The Future of the Logistics Industry: 4 trends to watch

“The Era of Logistics is here. We are seeing businesses transform logistics from a quiet, back-end operation into a strategic asset and value driver. At the same time, more technology visionaries than ever before are beginning to understand the vast, ripening opportunities in the logistics industry to develop and apply their innovative solutions around the world,” said Katja Busch, Head of DHL Customer Solutions and Innovation.

1. Big data to mitigate supply chain risks

Global supply chains often rely on a complex network of different moving parts all working together smoothly. Yet disruptions may come in the form of shortages of raw materials, insolvencies within the supplier network, or shipments stuck at customs. Not to mention worldwide events such as conflicts, inflation, and pandemics.

With logistics professionals dealing with more challenges than ever to ship goods, startups selling supply chain tech that can mitigate some of the risks are gaining major investment.

One example is Everstream, a supply chain risk analytics company, which taps into predictive analytics and “boots on the ground” in every port in the world to spot disruptions before they become clients’ problems.

“Everstream is equipped with a broad view of risk from the component level to materials, through the shelf to the consumer,” explains the platform’s CEO, Julie Gerdeman. “We combine AI predictions and intelligence-based modeling with expert human analysis and real-world, in-the-moment insights from a global network of partners, which allows us to provide visibility to deliver a complete view of all the variables impacting a company’s supply chain, from back-ups at the ports or labor unrest to weather disruptions – up to 15 days in advance.”

This technology means, for example, a client in Germany can anticipate a materials shortage in China in record time, and put alternative measures in place. Getting ahead of such disruptions leads to increased services, reduced freight costs, and more on-time deliveries.

As we move into 2024, expect supply chain agility to be something that more and more businesses invest in.

2. Internet of Things for greater supply chain visibility

The Internet of Things refers to a network of physical objects connected to and exchanging data over the Internet. Everyday examples include Smart TVs, self-driving cars, and fitness trackers.

Within supply chains, the IoT is fast becoming one of the most important tools, creating an ecosystem that harnesses traditionally unconnected assets and objects for better visibility. These connected devices share data to shine a light on every milestone in the supply chain, for more resilience and transparency.

“IoT is now in the middle of our trend radar as one of the most impactful and important trends for every organization to understand and leverage in their supply chain,” said Christopher Fuss, Global Head of DHL SmartSolutions IoT at DHL.

Smart Labels are an IoT-enabled technology that will transform the logistics sector in the next couple of years. They are upgraded with intelligent inlay technology that can digitally capture and communicate more information than is printed on a physical label.

They may transfer data using quick response (QR) codes or radio frequency identification (RFID) technology, and can be responsive to movement, temperature, touch, and environment, capturing data of their surrounding environment using Internet of Things pixels. All of this means complete visibility over the supply chain: faster identification of bottlenecks, improved traceability and inventory management, and protection from counterfeiting. Expect their applications to grow even further as more is invested in technology over the next few years.

3. AI in logistics

AI in logistics is an exciting prospect – its potential to transform the industry seemingly knows no bounds. The statistics speak for themselves: research by Accenture found that 36 percent of large, mid-size, and small businesses have successfully implemented AI for supply chain and logistics processes, whilst 28 percent were on the verge of doing so. As a result, it is estimated that AI will boost logistics productivity by more than 20 percent by 2035.

“AI is having a transformative effect [throughout] the supply chain – on predictive forecasting, parcel sorting, customer service, the overall ability of a business to adapt to challenges… Many of our small business clients are within the e-commerce space, which is highly competitive. Every minute saved packing an order, or every inch of space saved within the warehouse, can quickly add up to big cost savings for them," said Oliver Facey, SVP of Global Network Operations Programs at DHL Express.

AI’s far-reaching scope makes it hard to pinpoint just one or two delivery and logistics trends it will influence in 2024, but here is a snapshot:

Computer Vision: this applies artificial intelligence (AI) algorithms to analyze digital photos and videos. Applications include maintaining safety procedures – during the pandemic, for example, the tech ensured workers adhered to social distancing regulations; and inventory management – counting items and sending alerts when it is time to restock.

Smarter inventory management: not only can AI algorithms help retailers better predict demand – thus avoiding over- or under-stocking products – voice-activated systems will allow them to track stock levels without having to manually scour a spreadsheet.

4. Logistics sustainability

Sustainability has been a growing priority for almost every industry in recent years. Research from KPMG found that more than two-thirds (69 percent) of CEOs globally have fully embedded environmental, social, and governance (ESG) considerations into their business. Despite this, a similar amount (68 percent) admitted their current progress on ESG is not strong enough to withstand potential scrutiny from stakeholders and shareholders.

Sustainability in logistics covers many areas, but with the spotlight so often shone on transport, it is no surprise that this is a particular focus for many businesses. With e-commerce, consumers are taking notice, too, with 51 percent saying that understanding the carbon footprint of their delivery will be “very important” in the next five years.

In light of this, some sustainable last-mile solutions your business may wish to consider adopting in 2024 are:

Alternative fuels: DHL Express has recently launched GoGreen Plus, a dedicated solution to help businesses reduce the carbon emissions associated with their shipments through the use of Sustainable Aviation Fuel. This biofuel is produced from renewable sources such as vegetable oils, animal fats, waste products, and agricultural crops. SAF is specifically designed to be used as a substitute for traditional jet fuel and can reduce greenhouse gas emissions by up to 80 percent compared to fossil fuels.

Electric vehicles: the EV market has grown exponentially over the last couple of years, with sales exceeding 10 million in 2022. Within the e-commerce sector, 15-20 percent of last-mile cargo fleets have been electrified globally. The technology can help businesses drastically reduce their carbon emissions, save on fuel costs, and win over eco-conscious customers.

Latest trends in logistics: key takeaways

As customer demands and supply chain pressures continue to grow, think about which of the latest innovations in technology, data, and AI could transform your business. Logistics insights spanning procurement, inventory management, last-mile delivery, and even packaging will help you understand where to invest your resources to remain competitive, resilient, and agile in a competitive market. It is an exciting time for logistics – leverage the opportunity to grow your business!

This article was originally published on Discover, the small business and global logistics advice guide from DHL.