1:32am 14th January 2022
Trends and innovations in logistics industry in 2021
The onset of the global COVID-19 pandemic upended lives and livelihoods, and life as we knew it took a drastic turn. From the business standpoint, companies across the world, regardless of their size and sector, faced large-scale disruptions. However, the logistics and supply chain industry were at the forefront of this disruption. The crisis also underscored the significance of streamlined, efficient logistics operations.
Nearly two years later, as the world gradually recovers from the pandemic’s impact, the logistics industry has undergone a major transformation. Having adapted efficiently to the volatile global scenario, the sector continues to evolve and grow with multiple trends emerging this year. On that note, here are the top 10 logistics trends and innovations in 2021.
Accelerated growth of technologies
While some players in the logistics industry have technology at the heart of their strategy, the industry has largely been operating on manual processes up until a few years ago. Recent years, however, have seen increased technological adoption, and the onset of the pandemic has further accelerated this. While 2020 saw businesses racing to realign their strategies and alter their model of working, 2021 has witnessed several technological innovations being implemented for the smooth functioning of logistics. Today, nearly every process in the logistics sector – from order taking, inventory, and warehouse management, to packaging, shipping, and last-mile delivery, is automated. This trend is likely to prevail for the foreseeable future as technology continues to gain a stronghold in the world.
Augmented warehouse management
While warehousing often doesn’t get its due credit outside the logistics industry, it is one of the pillars holding up the sector. Robust warehousing is one of the keys to an efficient logistics ecosystem. Logistics players have begun to automate almost every aspect to ensure the human resources are dedicated to the more important, complex tasks to ensure seamless warehouse management. Although the pre-pandemic times witnessed tech integration in warehousing too, 2021 has proven to be the year of advancements. Logistics platforms have introduced robotic order picking and even packaging to save time and cost, and today warehouse management services have been augmented for smooth end-to-end shipping services.
The shift in shopping habits
2020 ensured we were all confined to our homes, working and shopping remotely. This resulted in a large-scale shift in consumer behavior, preferences, and expectations when it came to shopping and shipment delivery. With the growing internet penetration and smartphone usage an increasingly shift to online shopping was witnessed within the consumers. According to an expert from RedSeer Consulting, India’s e-commerce sector is expected to clock USD 55 billion in sales by the end of 2021. This shift in online shopping that has led to a surge in need for efficient logistics has platforms constantly enhancing their offerings for ultimate customer satisfaction.
Personalized customer experience
As consumer preferences evolve every day, they are expecting a more personalized e-commerce and logistics experience, one that pampers them and offers the utmost convenience from end to end. Logistics platforms are deploying technologies such as AI, IoT, and Big Data to garner insights into consumer preferences and customize their experience to cater to this growing demand.
Apart from teaching us to prioritize our health and safety, the pandemic also underscored the importance of being eco-friendly. Logistics platforms have jumped on the sustainability bandwagon and are mindful of their operations’ impact on the planet. Sustainable logistics systems aim to increase profitability and reduce environmental impact for long-term success. The logistics industry is one of the largest and uses a significant amount of packaging. To ensure sustainable practices, platforms have switched to eco-friendly, sustainable packaging material and are even opening warehouses closer to the customer’s location.
The rise of the D2C market
With over 800 D2C brands in the country at present, the sector is projected to touch $100 billion by 2025. 2021 witnessed several brands and sellers adopting the D2C business model owing to its vast consumer reach and improved engagement. As the D2C market gains further traction, more and more D2C brands are seeking out platforms that offer end-to-end logistics and fulfillment services, and this trend is likely to continue in the coming months/years.
Focused last-mile deliveries to improve customer experience
As the logistics industry realigned its strategies and altered its operations, seamless, efficient last-mile deliveries have proven to be one of the cruxes of customer satisfaction. With customer-centricity at the core of their operational strategy, logistics platforms are bolstering their efforts to provide customers with hassle-free last-mile deliveries by providing them real time updates and better sync up with their delivery partners. In the coming time it is becoming increasingly important to provide last mile delivery to meet customer expectations.
Flexible, on-demand warehousing and fulfillment
With 2020 causing global supply chain disruptions and leading businesses to scramble to rethink their model of working, the need for smooth logistics operations skyrocketed. As the industry itself evolved to meet changing demands of customers and regain footing post the pandemic’s impact, on-demand warehousing and fulfillment have become one of the most sought-after, best solutions for convenient storage and shipping for brand s and sellers. On-demand services reduce the costs of shipping and streamline the fulfillment process, ensuring that sellers can reach customers within 1-2 days.
The days when brands opted for a single channel and reached out to customers through that are long gone. Today, with the support of technology and the growing smartphone usage, and consumers being more tech savvy, omnichannel services have become the go-to option for brands to expand their customer reach and engagement. Brands are leveraging channels such as social media platforms, websites, whatsapp, etc., to connect with customers and drive sales. Through omni channel approach brands get an opportunity to reach out to new customers and gain their loyalty which leads to increase in sales and better operational efficiency.
The pandemic has created widespread apprehensions surrounding physical contact with other individuals, and consumers are now increasingly preferring contactless services for nearly every purchase they make. To that end, the logistics industry is offering contactless deliveries that can be verified by the customer via an OTP sent to their phones. Such contactless services have gained immense traction to the extent that they are likely to become a set standard in the industry.
Today with the growing demand for online deliveries and availability of goods by people has led the industry to grow at a CAGR of 10.5% by 2025. If we compare the logistics industry that existed just a few years ago to the one that exists currently, we can find a world of difference; such is the transformation the sector has undergone. We are on the verge of a very exciting, rapidly moving and transformational future, as technological advancement continues the logistics industry will progress and grow further.
By Saahil Goel
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