Logistics Outlook

As we move towards the end of 2018, Logistics & Materials Handling looks further into the future at the trends and issues set to shape the sector.

Artificial intelligence

The Queensland Government recently announced that it will build a cutting-edge artificial intelligence (AI) hub as part of a plan to upskill more local workers to take jobs in the sector.

Forbes Insights research, Logistics, Supply Chain and Transportation 2023: Change at Breakneck Speed, shows that 65 per cent of senior transportation-focused executives believe logistics, supply chain and transportation are in the midst of a renaissance, with the most visible forces of change being the evolution of artificial intelligence and machine learning.

From refilling inventory to augmentation and automation to self-driving vehicles, there are a variety of practical applications where AI and machine learning can benefit the logistics sector.

Earlier this year, DHL and IBM evaluated the potential of AI in logistics and found that supply chain leaders can take advantage of the key benefits and opportunities now that performance, accessibility as well as costs are more favourable than ever before.

The subsequent report found that AI technologies are maturing at great pace, allowing for additional application for the logistics industry. These can help logistics providers enrich customer experiences through conversational engagement.

“Today’s current technology, business and societal conditions favour a paradigm shift to proactive and predictive logistics operations more than any previous time in history,” Matthias Heutger, Senior Vice President and Global Head of Innovation at DHL says.

3D Printing

Earlier this year, Melbourne-based additive manufacturer Titomic unveiled the world’s largest and fastest 3D printer. This was met with great interest in the great interest in the global logistics sector.

As logistics is primarily an industry about moving goods from one place to another, developments in 3D printing will change the way the industry has to think and function.

According to Transport Intelligence, a research and analysis company, the logistics company of the future will operate as a 4PL ­– a service management company. Their businesses will compromise a mix of software development, delivery services, partner relationship management, contract management and brainpower.

The service parts logistics industry will be transformed by 3D printing, according to Transport Intelligence’s report The Implications of 3D Printing for the Global Logistics Industry.

With 3D printing machines available, operations in remote locations will only need electronic libraries of designs available on a computer and spare parts can be printed immediately. By 2020, up to 80 per cent of finished products will have involved some kind of 3D printing, according to Transport Intelligence.

Sustainable supply chains

The need to remain competitive while increasing sustainability has triggered growth in ‘fair and responsible logistics’, according to the DHL Global Logistics Trend Report. As consumers became increasingly engaged with the source of a product ­– where it is manufactured, sourced and transported ­–  they are more concerned with whether all of these steps are carried out in a fair and responsible manner.

In Australia, many businesses are beginning to place sustainability at the core of their business and logistics departments will play a key role in this transition to a more fair and responsible operation.

According to DHL, there are a number of key opportunities in this area. The concept of circular logistics focuses on the development of new logistics services and infrastructure solutions that enable a circular economy. One example could be delivery trucks picking up recycling goods on their route and dropping these off at warehouses.

Innovations in this area could lead to sustainable revenue streams for future growth as well as social and environmental value, DHL claims.

Talent and recruitment

The recent World Bank Logistics Competencies, Skills and Training: A Global Overview report stressed a short supply in qualified labour across global supply chains. The report highlighted that shortages will range from all occupational levels, from truck drivers to filling senior supply chain management positions.

Hiring intentions in the transport and logistics sector will be the strongest they have been in seven years, according to the Manpower Group Employment Survey. The survey revealed a 23 per cent increase for the final quarter of 2018, nearly double that seen during the same period last year.

The World Bank report states that to curb the shortage there needs to be a substantial increase in the amount of resources devoted to logistics training at all levels.

As growth in the logistics industry that does not show any signs of slowing down, there is likely to be a focus on training and development. This will be for those already in the industry looking to upskill and take on senior director positions, as well as investments in how to attract and retain new talent in the industry.

Changing customer expectations

 Customers are now expecting shipments to arrive quicker than ever before, with more flexible options and at a lower price. This is putting a significant amount of pressure on logistics models and operations.

Consumers went digital a long time ago, and their expectations are getting higher and higher in terms of delivery options and times. Much of the retail sector is struggling to keep up and logistics operations are now more important than ever.

According to Price Waterhouse Coopers Future of Logistics report, shoppers weren’t traditionally part of a branded retail experience. However, as consumers expect more flexibility, they are more engaged with how and when they get their goods.

Customers are increasingly tracking their order at every step of the process, putting the logistics carrier in the spotlight. Logistics businesses will need to be more customer-focused as their reputations are more on the line than ever before. It’s now more important than ever before for logistics suppliers and distributors to be innovative and on top of every step in the process to meet the demands of the consumer.