codal insights

The Big Three Logistics Industry Trends For 2018

Sean
January 18th, 2018
4 MINUTE READ

Between the newly released shortlist of potential cities for Amazon’s HQ2, the NRF’s annual summit in New York this week, and the record-shattering holiday sales numbers just behind us, 2018 is shaping up to be a banner year for the logistics sector.

As the rapidly shifting industry continues its digital transformation, web development company Codal has been researching emerging trends, positioning ourselves to craft the next IT solution or digital product that could usher logistics companies into a new era of efficiency.

By sharing our findings in this article, we hope to not only provide insight to logistics companies that are making the necessary adaptations to survive in today’s modernized market, but also prepare for the upcoming shifts in the future. Whether its freight companies or courier services, airlines or trucking businesses, these are the trends that will be reshaping the market space.

1) Increased Transparency

The engine behind the evolution of any industry, not just the digital transformation of logistics, is consumer expectations. As customers interact with other, already digitized sectors, they expect the same quality, flexibility, and above all, transparency from the logistics industry.

In a report from the World Economic Forum, researchers called this recent shift in consumer attitudes “liquid expectations”. Just as consumers can clearly track the progress of their Lyft driver at an extremely granular level, they expect this same functionality from their deliveries.

Amazon, as always, has been leading the charge in transparency, but some legacy carriers are starting to slip when it comes to traceability and tracking information, and consumers are taking notice—just look at this viral tweet from one disgruntled consumer.

The Big Three Logistics Industry Trends For 2018

Regional and even local last-mile carriers may not currently have the technology to provide this tracking data that consumers are demanding. In 2018, they’ll have to find a solution to avoid going the same way as USPS.

2) Crowdsourcing

We’ve already seen how much venture capital is being invested into the gig economy, especially in urban logistics sectors. In 2015, VC investments in supply chain and logistics start-ups was more than four times higher than in 2014.

These investors believe the future of logistics will be using information and technology to alleviate inefficiencies that were previously inherent to the industry. How can courier services optimize and maximize their services? How can they cut operations costs?

The Big Three Logistics Industry Trends For 2018

While it may not make sense for some established logistics companies to tap into crowdsourcing and the newly formed gig economy, (Amazon Flex, of course, being an exception), these companies will have to compete with those using this business model, especially in cities and other densely populated areas.

Andre Pharand, Accenture’s consulting lead for the postal and parcel industry, aptly summarizes the threat that companies leveraging the gig economy pose to established couriers, freighters, and carriers: “There will be a battle between the guys with the buildings and assets, versus the guys with the apps and information. The winner will be a combination of both”.

3) The Next Stage Of Internet

In the same report from the World Economic Forum, researchers dubbed that we’re currently doing business in “the third age of the Internet”—the successor to the desktop era of the 90s, and the mobile revolution in the mid 2000s. This new age is being heralded by robust digital solutions that will trigger paradigm shifts across all industries, including logistics.

Perhaps the most obvious of these shifts has been the rise of the Internet Of Things, the network of devices and sensors that blur the line between the digital and physical realms. Already 7 billion strong and growing, experts predict the IoT will balloon to nearly 50 billion objects by 2020.

We’ve already seen the Internet of Things leave its mark in the logistics industry—take Amazon’s Dash buttons, for instance—but this is only the beginning of its potential impact. Combined with mobile sensors, IoT can drastically streamline and improve the reliability of the logistics sector.

The Big Three Logistics Industry Trends For 2018

With the right software solutions, the configuration and storage freight could be automatically arranged on trucks and cargo ships to maximize efficiency. Autonomous restocking and inventory management are already being leveraged by some retailers.

The Internet of Things is also being supported by advancements in cloud computing. As the cost of data storage falls and computational power rises, larger and larger data streams can be harnessed and analyzed much more efficiently.

Cheaper data storage and increased computational power mean that big data streams can be collected, stored and analyzed much more efficiently. This grants logistics providers enormous power: the power to conduct fast, or even real-time, analysis of supply chain data and operations.

A Proactive Response

The paradigm shift of the logistics industry isn’t like flipping a switch. It’s not a sudden transformation overnight. It’s more akin to evolution, a gradual change that permeates different niches of the sector, with some companies leveraging it, and others falling behind.

Every logistics company, no matter the size, budget, or niche, can benefit from the digitization of their sector. These trends don’t just herald a larger change, but an incredible opportunity for companies to take advantage of these transient times and position themselves ahead of the competition. If you’re interested in how Codal can help you craft and implement digital solutions that harness this trend, contact us!

Sean McGowan
AUTHOR

Sean

Sean is a technical researcher & writer at Codal, authoring blog posts on topics ranging from UX design to the Internet of Things. Working alongside developers, designers, and marketers, Sean helps support the writing team to ensure Codal produces engaging web content of the highest quality. When not writing about the latest and greatest in digital design, Sean can be found baking, watching movies, or complaining about the shortcomings of his favorite Philadelphia sports teams.

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