For many people in the supply chain ecosystem – from manufacturing on one end all the way to the consumer at the end other – the period of 2020-2021 is arguably one of the most tumultuous in modern history.
If you think, however, that it's smooth sailing from here on, you will be disappointed. How governments are responding to the omicron variant of COVID-19, continued geopolitical tensions around the world, and ongoing disruption to international air cargo and cross-border movements are just a few of the growing list of conditions that conspire to keep participants in the ecosystem at their toes.
On the bright side, Collier’s 2022 Global Investor Outlook Report is spinning a positive outlook for the industrial and logistics (I&L) industry forecasting a rebound in investments in 2022.
Soham Chokshi, founder and CEO of Shipsy, a logistics technology provider, says following the pandemic two trends have emerged influencing the tide for the logistics and transformation industry: hyperlocal deliveries & Cross-border freight space. He concedes that things are in a dynamic state and constantly evolving.
According to Colliers, the I&L sector is attracting interest because of the ongoing digitisation of consumption, and the increasingly best shoring of global supply chains.
For his part, Chokshi conceded that this digitisation of consumption is forcing members of the supply chain to “implement technologies and processes to ensure that they could be at the customer's doorstep at a time when they need the flexibility that they need.”
He opines two major trends emerging as a result.
“The first is the quick commerce or hyperlocal deliveries where customers need faster and faster deliveries in the last mile. The other major trend has been in the cross-border space, the freight space, but because of this massive pull in the last mile manufacturers and other participants across the supply chain, have had to really enhance the technologies and the processes,” he opined.
With customers needing goods faster, service providers are now offering shorter delivery schedules without necessarily the added cost that used to be associated with express service. The challenge for service providers is making faster delivery cost-effective.
Chokshi also observed that customers are looking at more sustainable options, whether it is in the packaging or delivery options.
Asked which trend will influence how industry players push forward their end-to-end logistics, automation ambitions, he didn’t hesitate to declare: time to delivery and the cost.
“These are the two biggest driving factors in my mind that are really driving retailers, logistics companies, everyone to really enhance the technologies,” he opined.
Automation in I&L
One of the outcomes of the pandemic is the unplanned rise in consumer consumption particularly of essential commodities. This has caused a ripple effect on the supply chain as everyone from production to warehousing to logistics to retail scramble to meet the unexpected demand.
The Market Research Future (MRFR) report estimates the logistics automation market to reach US$89.72 billion, growing at a compound annual growth rate of 4% by 2024.
Automation will play an important in the streamlining of the I&L sector with automation in warehouses, for example, a top priority for supply chain operators.
Chokshi acknowledges that automation is not a simple process as the supply chain involves multiple players with different levels of capability – at the operations level, technology maturity and financially.
What is clear for Chokshi is that in the quest to deliver goods faster and cheaper, there is no scope for manual intervention in the delivery process. “There should be a system that automatically decides which is the best logistics partner to go with, based on all different parameters,” he opined.
He also see the need for complete analytics and visibility in terms of exception monitoring, to see that as the volumes increase. “As the scope for any errors reduce, it's very critical to have deep analytics, real-time analytics, or not post facto real-time analytics to ensure that we get a seamless visibility and more often exceptions monitoring, rather than just seeing stats,” he continued.
Click on the PodChat player to listen to Chokshi talk in detail about the transformation taking place in the transportation and logistics industry.
- Give us the 30-second elevator pitch of who Shipsy is?
- How would you summarise the state of the logistics industry between 2020-2021?
- Give us a high-level summary of the 10 key trends in the logistics industry for 2022.
- Which of these trends when combined will influence how industry players push forward their end-to-end logistics automation ambitions?
- Given that the end-to-end logistics industry is not a handful of global companies but a broad mix of small, large and multinational organisations, how do you foresee efforts to introduce process efficiency through such things as automation going?
- We may be repeating the question but does the industry leverage technology to scale hyperlocal on-demand delivery operations?
- One of the buzzwords of 2021 is the pursuit of ESG – environmental, sustainable and governance initiatives. Within the logistics industry, how should leaders translate these into practical programmes that work?
- Are you optimistic that things will be better for the logistics industry in 2022?
- Given the many operational issues they face, and the many options they can pursue to survive and thrive in 2022, what is your one advice to leaders for 2022?