Logistics Trends of 2022

January 13, 2022

The logistics and supply chain industry has evolved significantly within the last decade. New technologies and computer-aided business approaches have become essential more than ever. Logistics is the backbone of every economy, and as the world recovers from the pandemic, the need for extraordinary practices is emerging to keep up with the challenges. This article will introduce you to the top 5 logistics trends of 2022.

Robots, autonomous vehicles, and AI technologies

Robotic solutions will be more dominant in the warehousing and delivery sectors. Recently, robots started taking over inventory activities with their automated systems to pick, move, and organize packages. Furthermore, autonomous trucks are expected to begin working in the near future, along with delivery drones. Automated air delivery showed high efficiency in the last couple of years, supporting the healthcare field during the pandemic. Since then, it has been under the spotlight to become a prominent player in the supply chain industry.

According to a recent analysis by Frost and Sullivan, “The automated guided vehicles (AGV) segment is forecast to hit $4.6 billion while the autonomous mobile robot (AMR) segment is expected to reach $6.8 billion.”

Artificial intelligence plays a critical role in this field to control robotic behavior and optimize it by advanced calculations, like finding the best route or predicting potential failures. The AI role extends to support intelligent naval and air navigation systems as well as risk assessment simulators. Logistics companies will be demanding more technology-aided solutions to save costs and avoid sudden trouble.

Digital transformation and cloud-based solutions

The COVID-19 pandemic and the worldwide lockdowns affected business badly, and since then, more companies have been implementing digital collaboration solutions to replace traditional communication methods.

“Amid the COVID-19 crisis, the global market for Digital Transformation Spending in Logistics estimated at US$45.6 Billion in the year 2020, is projected to reach a revised size of US$75.5 Billion by 2026, growing at a CAGR of 8.8% over the analysis period”, according to Report Linker.

Logistics companies rapidly evolve and adapt agile cloud-based platforms to organize their daily interactions. These solutions provide a unified online hub to connect service providers, clients, and 3rd party contractors from different parts of the world. It helps archive their conversations and documents them over the cloud to be accessed anywhere and anytime.

Better relationships with suppliers

Until recently, supplier relationship management (SRM) was not widespread, but more companies started to consider the importance of building a long-term mutual-benefit relationship with suppliers and service providers. Research done by Mckinsey&Company showed that “Companies with advanced supplier-collaboration capabilities tend to outperform their peers.”

SRM helps reduce the consequences of sudden changes and emergencies. Building a good relationship with suppliers heavily affected the logistics industry. Nowadays, many businesses are trying to keep an updated database of trusted logistic service providers to be more flexible in critical situations. The interest in SRM software is predicted to keep growing throughout 2022.

Sustainable solutions and green logistics

The interest in achieving sustainability will keep rising in 2022 since sustainable supply chain logistics have been under the microscope for multiple years so far. More logistics companies are adopting eco-friendly solutions and green technologies to achieve a balance between financial growth and environmental care.

Relying on information technology tools helped shorten the driving time, thus reducing CO2 emissions. Simultaneously, electric delivery trucks and vehicles started taking over the place of the old fossil-fuel-operated ones. Countries also support this endeavor by pushing companies to implement more sustainable solutions. For instance, the plastic packaging tax issued in the EU. “Tax will be calculated on the weight of non-recycled plastic packaging waste at 0.80 euro per kg, with a mechanism to avoid some countries paying much more than others”, explains Reuters.

Last-mile delivery and micro fulfillment

Online shopping has taken over the world, and this has brought many challenges to logistics companies as the need for cheap and fast delivery boosted dramatically. Many retail e-commerce models offer free or discounted shipping, which puts a lot of pressure on logistic service providers. The problem of last-mile delivery is the cost of delivering packages to the end consumer, and it acquires the most significant share of the shipping cost, whether the consumer is in a rural area that would take 2-3 miles of driving or in the city center where traffic jams will cause delays and waste resources.

The global Last-Mile Delivery Market was valued at USD 18.7 Bn in 2020, and it is expected to reach USD 62.7 Bn by 2027, with a CAGR of 18.9%, during the forecast period 2021-2027., from buying groceries to ordering cars, states All The Research.

Solving the last-mile delivery started and is expected to keep growing as we enter 2022 as long as retail e-commerce is in the lead. In the long term, the costs of establishing more warehouses eliminate delivery time and reduce costs and use multiple other methods that we have already talked about, like advanced delivery methods, green technologies, and AI computation. These solutions will be in more demand as the world is shifting towards online stores for everyday shopping, from buying groceries to ordering cars.

Conclusion

In the logistics industry we constantly seek faster and cost-efficient solutions to keep our clients satisfied. Investing in modern trends and new technologies is critical to improve supply chain services towards operational excellence. If you are looking for a trusted logistics partner with hands-on and most recent trends, reach out to us for more details about our services and routes.

Did you know?

The first ever ‘cargo only’ flight was recorded in November 1910 in the USA, using a Wright Model B aeroplane that flew 65 miles carrying a package of silk. The business owner used the pioneering transport more as a PR stunt to celebrate the opening of his store, with the bundle of silk cut into individual pieces and glued onto souvenir postcards.

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