With the rise of e-commerce, the value of logistics has grown. Logistics professionals can no longer simply go about standard operations, and the days of peaks and lulls have ended. Yet, some may be asking, “why has demand increased so much?” To answer that question, let us turn our attention to some of the key top logistics trends we’ll see over the next 12 months, in part as a response to the growing customer experience movement.
The Evolution of LTL Shipping Practices
Variable Logistics Operations Will Become Standard
Imagine what work would be like if you could offer all customers free two-day shipping. It sounds great, but it comes with problems. Some customers do not want two-day shipping. They may want three-day shipping, or they may need ship-to-store shipping options. Even the best shipping options do not necessarily work for each customer, and customers will demand variable shipping options more frequently in 2018, reports Kushal Nahata of FarEye. This need is a partial product of the rise of package theft, and since logistics service providers may have a proverbial mountain of packages to deliver, they cannot realistically wait for signature on delivery for each package. Therefore, the burden of ensuring successful package delivery will fall to consumers, but logistics providers will need to set as a priority in looking at all top logistics trends a mechanism to offer customers the ability select a delivery option that reduces risk for theft.
Brick-and-Mortar Stores Will Stay Relevant
As recently as last year, we predicted the number of brick-and-mortar stores to decline significantly, but we were slightly wrong. While some retailers, including Sam’s and RadioShack, have closed significantly more stores over the last year, consumers are flocking back to brick-and-mortar stores, says DB Schenker Americas.
Variable delivery options are one of the of the top logistics trends showing that consumers are beginning to visit brick-and-mortar stores with greater frequency, but their interest in use of online e-commerce shopping portals has not declined. Consumers are actively engaged in the shopping experience on their own devices, even while in the store looking at the same product on the shelf. This is the omnichannel supply chain, and it will require shippers to rethink their strategies. Instead of keeping all products at one location, they will need to begin varying product availability, and the 80/20 rule will not necessarily apply anymore.
Companies Will Aim to Improve Shipper-3PL Relationships
As demand for 3PLs grow, supply chain and logistics professionals will face greater pressure to improve shipper-3PL relationships. Instead of treating logistics providers as unavoidable, shippers, in their closer look at top logistics trends, will look at logistics providers as a strategic partner in ensuring adherence to customer expectations and delivering on such expectation. To stay competitive, logistics companies will begin offering more unique services, such as invoice auditing, automated freight classification, better rates on dimensional pricing, and a host of last-mile services, which Amazon has already taken great strides in with the creation of Amazon Key.
Transparency is Inherent in the Top Logistics Trends Shaped by Customer Experience
Transparency is everything in logistics. Consumers do not want to just know where products come from. They want to know how they were made, how they were moved, who they affected, who made them, what the wages of the people who made them were, whether people are being treated fairly, if products are sustainable and every other question you can think of, reports Christopher Morgan Fulfillment Services.
Fortunately, the Internet of Things and newer technologies will be used to provide greater transparency into activities, and while blockchain technology has been widely touted as the ultimate solution to transparency, it does have some real problems when applied to shipment tracking. Proprietary information can be put at risk when used in blockchain technology, so blockchain technology is more likely to be used in areas that carry less risk and have fast value in logistics. In other words, blockchain technology will be more about shipment tracking than providing complete shipment and product transparency.
Openness to New Technologies Will Increase
Logistics professionals have an opportunity to push operations forward, increase productivity and leverage new technologies in 2018, but the ability to adapt will be priority in the mix of top logistics trends to arise from advanced technologies in the coming year. Logistics professionals must consider and evaluate the utilization new technologies, services and outside help from technology providers, either by a 3PL or some other entity. Inter-industry collaboration, even with competitors, are on the rise to beget new service lines, innovative technology, and overall process improvement in order to better deliver product and meet demands of the customer. In turn, this will redefine competitive advantage, transforming it from a state of secrecy and competition to a collaborative effort to the real customers, deliver on promises and exceed expectations.
The Big Picture of Logistics
Logistics is moving forward, even as the industry starts to curve in on itself to handle increased demand, pressure to manage returns, fill more orders, and adhere to the latest regulations. Logistics service providers will be integral to the success of shippers in 2018, but the top logistics trends that affect the shipper can differ from those affecting third-party logistics providers, procurement professionals and freight shipping. The crux of these top logistics trends falls to the use of technology. As we continue in this logistics trends series, in the next few posts we’ll focus on the logistics technology trends shaping 2018.