortunately, logistics providers became rigid, unwilling to adapt to changes at a moment’s notice. 2016 will see agility and flexibility replace the ideal of lean systems to adapt to needs almost instantaneously, and agility will become the focus of many logistics providers.
Although these six logistics industry trends represent major strides, as well as hurdles to an extent, for the logistics industry, few trends compare to the potential impact of mergers and acquisitions (M&As). Globally, mergers and acquisitions will provide the catalyst for all of these trends, and medium-sized businesses will be faced with the choice between growing and acquiring other businesses or being acquired by a larger logistics provider.
The importance and role of mergers and acquisitions in the global logistics market cannot be understated. In fact, M&As have become a fundamental part of growing a logistics entity. The following infographic, “9 Facts Looking at the Trend of M&A in 3PLs,” will help you understand why M&As will play this defining role in the logistics industry.
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