Recent Trends in the Logistics Industry
In 2020, e-commerce growth continues with no signs of tapering off due to dependency on logistics and industry developments to support this boom. Soon we can expect to see certain trends in the logistics sector. Check out some of these upcoming anticipated trends…
Increased Visibility
The retailers have been focusing on improving the post-sale experience as a tactic to breed loyalty gain market share. By doing so, they can invest in better tracking systems to give consumers up-to-the-minute visibility. Many logistics managers are giving options to follow your delivery with live map and updates. Theses type of tracking systems enables customers to see exactly where their package is for final delivery.
Such tracking technology is equally important in the B2B sector to maintain an optimal level of inventory that will help to reduce out-of-stock situations and minimize the expenses of supply storage. The companies with advanced supply chains are being redesigned to offer an extra layer of planning and efficiency. This has become essential to remain competitive and reduce operational costs.
Price Competition
With a rise in e-commerce purchases an opportunity has come up to raise the existing scale and fleets are ready. These companies are preparing their truckload businesses by lowering their prices to gain market share. Larry Savage Jr says that price competition will definitely increase in 2020 among the logistics companies and this has already began to reduce the margins of traditional freight brokers.
This trend is leaning towards cost cutting but the question of concern is whether it is sustainable or not. Drivers will be reluctant to accept a decrease in wages, and due to a shortage of drivers the brokers will take the largest hit. Larger carrier fleets are increasing the payout of drivers while smaller ones are reducing and this might make a shift of drivers from smaller carriers to larger fleets.
Rising Operations Costs
In contrast of this push to reduce the carrier rates, the costs of operation will continue to increase due to state and federal regulations and there will be constant pressure to reduce the environmental impact of the industry.
The department of transportation is always looking to ensure that roads are safe and introduce laws according to the latest mandates. For example, new laws requiring Electronic Logging Devices have submerged, causing companies to invest even more.
The states continue to expand DOT initiatives for better safety and environmental laws. Larry Savage states that all logistics companies must follow the compliance while meeting the most stringent requirements. The higher operating costs leads to increased prices for customers, and thus it will be interesting to see how the competing trends of decreased prices and higher operating costs affects the total costs over a year’s time.
Logistics Growth
While we will continue to see growth in parcel package deliveries in 2020, we will see an even bigger spike in the online sales of items demanding much more logistics and product categories. Due to this new trend in e-commerce, there will be an increasing need for automated fulfillment solutions.
Larry Savage Jr Birmingham realized that since consumers have been conditioned to expect that their online purchases will be delivered quickly and efficiently, this will continue to put pressure on sellers of oversized, fragile, and high-value items to make more investments in logistics to cater to this growing audience.
