12 Trends that are Shaping the Future of Logistics
World exports as a percentage of global GDP showed a continuous growth trend from the mid-eighties of the last century, until 2008. Since then the growth stopped.
Another indicator for trade, global capital flows between countries, achieved its highest point seven years ago. But times are changing. Growth will still be there, if you know where to find it.
According to McKinsey, approximately 600 cities are likely to realise 65% of the global GDP growth by the mid-twenties. By then, the growing cities are predicted to add up to $30 trillion to the world economy. Incomes in developing economies never rose faster or at a greater scale in history, and about a billion people are becoming part of consuming classes in roughly ten years’ time.
Macro-economic changes and shifts in trade patterns have their impact on global supply chains. They provide opportunities as well as challenges. Let’s have a closer look at some developments in logistics that are directly or indirectly caused by changes in trade patterns, in GDP growth or in customer behaviour.
- Growth patterns: Growth in the logistics industry is no longer driven by exports from Asia to North America and from Asia to Europe. It will come from elsewhere, and will be more fragmented, more unpredictable and more volatile. Economic and population growth will be increasingly centred in cities. Infrastructure is becoming a major determinant for growth.
- Flexibility: Meeting consumer’s requirements at multiple locations with multiple transport modes at different times requires a flexible supply chain that can adapt easily to unexpected changes and circumstances.
- Globalisation: International, mature and emerging markets have become a part of the overall business growth strategy for many companies. Going ‘international’ has become the standard and logistic solution providers need to enable that trend.
- Near shoring: As labour costs in Asia and transportation costs rise, increasing amounts of manufacturing are being brought closer to the end user.
- Multi-channel sourcing: End-consumers increasingly source via multiple channels, ranging from brick & mortar shops to e-commerce. The logistics industry needs to support multi-channel strategies of their customers.
- Information technology: The growing complexity and dynamism of supply chains requires increasingly advanced Information Technology solutions.
- Continuity: To be able to secure speed to market and to reduce risk of delays, alternative transport modes and routes are required to support the continuing trend of outsourcing of logistics services.
- Sustainability: Customers increasingly prefer products that are made and sourced in ‘the right way’; minimising business’ social, economic and environmental impact on society and enhancing positive effects.
- Compliance: Anti-bribery and corruption legislation is having an increasing impact on supply chains, since multinational companies demand that no facilitation payments are made during the export of their goods, yet still seek to source from low cost countries, which are often also at the bottom of Transparency International’s global corruption index.
- Partnerships: Manufacturers continuously search for supply chain innovations and gains through partnerships with logistic service providers.
- End-to-end visibility: Complete visibility of the entire supply chain aspires to achieve true demand-driven planning, allowing efficient response to changes in sourcing, supply, capacity and demand.
- Complexity: Supply chains are becoming increasingly complex and dynamic with sourcing locations being changed increasingly quickly and purchase orders becoming smaller and more frequent.
These developments will have their effect on day-to-day logistics, and companies will need to prepare for ‘the new normal’ in supply chain management. With all these changes, staying up-to-date on the latest trends in logistics is more important than ever.
If you are working in the retail industry and want to stay up-to-date on the latest trends in Retail Logistics, you might want to have a look at the recently launched Damco-powered http://www.retaillogistics.guru. It covers the latest on all that’s happening in the world of supply chain management in the retail industry.
DHL Claim Multi-Sector Collaboration Key to Fighting COVID
Since January, global logistics leader DHL has distributed more than 200 million doses of the COVID vaccine to 120+ countries around the globe. While the US and UK recently rolled out immunisation plans to most citizens, countries with less developed infrastructure still desperately need more doses. In the United Arab Emirates (UAE), which currently has one of the highest per-capita immunisation rates, the government set up storage facilities to cover domestic and international demand. But storage, as we’ve learned, is little help if you can’t transport the goods.
This is where logistics leaders such as DHL make their impact. The company built over 50 new partnerships, bilateral and multilateral, to collaborate with pharmaceutical and private sector firms. With more than 350 DHL centres pressed into service, the group operated 9,000+ flights to ship the vaccine where it needed to go.
With new pandemic knowledge, DHL just released its “Revisiting Pandemic Resilience” white paper, which examined the role of logistics and supply chain companies in handling COVID-19. As Thomas Ellman, Head of Clinical Trials Logistics at DHL, said: “The past one year has highlighted the importance of logistics and supply chain management to manage the pandemic, ensure business continuity and protect public health. It has also shown us that together we are stronger”.
Multisector partnerships, DHL said, enabled rapid, effective vaccine distribution. While international scientists developed a vaccine in record time—five times faster than any other vaccine in history—manufacturers ramped up production and logistics teams rolled out distribution three times faster than expected. When commercial routes faced backups, logistics operators worked with military officers to transport vaccines via helicopters and boats.
In the UAE, the public-private HOPE Consortium distributed billions of COVID-19 doses to its civilians as well as other countries in need by partnering with commercial organisations such as DHL. For the first time, apropo for an unprecedented pandemic, logistics companies made strong connections with public health and government.
“While the race against the virus continues, leveraging the power of such collaborations and data analytics will be key”, said Katja Busch, Chief Commercial Officer DHL and Head of DHL Customer Solutions & Innovation. “We need to remain prepared for high patient and vaccine volumes, maintain logistics infrastructure and capacity, while planning for seasonal fluctuations by providing a stable and well-equipped platform for the years to come”.
How Do We Sustain Immunisation?
By the end of 2021, experts estimate that we need approximately 10 billion doses of vaccines—many of which will be shipped to areas of the world, such as India, South Africa, and Brazil, that lack significant infrastructure. This is perhaps the greatest divide between countries that have rolled out successful immunisation programmes and those that have not. As Busch noted, “the UAE’s significant investments in creating robust air, sea, and land infrastructure facilitated logistics and vaccine distribution, helping us keep supply chains resilient”.
Neither is the novel coronavirus a one-time affair. If predictions hold, COVID will be similar to seasonal colds or the flu: here to stay. When fall comes around each year, governments will need to vaccinate the world as quickly as possible to ensure long-term immunisation against the virus. This time, logistics companies must be better prepared.
Yet global immunisation, year after year, is no small order. To keep reinfection rates low and slow the spread of COVID, governments will likely need 7-9 billion annual doses of the vaccine to meet that mark. And if DHL’s white paper is any judge of success, multi-sector supply chain partnerships will set the gold standard.