Navigating the Logistics Industry’s Shifting Landscape

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Big Data, Autonomous cargo ships and Instant Pickup making waves in the logistics industry

There is a major transition happening in business, finance and marketing operations across the globe. Whole industries are changing all around the world due to technology and logistics (a market currently estimated to be worth around $3.5 trillion) is no different. Companies in the marketing industry are utilizing AI in attribution marketing, while the entertainment industry has truly taken grasp of virtual reality.

Logistics startups are entering the scene and the logistics industry’s rapid change appears geared towards a fully digital supply chain, optimized for e-commerce and last-minute delivery. It is becoming enhanced by technology and companies like Verizon (which has been purchasing fleet-management leaders throughout 2016) are intent on grabbing a piece of the action as the market continues to expand. The massive logistics center developed by Goodman Group will also soon be more than half full.

In 2017 President Donald Trump signed an executive order to bring the approval process for building infrastructure such as roads under “one federal decision”.

At a press conference at Trump Tower in New York, he called the over-regulated permitting process a massive self-inflicted wound.

Previously, a bridge or a few miles of highway would have been subject to as many as 65 permits and requirements, causing critical projects to become delayed. The new executive order is set to provide much needed infrastructure for logistics providers to carry out their activities.

In the first half of 2017, the logistics industry experienced a burst of growth with commodities like vehicles and parts as well as vessels and pipelines seeing tremendous growth in 2016 and 2017.

US exports in the first half of 2017 totaled $763.6 billion and represented a 7.3 percent increase over the total for the first half of 2016 according to US Census data. For the first five months of 2017, Canada, China, and Mexico (each representing approximately 15 percent of US trade) were the three leading trade partners of the US, followed by Germany and Japan at about 5 percent each.

The numbers show that the logistics industry is in the midst of a huge transformation and things seem to be getting more intense.

Senthil Kumar Subbiah, a research Analyst, Supply Chain & Logistics Transformation Practice from Frost & Sullivan says “In addition to riding the digital wave, logistics companies in India are strategizing for the transition from indirect taxation to goods and service tax (GST). The simplified tax structure will benefit the warehousing industry and reduce logistics costs by up to 2.5 per cent,”

India has also seen a rise in logistic companies like homegrown SmartShift. Emboldened by the development of logistics-related infrastructure like logistics parks and freight corridors, many of the nation’s biggest logistics providers are also boosting their offerings to customers with increased connectivity and faster delivery options.

Growing demand continues to drive logistics companies to stay ahead of the game by providing online freight services, digitizing solutions and leveraging technologies like Big Data to increase the efficiency of shipment tracking and order fulfillment.

Advanced technologies to emerge in the field include global positioning systems (GPS) for real-time tracking, radio frequency identification (RFID) in place of bar codes and automated storage and retrieval systems (ASRS) in transportation and warehousing.

Equipped with cameras, radar, sensors and the ability to navigate through the seas on its own, the world’s first semi-autonomous cargo ship may appear in 2018 and become fully autonomous by 2020, possibly lessening costs with a decrease in human operators needed on a ship and disrupting the $15.5 trillion logistics business.

Amazon, a company that has proven its resolve in entering the logistics scene now offers variations of daily necessities (such as electronic, drinks and snacks) for pickup in two minutes or less at five of the company’s fully staffed pickup locations.

Amazon currently operates a 22 staffed pickup locations around or on college campuses across the country and Instant Pickup is poised to become available at more locations in the coming months.

“As shopping behaviors continue to evolve, customers consistently tell us that they want items even faster,” Ripley MacDonald, Director, Student Programs, Amazon said. “Whether it’s a snack on-the-go, replacing a lost phone charger in the middle of a hectic day or adding Alexa to your life with an Echo, Instant Pickup saves Prime members time. While Instant Pickup is available at select pickup locations today, we’re excited about bringing this experience to more customers soon.”

Instant Pickup is just another addition to the many challenges that traditional brick and mortar retailers will have to tackle head on. It is an offering that will keep the Amazon’s competitors on edge as they find ways to out maneuver the e-commerce giant in 2017 and beyond.

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