In the first part of our series on disruptive technologies that have been revolutionizing the logistics industry, we outlined four trends that have been critical for pushing the development of this sector much further than operators could have ever anticipated.
To continue the topic, there are still five additional logistics trends that operators should look at more closely because they are changing the way that the industry does business.
5. Understanding the Importance of Cybersecurity Imperatives
The importance of establishing solid and reliable cybersecurity measures absolutely cannot be overstated in this age of technology. Shipping companies that do not devote the appropriate resources and time into addressing and shoring up their cybersecurity protocols cannot ever get ahead of the competition. In fact, they often put themselves at risk of losing valuable time and business.
In order to truly embrace the digital revolution and ensure continued, long-term success, logistics companies must understand the serious threat that digital fraud and data breaches pose.
In Cybersecurity Ventures’ Official Annual Cybercrime Report for 2020, the firm notes, “Cybercrime is the greatest threat to every company in the world, and it is one of the biggest challenges that humanity will face in the next two decades.”
This is a very serious call to action, but the truth is that they are not overstating the issue at all. In fact, the organization estimates that digital fraud and cybercrime are set to cost the global economy upwards of 6 trillion USD every year by 2021. This number has more than doubled from 3 trillion USD in 2015.
Currently, maritime shipping companies are those most frequently targeted in the global logistics sector. Some of the most serious attacks have ended up costing major shipping companies hundreds of millions of dollars.
It is worth noting that the overwhelming majority of logistics enterprises have not made significant investments in shoring up their digital security weaknesses. With ransomware attacks increasing exponentially in frequency, this is a grave and potentially costly oversight.
6. Digitization of the Entire Supply Chain Process
There is no question that the shift toward digitization is the future of logistics. While some companies have already begun to embrace this fact, the ones that devote the most resources to becoming fully digitized are the brands that will see the most explosive growth and long-term success.
DP World and A.P. Moller-Maersk, both major players in the global logistics sector, are already quite vocal about the clear benefits of incorporating digital technologies into every step of the supply chain.
DP World has already begun to shift into a fully digital operations mode. They recently announced a partnership with TradeLens, a blockchain-based digital container logistics platform, and this level of technological integration is set to pay huge dividends in all aspects of their operations.
To underscore the importance of digitization, Maersk has founded the Digital Container Shipping Association, or DCSA, in order to foster systemic collaboration throughout the logistics industry. Currently, there are about a dozen major brands involved in the DCSA.
7. Navigating Exponential Explosions in E-commerce
Before the COVID-19 crisis hit, e-commerce was already beginning to expand at a rapid pace. However, thanks to quarantines, border closures and slowed trade, e-commerce has exploded beyond anyone’s predictions. Thanks to the pandemic, DHL’s Logistics Trend Radar notes that e-commerce has “become central to the lives of many citizens.”
Currently, the e-commerce that has been driven by major online storefronts such as Google, Amazon, Apple, Facebook and Microsoft is seen as the defining business trend of the past few years.
E-commerce is no longer viewed as an optional luxury for brands that hope to continue doing business in the future, and this is causing a huge overhaul to logistics as a whole.
Over the past decade, online sales in the United States have grown approximately 15 percent annually. While this is great for both retailers and shippers, it does present challenges to the logistics sector. Operators have to balance streamlining business-to-consumer freight flow with minimal impact on the cost of business-to-business delivery process.
8. Learning How to Sustainably Remake Supply Chains
It’s no secret that there is a continuous stream of companies that are now seeking a manufacturing alternative to Chinese factories. In a recent global research paper, Bank of America estimates that it will likely cost about 1 trillion USD to retool global supply chains as this shift away from China becomes a reality.
According to report data, at least 80 percent of a dozen major global sectors are looking for ways to shift as many of their supply chains as possible away from their current locations.
From navigating political trade wars to looking for innovative new ways to cut manufacturing costs at home, businesses are actively seeking out ways to bring more of their business practices back to their home countries. This shift is also due in part to the importance of brand image. Consumers have become more concerned with the environmental impact of their purchases, and they are also more involved in human rights activism. Both of these factors can have a significant impact on a company’s decision to attempt to create a more sustainable supply chain.
9. Incorporating Robotics Into Daily Operations
The rise of robotics and automation was slowly taking shape before the COVID-19 pandemic, but it has become accelerated to the extreme as shipping companies scramble to implement protocols to keep their workers safe while attempting to keep business flowing as usual.
The sudden need to limit human-to-human contact has led to a huge uptick in the presence of automated machinery in the workplace. While the move to more complete automation is inevitable, companies should remember that it must be done as strategically as possible in order to maximize the cost and efficiency benefits that should come with this shift.
GMI Research’s most recent estimate shows that the global robotics market is set to grow at a compound annual growth rate of nearly 31 percent over the next few years.
Integrating robots that are capable of rapid machine learning and blindingly fast adaptation to changing environments is a trend that the entire logistics sector should begin fully embracing now.
Looking Forward to the Future
For better or worse, the COVID-19 pandemic has forced the global logistics industry to adapt and adopt many cutting-edge technologies as quickly and efficiently as possible. Global logistics operators should take note of these trends and begin devoting serious resources toward figuring out the best ways to incorporate these technologies into their own supply chains.