Trends to watch out for in 2021 for the logistics fraternity

“Change is the only constant thing“ – and the year 2020 proved that the COVID-19 pandemic was a catalyst. The logistics industry has been experiencing change coming in the form of continuous innovation, which is occurring faster than we have ever seen. Technology-driven change has accelerated the innovation’s integration in logistics business processes, forcing companies to rethink their management approaches and customer experience. The future of the logistics industry is already here, pushed by the pandemic and post-pandemic challenges.

AI all the way

Artificial Intelligence (AI) in logistics has come a long way. Who really could have imagined driverless cars, pilotless aircraft or predictive capabilities other than from the pages of science fiction? But thanks to a whirlwind evolution of tech, AI has left the laboratory and evolved into an integral and ubiquitous part of logistics. While trucking, rail and ocean freight have been tracked by satellite via telematics for decades, and versions of electronic driver logs have been around for nearly 20 years, the data has not been properly utilized until now. Previous tracking efforts did not provide “clean” data and had been regularly stored on paper, making proper analysis more difficult. The difference today, however, is the presence of more data and vastly more powerful computing and algorithms to sort, evaluate and result in action.

For instance, machine learning-based tools can predict air/ocean freight transit time delays in order to enable proactive mitigation. By analysing different parameters of internal data, the machine learning models are able to predict if the average daily transit time for a given lane/route is expected to rise or fall up to a week in advance. Better algorithms and data crunching enables AI to identify inefficiencies and move cargo around the world faster than ever.

Blockchain beyond limits

It was only a matter of time before blockchain hit the logistics mainstream. The technology’s ability to record transactions between parties permanently and securely has a multitude of uses in the logistics industry. However, the logistics players are just at the beginning of their path to finding the clear benefits of blockchain. Some of the world’s largest companies, including Maersk, Microsoft, Alibaba, and Amazon, now invest heavily in the technology. That’s a lot of money getting in on the blockchain action, and why would it be different? The World Economic Forum estimates the integration of blockchain will reduce the supply chain barriers to global trade. This aspect provides businesses with the potential 15% increase in sales and a 5% increase in the GDP.

The world’s largest retailer is also incorporating technologies based on the blockchain. Lynx, a subsidiary of Chinese e-commerce giant Alibaba, announced the successful integration of blockchain for its cross-border logistics operations. Their system is capable of keeping track of all the relevant data about an imported shipment, such as the details about the production, transport method, customs, inspection, and even third-party verification.

Shipping is the best example of where blockchain possibilities are being realized on the scale of the largest logistics companies. The adoption of blockchain-based digital lading bills will enable accurate documentation and fast transfer of original documents. This will make supply chains more efficient and reduce unnecessary transaction costs. According to industry estimates, more than 10% of freight transportation invoices contain inaccurate data.

Mechanical automation

Automation in coordination is not restricted to simplifying the activities. Inside, Autonomous Mobile Robots (AMRs) can see more extensive acknowledgement for performing complex errands. Notwithstanding how we scatter the frequently utilized dread: robots won’t supplant people. Robots would liberate human resources from modest work in most inventory chains, permitting them to zero in on significant dynamics.

Cargo community systems

If there is one thing the logistics industry needs to gain from the progressing pandemic, it is nimbleness. The logistics network must be sufficiently adaptable to assimilate any major or minor stuns that tag along its way. Cargo community systems are an answer to this challenge. They are on the rise. Port community system and airport cargo community system are gaining great ground across the world. Connecting all the supply chain actors on a unified platform and synchronizing their operations is the sole objective of these community platforms. Currently, in their 3^rd generation, these have smart apps, and APIs with business intelligence built into them to empower in the smallest player in the value chain.

Logistics e-Marketplace

Among the variety of digital platforms active in the present-day logistics industry, freight and logistics e-Marketplaces have the greatest disruptive potential to transform how the industry functions and resolve most of its pertinent issues. An online freight marketplace is a platform where shippers can connect with a vast variety of carriers and even freight forwarders. The logical benefits of such a marketplace include an increase in transparency of logistics industry processes, fair pricing, quicker assignment and dispatch of goods, and the creation of trust among the members of the industry. As a consequence of a combination of these factors, the empty miles problem would also be solved to a large extent. End-to-end integrity across functions like track and trace, reviews and ratings, invoice audits, etc., make these platforms the most sought-after.

Much like the agricultural revolution, the digital revolution is impacting many different aspects of modern life, and logistics is one of the industries primed for disruption. It is beginning its journey to becoming a Tech-driven industry – but the future remains rife with challenges to overcome and opportunities to realize.

Breaking the odds, the industry survives and is continuously evolving as it always did. With these trends, the industry will soon rise to the new normal and turn into the age of digitization. More innovative concepts, such as cargo community system, cargo tracking applications and others, will seamlessly emerge. Therefore, 2021 is the beginning of a new era rather than a new year.

About the author

Vineet Malhotra-Director, Kale Logistics Solutions

With over 25 years of experience across verticals like manufacturing, energy and textiles. Vineet is an accomplished strategist and a techno-functional leader, having extensive experience in various business functions across diverse industries. Vineet spearheads Kale’s new industry initiatives across its areas of focus, including airports, forwarding, transportation, customs, Chambers of Commerce and other Trade Associations. He has been the driving force behind many of Kale’s next-Generation community platform solutions, setting new industry benchmarks.