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The future of logistics: 5 trends to consider

6 minute read

Follow technology trends to make your logistics business more efficient.

Logistics digitization is not a fashionable trend but is an absolute necessity for companies that want to stay afloat in a highly competitive environment. During the Covid19 pandemic, the use of advanced technologies became even more relevant. This is partially explained by increased demand for online purchases and a much greater load on the logistics system. Modern businesses cannot afford to make mistakes. Delivery problems may result in a damaged reputation and loss of customers and revenue. That is why a well-developed supply chain is the foundation of a successful business. Such companies watch logistics industry trends and adopt IT innovations which enhance delivery and reduce logistics costs. Below we outline the innovations trending in 2022.

Digital freight brokerage

Today, many companies produce and sell goods, and many firms rely on transportation of their merchandise to customers. The efficiency of their work depends on effective communication. Freight forwarders and carriers agree on pickup schedules, transport conditions, transport destinations, shipping documents, delivery time, and more. Large organizations have long adapted Transport Management Systems for these purposes. But for small companies, developing complex TMS or buying ready-made solutions is not a good idea. Startups cannot afford to invest in complex logistics software, so they often turn to freight brokers.

In offline mode, freight brokers are human agents who act as intermediaries between shippers and truck drivers. However, in the world of digital transformation, Digital Freight Brokerage software replaces humans and provides fast matching of the parties concerned. To better understand what digital brokerage in logistics is, think of dating apps like Tinder or Bumble. Their goal is to find a perfect match between individuals who seek friendship and love. Freight brokerage apps do the same. The only difference is that they connect senders with truck drivers, allowing fast transportation of merchandise at lower costs.

logistics industry overview
Global  Digital Freight Brokerage Market Size, source: Verified Market Research

5G

5G is the fifth generation of mobile communication, which provides the highest connection speed and lowest latency ever recorded. The new levels of connectivity powered by 5G affect multiple industries. Transportation and logistics management is no exception as 5G facilitates wider opportunities for automation in the supply chain and results in new use cases for freight delivery. 

Imagine, for example, that trucks are equipped with sensors reacting to air temperature and humidity. Knowing the required conditions for the transportation of specific cargo, they will notify of a deviation from the norm, sending an alert to the app through 5G.

technology in logistics
The application scenario of temperature monitoring in cold chain logistics

Another use case can be applied in warehouses and distribution centers where 5G devices can

  • notify when stock levels are low
  • report technical problems
  • schedule service works

Additionally, devices with Augmented Reality can boost the productivity of warehouse managers. Imagine a situation when a warehouse worker must quickly find a product among thousands of similar goods. A smartphone or AR glasses can help them by highlighting the needed item with color or animation. Thanks to 5G, networks can transfer large amounts of data and seamlessly render such images in real-time

Electric and autonomous vehicles

A shortage of truck drivers has become one of the main challenges in the last year. Logistics industry statistics say the lack of drivers peaked in 2021 with over 80,000 job vacancies worldwide. There are many reasons for such a situation, and self-driving cars could become a win-win solution to overcome the staffing crisis in logistics and freight.

Nevertheless, despite the active development of self-driving cars, they are unlikely to solve the problem in 2022. According to the DHL trend radar, this will take at least five years. However, huge companies like Walmart are currently adopting autonomous vehicles, powering their logistics systems with innovations for faster delivery and better UX.

As for electric cars, they will be trending in 2022, providing more economical and eco-friendly transportation. A recent test conducted by a large logistics company Rohlig Suus Logistics has proved their economy. The company experimented with Volkswagen e-Crafters and determined that the cost per 100 km journey was $3.75 with an electric car compared to $8.50 when using a diesel car. This allows a saving of almost $2,500 on fuel per year with an average mileage of 45,000 km.

Considering the significant cost savings and the fact that many countries provide tax incentives to companies using EVs, we can expect EV supply chain growth in the near future.

Blockchain

Blockchain is a decentralized database simultaneously stored on many computers connected to the Internet. While mainly associated with cryptocurrencies, blockchain is increasingly used in other areas, including logistics. 

For example, blockchain allows managing the entire supply chain from factory to consumer. For this, each container is marked with a unique identifier that contains information about the product origin: manufacturer, lot number, expiration date, shipping date, etc. This allows tracking a product at any stage of its life cycle and confirming its authenticity. DHL and Accenture already use this scheme to trace and verify the authenticity of pharma goods.

blockchain in supply chain management
DHL and Accenture use blockchain in supply chain management

Another advantage of blockchain is faster and more economical delivery. According to IBM, the technology can save $38 billion a year thanks to smart contracts automating logistics workflow. In addition, the distribution registry may reduce errors, shorten delivery times, and enable fraud detection.

Eco-friendly warehouses 

With increased attention to the problem of pollution, the eco-topic is becoming more relevant in various spheres of human life. Logistics is no exception. Therefore, eco warehouses are one of the main technology trends to observe in 2022. In addition to reducing a company’s carbon footprint, they bring benefits to transportation and logistics companies, by reducing storage costs and increasing profit.

For example, using robots in warehouses to sort and pack goods can dramatically cut wage costs. Another advantage is that robots provide an additional hygiene measure by minimizing the number of human contacts, making logistics safer. Besides, robots can work in the dark, which means you can save on power consumption, and they don’t need rest or meal breaks, which assists companies to meet or exceed KPIs.

Warehouse management systems (WMS) also contribute to green warehousing. They optimize the use of resources such as plastic, paper, electricity, gasoline, etc., causing less harm to the environment. For instance, a WMS may help warehouse employees synchronize their actions for product packing. A logistics cloud app would display real-time information about the location of goods and allow managers to optimize the packing sequence.

Other green warehousing trends include using solar panels, recycling areas, drought-tolerant plants, low-emitting paint, energy-efficient lighting, and more.

How to keep pace with supply chain trends in 2022

The logistics industry overview shows the increased penetration of advanced technologies into the supply chain. Modern companies automate transportation and use new ways of connectivity to track products at all delivery stages. Digital brokerage, 5G, electric vehicles, green warehouses, and blockchain are technologies that are already in use. Given this, supply chain platform development is what every logistics company needs, whether it is a startup or an enterprise.

At Erbis, we have vast experience in providing digital solutions for supply chain. We partner with clients around the world and are proud that Fortune 500 companies constantly benefit from the software we create. If you need a robust logistics app free of bugs, drop us a line. Our managers will study your project and advise on the best possible solution to implement within expected deadlines.

February 1, 2022
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