Logistics is considered one of the most critical pillars of every successful business as it supports enterprises to deliver their end products to customers seamlessly. It is a phenomenal industry that provides a broad range of services, including supply chain management, sourcing of goods, supply chain transformation, manufacturing, inventory, handling, transportation, storage/warehousing, and delivering goods via B2B, B2C, or C2C supply chain networks. The rising technological innovations have left no sectors untouched; from the healthcare sector to logistics and supply chain, every industry has seen a massive digital transformation.
Enhancing mobility and increasing productivity have become the two major goals of every logistic company. The entry of new technologies like artificial intelligence, analytics, and automation has made massive advancements in this industry.
If we take a look at the logistics market size, the statistics are enormous.
Logistics industry market size
The logistics industry is contemplated as the backbone of international trade. As per Statista, this industry has recorded a worth of over 5.5 trillion euros in 2018. In 2020, the contract logistics market was sized at around 219.1 billion euros and is expected to reach 280.8 billion euros by 2025.
These statistics justify how big and tremendous the logistics industry is.
Due to the pandemic, the consumers turn to online shopping, which leads to a sudden increase in delivery demands. This puts the logistics and supply chain industry under immense pressure. To cope-up with such rising markets, the logistic sector has stepped into the world of technological advancements and introduced logistics technological solutions. Today, from intelligent warehouse management to last-mile delivery solutions, this industry has evolved and brought notable trends for 2021.
This post will describe what innovative trends and technologies the logistic sector has opted for digital transformation.
Top logistics trends to look for in 2021
Staying updated with the latest trends and using them in the existing business operations efficiently help logistics companies to gain a competitive edge. In this section, we have mentioned the cutting-edge trends that have completely revamped the logistics and supply chain industry and provide immense opportunities for businesses to achieve their target goals.
1. Artificial intelligence
A massive part of the logistics and supply chain industry relies on data. The use of AI in this sector helps companies manage and control comprehensive historical and real-time streaming data. By combining with Machine learning algorithms, AI allows companies to keep close control of the demand fluctuations and provide valuable predictions based on the data. Apart from it, AI provides several other assistances.
It allows managers to prepare and plan supply chain processes and find the best possible solutions to decrease operations costs. Moreover, AI-based cognitive automation technology helps in automating administrative tasks and eliminates the chances of errors.
2. Hyper automation
Automation is another face of innovation in the logistics and supply chain industry. At first, the logistics sector uses automation technologies like AI, ML, and RPA on individual levels to enhance logistics efficiencies. The separate use of such technologies only results in increasing the costs.
But the arrival of Hyper automation eliminates such additional expenses. Hyper automation is a perfect combination of innovative technologies including AI, ML, IoT, Intelligent document processing, chatbots, blockchain, mobile applications, and Robotics process automation that help companies manage sales, supplies, purchases, distribution, and customers seamlessly.
Hyper automation has become another significant investment of logistics businesses towards digital transformation, making their business more digital.
To get additional insights on these technologies and unlock more opportunities, check this research-backed infographic about digital manufacturing & resilient supply chains in the post-pandemic era.
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3. Warehouse automation
Warehouse management and operations are significant for the logistics and supply chain industries. And the introduction of warehouse automation brings new efficiencies for them. Warehouse automation refers to automating the movement of inventory with minimal human assistance.
It is not a new concept in this sector; AGVs (automated guided vehicles) and AMRs (autonomous mobile robots) are already active in the industry. Due to the surge in the eCommerce market, warehouse automation has witnessed massive demand, and it comes in the next phase of evolution that contains robust integrations of IoT technology.
Amazon is one of the best examples of warehouse automation trends, with robots closely working with cloud-based logistics software solutions.
4. Last-mile delivery
Last-mile delivery systems are among the trending logistics and supply chain sectors that refer to the movement of goods from the source to the final delivery destination. To automate the delivery processes, eCommerce businesses prefer this approach.
The last-mile delivery systems come with IoT, beacons, and Bluetooth that help companies stay aligned with their deliveries and offer better customer experiences to their end-users. This system contains the complete order details and notifies both the sender and receiver of the orders. The last-mile delivery system approach starts when the order arrives at the transportation hub and ready to move to the final location. It keeps the entire tracking as this approach face a few challenges as well, including-
- Traffic congestion,
- Customer nuances,
- Government regulation, and
- Delivery density
Drones are the best examples of last-mile delivery systems currently being used at a few locations around the United States.
5. Big Data & Data Analytics
Data Analytics is one of the best practices that help in enhancing warehouse productivity by providing actionable insights related to improvements, performance, and resource utilization. The data analytics further supports companies in optimizing supplier pricing, managing inventory levels and risk management reports. Organizations conduct this practice to ensure the smooth running of operations in a timely and cost-effective manner.
6. Internet of Things
Logistics companies now understand the importance of upgrading their existing supply chain environment with evolving technologies like IoT. The companies that have migrated to modern solutions before this pandemic are better positioned to manage their logistics and supply chain operations. The use of IoT in logistics has enhanced the visibility of the complete supply chain process and improves inventory management efficiency to a great extent. IoT allows companies to get real-time information of their goods, monitor the conditions, keep track of the shipment process, track goods from the factory floor and more.
According to market reports, the global Internet of Things (IoT) in retail market size is expected to grow from USD 14.5 billion in 2020 to USD 35.5 billion by 2025, at a Compound Annual Growth Rate (CAGR) of 19.6% during the forecast period. The potential of using IoT in logistics and supply chain helps companies to keep their partners, customers and workforce on the same page.
Robotics has already gained tremendous popularity for eliminating the extra cost spending in distribution center operations in the logistics and supply chain industry. Amazon, the leading eCommerce giant, has stated that its operational costs have been reduced to 20% after implementing robotics in its business operations. The use of robots helps logistics companies to achieve operational efficiency, encourage savings from stock shortages and eliminate administrative errors. As per the market reports, The global logistics robots market size was USD 5,512.6 Million in 2020, which is expected to reach USD 14.93 Billion in 2027 and register a CAGR of 15.3% during the forecast period.
Currently, robots are used in warehouses to track and manage inventories. Still, soon, they will move to shopfronts to assist retailers in multi-order pickings and help customers in their shopping. The AI enablement helps them in performing customer interaction. With robotics, retailers can move their manual workforce to other essential business operations and achieve higher productivity.
8. Cloud Computing
Cloud computing is transforming the logistics and supply chain industry in many innovative ways. From efficient inventory management, data security to disaster management and improving the interaction among the company and partners, cloud services play a significant role in uplifting the logistics processes.
Cloud-based logistics solutions help companies collaborate securely, share the data, and make smooth communication among many stakeholders without the high cost. Cloud computing comes with an ideal cost structure and makes collaboration simple; it establishes a more strategic approach for inventory deployment and offers complete supply chain visibility. These reasons have made logistics companies shift their focus on cloud computing and adopt this technology in their day-to-day business operations. If we look at its market size, the Cloud Supply Chain Management (SCM) market is expected to grow from USD 3.26 billion in 2016 to USD 8.07 billion by 2021, at a Compound Annual Growth Rate (CAGR) of 19.8% during the forecast period.
Blockchain in the logistics and supply chain industry helps companies keep a distributed and decentralized ledger that reduces clerical errors and provides efficient records of shipping containers. The blockchain transactions are transparent and secured as it has a decentralized ledger system that keeps track of transactions of the entire logistics chain. Moreover, with blockchain, the companies can get hassle-free approvals and clearance at the time of checkpoints. Chronicled, a California-based company, is using blockchain technology in its logistics operations.
The post-COVID 19 global blockchain supply chain market size is expected to grow from USD 253 million in 2020 to USD 3,272 million by 2026, at a Compound Annual Growth Rate (CAGR) of 53.2% during the forecast period, fueling the demand and lucrative opportunities for the vendors using this technology.
A radio-frequency identity chip (RFID) is generally used to provide real-time tracking information. The logistics companies use the potential of RFID to optimize the route and real-time tracking of their goods. With this technology, the companies get the precise location and real-time information of the quantity. Also, it allows for tracking down the happenings across the supply chain seamlessly. Moreover, the company can assist or change the route of their delivery vehicles if any unpredictable events occur. This next-gen advancement helps companies to perform better and achieve targets efficiently.
The World is Changing with Digital Transformation, Are You?
With the rising customers’ demands and other factors, the logistics and supply chain industry face some challenges. But the rapid technological advancements come as a savior for this sector. Technologies like IoT, AI, RPA, Blockchain, and others help companies significantly to overcome these challenges and deliver a seamless experience to the end customers. As digital advancements continue, companies should adopt this digital transformation quickly to gain a competitive advantage.
If you are also from the logistics industry and looking for ways to enter the technological world, we can help you. We at Rapidops provide exceptional digital transformation services that allow you to take your business to the next level. Be it data analytics or automation, you can entirely rely on us for your business progress.
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