The Various Factors Involved In the Transformation of the Logistics Sector

Logistics activities, a crucial part of today’s global economy, are now at an unprecedented stage of transformation, accompanied by new technologies to serve the changing needs of businesses. Traditionally, including transportation, customs clearance, and warehousing; nowadays, with the development of the online economy, e-logistics, including e-commerce fulfillment warehouses, last-mile delivery, and reverse logistics, are extended activities of logistics are becoming more and more critical.

Regarding transportation and shipment, end-to-end visibility has been provided to stakeholders at the maximum level, allowing them to easily track and trace the cargo. For example, at the container level, there is a “smart container” with an external device connecting to GPS that generates a wide range of data in real time, such as position, movement, ambient temperature, door opening, and shock. Some leading shipping container companies, such as MSC CMA-CGM, have already co-operated with Traxens (a technology start-up specializing in supply chain monitoring) to increase the benefits of the supply chain by bringing accurate door-to-door visibility. Strong connections between different parties based on cloud-based systems and blockchain give us an overview and a detailed look at our shipments. Once placed on the shipper system, booking is immediately linked to the carrier/ trucker system. The design records all the milestones, which helps the shipper/ consignee collect the database for reporting and data analysis.

Optimization of vehicle utilization is also going to higher levels, with platforms and applications allowing shippers to place bookings easily and directly without brokers. Hence, clients control transportation routes, costs, and inventory more. On the other hand, carriers are eligible to utilize their vehicle capacity to maximize their profit. Traditional taxi businesses were shaken by the arrival of ride-sharing applications, which have worked well recently; this is happening to the trucking business, too. Uber-like services, as well as apps, have been developed and have started to be used widely.

There is also significant change/transformation in warehousing activity; we have been experiencing different stages in the advancement of warehouse management, such as information management by warehouse management systems, then mechanization in the warehouse to smooth operations by putting other machines, conveyors, and facilities into place. Now, we are at the stage of the Internet of Things and robotic automation; warehouse activities can be very much more automatized and standardized. Using robots in a warehouse for picking and inventory helps reduce a lot of dependency on humans, increasing efficiency, reducing space rental and labor in many countries since the first day of implementation, and increasing accuracy significantly. “The average order picker can pick between 60 to 80 picks per hour, compared to a pick rate of up to 300 picks per hour when leveraging sorters and conveyors. Automated Storage and Retrieval Systems (AS/RS) have the potential to increase order accuracy levels to above 99.99 percent” (20 warehouse automation statistics that’ll blow your mind – CEL consulting). With these advantages, robots like Automatic Guided Vehicles are increasingly used in pieces-picking warehouses. It leads to the change of human’s role in this industry. Instead of simple and repeated task handling, which is now replaced easily by robots, logisticians are expected to work on more added-value tasks such as setting, controlling and improving procedures, machines and robots.

"Logistics cost nowadays is about 8 percent to 25 percent of a country’s GDP, and the logistics industry is changing positively and profiting from advanced technology"

Growing environmental concerns now raise issues that concern everyone, and the logistics sector is not out of that trend. New regulations related to sulfur emission in the marine section will take place at the beginning of 2020; this is the latest change in the industry that impacts carrier shippers and customers by forcing a lower global sulfur cap on fuel content from 3.5 percent to 0.5 percent. Some carriers have started installing scrubbers on their ship—the cleaning technology had more potential in the shipping industry from the first commercial system even in 2006. Consequently, it’s a trade-off that increases the eco-friendly level, but transit time is forecasted to increase, which impacts the business environment. In addition, new and/or more eco-friendly transportation modes such as drones, electronic trucks, and cars are increasingly popular. The usage of packaging material is also moving toward the trend of reducing, reusing, and recycling to minimize impact on the environment. For example, eco-friendly multiple-used plastics replace single-use plastic, and foldable plastic boxes replace carton boxes.

Logistics cost nowadays is about 8 percent to 25 percent of a country’s GDP, and the logistics industry is changing positively and profiting from advanced technology. Hence, optimization in logistics activities will help increase the economy’s competitiveness. Regardless of the type, transportation and logistics activities have many options in terms of advanced technology. Hence, improving performance in three aspects: profit, people, and the planet, and keeping up with modern technology is essential.