Top 10 Logistics Trends for 2016
2015 was an important year for logistics and fulfilment, with online retailers kept particularly busy on Black Friday and in the run-up to Christmas. James Hyde, founder of sustainable fulfilment house James and James, outlines the top 10 trends to look out for in 2016
1. Real time technology will rule
It’s accurate to the minute and you’ll always know exactly what’s in stock and where. Real time stock tracking eliminates any doubt as to your current stock levels, so customers and staff alike can be confident about what’s available in your store. It’s a no-brainer to help drive efficiency, so we predict a big rise in the use of web-based technology and live data in 2016.
2. Returns will become easier
How you deal with returns is a reflection of your entire business and one that customers will remember. It’s a mark of great customer service, and the great news is that it’s about to become easier to handle in 2016. Improvements to returns handling technology and RMA (Return Merchandise Authorisation) will make it easier to track a return, with more data available and visible to the customer.
3. Better tracking for shipments
Online shopping has come a long way since its infancy, but shipment tracking is one area where there’s still room for improvement. Advances in warehouse technology, combined with customer-friendly communication by email and text, mean that it’s now possible to keep your shoppers informed about exactly where their order is, and when it will be with them. That’s what the best companies are already doing, resulting in increased customer satisfaction and loyalty - so we expect more online sellers to join them in offering better tracking options in 2016.
4. Intelligent reporting for better inventory control
Keeping on top of your stock levels is vital, but if your data isn’t easy to read and analyse, it can be time consuming. In 2016 we predict a rise in intelligent reporting – intuitive, graphical data with automated alerts to let you know when stock is low or nearing its expiry date.
5. Supply chain tracking will be important
Live inventory updates and tracking of movements in the supply chain help companies to ensure that they have the stock they need on their shelves at all times. It’s a technology that will become increasingly important in 2016, particularly for B2C eCommerce companies.
6. Low value grocery orders will become more common
With the introduction of services like Amazon Pantry, this year customers will increasingly look online to shop for basics, without necessarily buying in bulk.
7. The world will get smaller
Today’s global society is a world in which anything is possible. And in the world of logistics, it’s one where we need to deliver. Customers ordering from overseas are no longer willing to wait for weeks for their goods. In 2016, it will become more important to offer a quick turnaround to other countries.
8. The cloud will be commonplace
Cloud based fulfilment services will be the industry standard, side-lining traditional fulfilment technologies that can no longer compete.
9. Planning ahead will be important
Don’t get caught unprepared in 2016! Your busiest periods are probably predictable. Stay ahead of the game and stock up to ensure that you can meet demand throughout the year.
10. The customer will still be king
The best logistics operations are those that can provide a seamless connection between the click of a customer’s mouse and the package through their letterbox. In 2016 the most successful companies will be those that succeed in this endeavour.
Top 10 air freight carriers
10. Cargolux Group
The Luxembourgish freight carrier Cargolux Group (comprised of Cargolux Airlines and Cargolux Italia, established in 2008) remained in the number 10 spot, with a total reported FTK (Freight Tonne Kilometer) equaling 7.45 bn, which represents a 7.7% expansion year-over-year. The carrier group currently operates a fleet of 30 aircraft (26 through Cargolux Airlines and an addition four through Cargolux Italia), primarily variants of the Boeing 747.
9. Korean Air
Headquartered in Seoul, Korean Air provides cargo and passenger services to over 100 destinations in 44 countries. The carrier fell from eighth place in the previous year’s rankings, with a total FTK of 7.66 bn, representing a 7.1% decrease year-over-year. Korean Air reported a net revenue of $10.7bn in 2017, also reporting a return to profitability for the first time in five years, according to Forbes.
8. Air France-KLM
The Air France-KLM freight carrier group was founded in 1947. The group is comprised of Air France, KLM, and Martinair, and is based in Paris, France. Falling from seventh place in the Freight 50 rankings, the carrier reported a total FTK of 8.13 bn, which represents a 9.2% decrease in traffic year-over-year. The group reported a net revenue of $29.08bn at the end of 2017 and is ranked #28 on Forbes Magazine’s list of Best Employers.
7. Qatar Airways
Qatar Airways, the nationally owned airline of the Kingdom of Qatar is based in Doha, and ascended two places in the Freight 50 rankings, with a total FTK of 9.22 bn, representing a 19.6% increase in comparison to the previous financial year. The carrier’s Cargo division recently launched facilities at its hub in Doha to provide a “Seamless Cool Chain”, comprised of a “2,470 square metres Climate Control Centre situated at the airside… equipped with segregated temperature-controlled sections for storing pharmaceuticals and perishables.” This end-to-end supply chain control is expected to further improve Qatar’s standing as a leader of Middle Eastern air freight.
6. Lufthansa Group
Based in Cologne, Germany, the Lufthansa Group (comprised of Lufthansa, Swiss, Austrian, and Brussels Airlines) fell from the fourth position in the Freight 50, with a combined FTK of 9.46 bn. While this represents a 1.6% increase in traffic, year-over-year, the carrier was forced down the list by drastic growth from other German freight company, DHL. According to Forbes, Lufthansa’s revenue and net profits ($41.5 bn and $2.78 bn, respectively) in 2017 are both the highest reported by the company over a ten-year period.
5. Cathay Group
The Cathay Group (composed of Cathay Pacific Airlines and Dragonair) is headquartered in Hong Kong and its Cargo division accounts for 21% of the airline’s total revenue. The company’s first dedicated cargo flight between Hong Kong, Frankfurt, and London, was established in 1981, according to the official site. Now, Cathay Pacific’s Cargo Division services over 47 destinations worldwide. The carrier fell from the fourth position on the Freight 50 ranking, as its total FTK fell by 3.6%, to 10.21 bn. According to Forbes, Cathay Pacific experienced a second year of unprofitability, although the airline’s asset portfolio reached a record high in 2017, with a net value of $24.1bn.
4. DHL Express Group
Operating as the largest European carrier group, DHL Express Group (composed of DHL Air, DHL International, Air Hong Kong, Polar Air Cargo, ABX Air, Southern Air, Aerologic, and EAT Leipzig) rose two positions in the Freight 50 rankings. The carrier reported a total FTK of 10.56 bn, which represents an increase of 15.1% year-over-year. In 2018, at the Farnborough Air Show, DHL Express announced the purchase of 14 Boeing 777s, part of a new strategy to modernise its fleet.
3. UPS Airlines
Headquartered in Atlanta, Georgia, UPS Airlines is part of United Parcel Service, Inc. Founded in 1908, UPS is the oldest company in the Top Ten, and retained third place in the Freight 50 rankings, with a total FTK of 11.26 bn. This represents a 3.9% increase year-over-year. The Company as a whole reported a net revenue of $67.7 bn, according to Forbes, representing a continuation of a ten-year trend of continuous growth. Forbes also ranks UPS among the world’s top 100 most-innovative companies, and the world’s top 50 most-valuable brands.
2. Emirates Skycargo
The state-owned air freight carrier for the UAE, Emirates Skycargo remains in second place on the Freight 50, with a total FTK of 12.27 bn, representing a 0.4% decrease year-over-year. The carrier’s central hub in Dubai allows its 259-strong fleet to reach over 1.5 bn consumers in under eight hours. Current purchasing plans are underway for Emirates Skycargo to almost double its fleet size. According to Albawaba, “In response to increasing demand from its customers, Emirates SkyCargo introduced a range of air transport solutions specific to industry verticals including Emirates Pharma, Emirates Wheels and Emirates Fresh.” Emirates Wheels has transported close to 150 cars per month since the program’s inception.
1. FedEx Express
Founded in 1998, FedEx Express is both the youngest and largest air freight carrier worldwide, with a total FTK of 15.71 bn. Haulage decreased by 0.9% year-over-year, while revenue increased to $60.5 bn in 2016, and again to $63.8 bn in 2017, continuing an eight-year growth trend. FedEx employs 395,000 members of staff, with FedEx Express operating across twelve transport hubs globally. The carrier purchased an additional 24 Boeing 777 variants in 2018, maintaining their company’s position as the largest airline in terms of cargo haulage.