Top 3 Logistics Trends in 2022
2022 is a challenging year, industries across the globe continue to face the burden of supply chain disruption. Due to Covid-19, there is a severe breakdown in the manufactured flow of goods and their delivery of these products. To optimize the logistics process, manufacturers, retailers and third-party logistics companies (3PLs) should come together to improve execution, plan transport routes based on the required time/cost, and embrace automation and new technologies. Read on to discover what’s coming in 2022.
Trend 1: Covid-19 leads to unstable courier service.
Due to Covid-19 restrictions and lockdowns, the movement of goods across the world has been negatively impacted. The logistics sector is expected to remain under stress for the foreseeable future. The pandemic has formed massive shipping delays as the global shipping reliability rate dropped from 80% in 2019 to 40% in 2021. This rate is also expected to continue to decrease in 2022 and beyond.
Therefore, retailers and logistics companies should manage inventory and stock levels (SKUs) efficaciously all times. In this scenario, these businesses can transport products immediately when shipment requests come through. Although the courier service might not be stable as it used to be, this method can minimize supply chain disruptions.
Trend 2: The supply chain is more automated than before.
Automated supply chains will increasingly emerge as a key trend in the logistics sector. The global autonomous warehouse market is expected to reach US$27.2 billion by 2025, which is nearly double in size compared to 2021. Below are the four key areas of automated supply chain:
- Autonomous Mobile Robots (AMRs): Autonomous Mobile Robots (AMRs) adopt sensor technology to deliver inventory all over the warehouse. They are capable of interpreting and analyzing the environment through the use of computers, maps, and onboard sensors. AMRs are small and smart with the ability to find, pick and shift inventory around large warehouses – at a much faster pace than humans can and with less risk to safety. There were 485,000 logistics robots sold in total from 2019 to 2021, and it is expected that the sales of robots will continue to increase in the coming years.
- Aerial Drones: Aerial drones help in optimizing warehouse inventory procedures. They can quickly scan the location of a specific product and send an accurate count immediately to the warehouse inventory management software. More importantly, aerial drones can travel anywhere easily and access those hard-to-reach areas.
- Automated Order Management System (OMS): Most logistics companies have developed an automated Order Management System (OMS) to organize and streamline the fulfilment process across the supply chain. Without having humans to give instructions for each operation, retailers can simply place their orders online. Consequently, courier companies receive requests, pick up goods, and transport them automatically instead of processing them manually.
Click the link below to learn more about OMS:
https://www.royaleinternational.com/2021/11/order-management-systems-are-essential/
- Artificial Intelligence for Tracking: Tacking is another fundamental factor in today’s delivery process. By inputting AI navigation technology into the company system, both retailers and logistics companies can track and locate products automatically. They can also view the order routing and estimated arrival time, which provide insights and prescriptive decisions for the next steps in the supply chain process.
By automating operation systems, the supply chain becomes more efficient.
Trend 3: Sustainability continues to be the focus.
In today’s environment, the logistics industry advocates sustainability, aiming to reduce ecological footprints, carbon dioxide emissions, and air & noise pollution. Here are some of the popular green measures for sustainable supply chains:
- Contributing to the Smart City Logistics Program: Numerous logistics companies support the Smart City Logistics Program. Smart City Logistics is a platform that groups different voices on society regarding transportation networks, traffic implementations, population, delivery facilities and land use. Through the sharing of experience and ideas, innovative and strong sustainable supply chain solutions are identified and pushed forward. Some policy implementations include route optimization, order batching, digitalization for customs paperwork and the reduction in packaging.
- Route Optimization: The less mileage delivery drivers consume on the road, the lower amount of pollution is produced. 64% of logistics providers is looking to use bikes and drones for deliveries instead of traditional fossil fuel vehicles. Although bikes may not be the right option for all deliveries, they can be the perfect solution for urban deliveries with small orders.
Next, 46% of logistics companies would choose to roll out electric delivery trucks for transportation use. The Electric Vehicle Trucking Industry is predicted to rise to US$1,893.1 million by 2027, representing an annual compound growth rate of 25.8%. It is likely that sustainable supply chain is here to stay as this growth is driven by government initiatives across the globe.
- Digitalize the Paperwork: Shipments use up a lot of paper, from order details to invoices, customs clearance forms and proof of delivery. Therefore, online applications will be widely adopted in the coming years. It is important for both logistics companies and retailers to use less paper for all delivery procedures. This contributes to sustainable supply chains, and helps to save trees as well as cut down paper costs.
- Batch Packages Together for Higher Drop Density: Through consolidating shipments, the number of delivery vehicles dispatched is reduced and energy efficiency is enhanced.
- Green Packaging: To protect the environment, many logistics companies take initiatives to move towards green packaging methods.
– Reduce: Use eco-friendly, biodegradable packaging to break down the plastics and naturally
decompose them.
– Remove: Eliminate unnecessary packaging layers such as outer cartons and paper decorations.
– Reuse: Reuse packaging for bagged garbage, or simply note papers.
Click the link below to understand more about our green policies:
https://www.royaleinternational.com/about/
To conclude, although the pandemic will continue to massively impact global supply chains in 2022 and beyond, retailers and third-party logistics companies can reduce the impact through adopting an automated and sustainable supply chain.
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