The logistics industry faces a huge battle in 2018. Demand is increasing faster than anyone could have predicted, and new technologies are disrupting the market. However, logistics professionals can get ahead of the curve by knowing what trends to expect in the coming year that will require a reevaluation of logistics strategy in 2018.
The Evolution of LTL Shipping Practices
Consumers Will Demand Faster Turnaround Times on Last Mile Deliveries
Customers have demanded faster deliveries for several years, especially following the rise of Amazon Prime. Customers now want products within 48 hours of ordering, if not the same day, and they are willing to pay an extra premium to get their products faster. For manufacturers, distributors, and logistics professionals, a reevaluation of logistics strategy will squarely focus on shorter turnaround times on last-mile deliveries, and the trend is expected to continue shrinking. Amazon is now offering same-day and two-day delivery cheaper, if not free, then their competitors, and Walmart has followed suit with a similar service. As a result, logistics professionals will need to work faster, harder and with fewer resources to meet rising demand and stay competitive. Instead of focusing solely on perfect order deliveries, shippers will begin working more on just-in-time (JIT) delivery, meaning inbound freight will arrive at warehouse just in time for shipment. As a result, overall warehousing costs are likely to decline as carrying costs decrease.
Companies Will Localize Warehousing Construction
Remember our conversation about just in time delivery. JIT needs reevaluation in logistics strategy is the JIT is affecting where warehouses are built, as well as how they are used. Supply chains and logistics are moving closer to consumers, so having two or three major distribution centers is no longer enough to satisfy the fast delivery times consumers want. Therefore, companies will seek to localize warehousing constructions to areas with higher order rates, asserts On Time Logistics. Instead of larger, warehouses will get smaller, and they will become more numerous and regional.
Infrastructure Improvements Will Stimulate Logistics
Although an infrastructure spending bill has not been passed, the Trump administration made no secret of their plans to invest heavily in the nation’s roads, highways, bridges and transportation systems necessary for faster commutes and to make better use of fuel efficiency, reports Christopher Morgan of Fulfillment Services. Think about it: if truckers can get from point A to point B with fewer stops and less risk of damaging tires and other parts of the truck or dealing with congestion, the costs of transportation decrease. This results in less costs to consumers, and shippers can move more product. It is a win-win for both logistics professionals and consumers. If an infrastructure spending bill is passed, it will serve as an immediate stimulus to the logistics industry and again a reevaluation of logistics strategy.
Lines Defining Peak Shopping Seasons Will Blur
The holidays are finally over, but have you noticed that stores and online sales seem to still be growing strong?
Chances are good that you have noticed a continued surge in sales with online retailers and brick-and-mortar stores. The parking lots are still full, but it is now well into the new year, so what exactly is going on? To answer that question, you need look no further than the trends in the reevaluation of logistics strategy that became evident in the past holiday shopping season. It started much sooner than usual, with online and brick-and-mortar sales beginning in early October, explains DB Schenker Americas. Meanwhile, Amazon had several weeks of sales for Black Friday, small business Saturday, giving Tuesday, cyber Monday and green Monday. Now, that excludes the pre-Christmas sales, liquidation sales, the New Year’s Eve sales, the New Year’s sales, winter storm sales and more.
There is a sale going on for everything, and it is not coincidence. The lines defining peak holiday shopping seasons are beginning to blur with traditional shopping. As a result, logistics entities will face added pressure to move more product, adherence to record-breaking deals of the holiday shopping season and provide superior customer service.
SNEW Waves Will Require Reevaluation of Logistics Strategy
Speaking of pressure on logistics companies, have you heard of the SNEW wave? It is not snow, but a combination of factors that impact logistic operations, including social media, news, event and weather data that will impact the reevaluation of logistics strategy. SNEW will become a major buzzword in 2018. As defined by Bridget McCrea of Logistics Management, technologies enabling the faster review of opportunities and threats to logistics will be the cornerstone of using big data for decision-making throughout 2018, and the importance of SNEW will continue to grow.
Logistics Professionals Will Reach New Service Levels in 2018
Logistics professionals will have to consider a reevaluation of logistics strategy in 2018, but understanding a bit more about the top things to expect can help them plan for success. Up next, we will expand this discussion to what other key trends, such as variable logistics options and surges in brick-and-mortar stores, will influence operations and success in the coming year.