2019 Trends in Logistics: Rise of the Machines and More
Friday, March 22, 2019
Posted by: Kaylin Berg
The rate of change in transportation and shipping has accelerated to meet exploding consumer demand. E-commerce has reshaped the industry in so many ways, from technology and costs to labor and consumer preferences, it can be hard to keep up. And yet, the transformation is nowhere near complete. Get ready for many more changes in logistics and transportation in 2019.
4 Key Logistics Trends in 2019
Transportation and logistics firms are reacting to strong demand, mitigating problems, and planning for an e-commerce-friendly future. To that end, shippers should expect the following trends to advance this year:
1. Escalation of Artificial Intelligence and Machine Learning
No longer just buzzwords, artificial intelligence (AI) and machine learning efforts are starting to make big impacts on the logistics and transportation industries. Leading companies are already harnessing the power of AI and machine learning to inform strategies and fine-tune decision-making related to pricing, inventories, carrier availability, warehouse management, visibility, and more. The emergence of powerful computing capabilities and sophisticated algorithms is making this possible, and we’re likely to see a continuing evolution of the human role alongside machines (Forbes).
2. Surplus Inventory to Exacerbate Storage Shortage
Inventory build-ups ahead of expected tariffs and the extra capacity required for online product returns have squeezed U.S. warehouse vacancy rates to just 4.3 percent, the lowest level on record. In response, companies are leasing flex capacity in “mobile warehouses” or trailers as an alternative. The trend also shows some shippers leasing space from mobile storage companies while others are using their own trailers, parked on their premises, to get through peak periods (SupplyChainBrain).
The cold storage shortage could be a particular problem for shippers in 2019. Capacity is expected to grow only slightly, as little as 1 percent per year, as online grocery shopping and demand for fresh, frozen, and convenient foods continue to skyrocket. Public Refrigerated Warehouses (PRW) will likely fill the void in the short run, while e-tail grocers and other e-commerce shops may look to acquire brick-and-mortar stores for access to their in-store, cold storage capacity (Boss Magazine).
3. Automation to Mitigate Labor Shortages
A strong economy with less than 4 percent unemployment continues to limit hiring in transportation and logistics. In particular, blue-collar workers are growing scarce as older generations retire and younger generations lack interest in more labor-intensive careers. This trend may worsen the truck driver shortage, even as pay, signing bonuses, and benefits increase to unprecedented levels. Some experts say automated solutions are already helping, but driverless trucks are still unproven and probably won’t be practical for another ten years (JOC.com).
Warehouses struggle to adequately staff fulfillment jobs for the same reasons, alongside e-commerce challenges such as multi-channel fulfillment, 2-day shipping, and scalability during seasonal surges. To improve accuracy, shorten lead times, and generally pick up the slack, warehouses are employing automated technologies. Examples include autonomous robots, people-assisting “cobots” (collaborative robots), and shuttle systems that automatically retrieve and store items. As a bonus, these technologies take on the manual aspects of the job, such as picking and packing, and leave the more satisfying management to humans, which could attract more millennial workers (Manufacturing.net).
4. Adapting to Meet Growing Demand for Same-Day Delivery
Consumers are increasingly demanding same-day delivery of everything from groceries to office supplies through e-commerce. In response, shippers are accommodating them in creative ways, including using drones, crowd-sourced deliveries, and highly coordinated last-mile driver networks. Warehouses are also optimizing through more shared or multi-vendor solutions and relocating to be closer to their customers (Sabinext).
This post originally appeared on the LoadDelivered blog, here.