Technological advances have brought rapid change to the global logistics industry in recent years. Businesses are operating in a highly competitive sphere, with speed of delivery and user experience emerging as crucial factors for success. The market has attracted a number of new players, such as e-commerce giant Amazon. According to various reports, Amazon’s handling of items sold by independent merchants on its site doubled in 2016.
In today’s blog, we’re going to explore the key trends that could impact the logistics industry in 2017.
ROBOTICS & AUTOMATION
The demand for robotics and warehouse automation is the result of an explosion in labour-intensive e-commerce and the shrinking size of the workforce in the western world. While the use of collaborative robots is the early stages presently, it is a real option for companies that are suffering from the decline in labour availability. Also, for any company struggling with the cost of labour, developments in robotics and automation certainly warrants closer attention.
Amazon already has their own robotics division, formally Kiva Systems, using robots to perform real-world tasks of picking orders and restocking shelving.
The market is currently experiencing strong growth, with many prominent companies showing greater confidence in new robotics technologies that can yield a return on investment (ROI) in less time than it took a few years ago. Worldwide sales of warehousing and logistics robots reached $1.9 billion in 2016 and Warehousing and Logistics Robots market report expects that the market will continue to grow rapidly over the next few years, reaching a market value of $22.4 billion by the end of 2021.
One of the other key factors affecting growth in this market is the modernization of transportation infrastructure. For example, autonomous truck development has emerged as a key trend in recent years.
Autonomous vehicles present companies with a realistic way to slash the cost of transport, once all the regulatory issues have been overcome. With a number of companies lobbying for clarity on these issues, it’s likely that we will see autonomous vehicle technology become more prominent in the logistics market in 2017.
The growth of last-mile delivery and demand for next-and same-day service is putting pressure on retailers in the logistics industry. New marketplaces, more collection points and shipping destinations have led to an increasingly complex supply chain.
E-commerce has opened up a range of new logistics challenges. We’re going to see retailers adopting omnichannel delivery strategies, which creates opportunities for third-party logistics operators to offer services in collaboration with online retailers. We saw an example of this earlier this year. Deutsche Post secured a contract with Amazon to deliver groceries as part of the American retailer’s AmazonFresh service in Germany.
There are very few industries that won’t be affected by advances in artificial intelligence. Like many companies in the retail sector, logistics’ companies could begin using chatbots to handle sales, customer services and operations tasks traditionally done by humans.
We have previously mentioned robotics and automation. Artificial intelligence’s influence will also be seen in the use of robotics and sensors for services like stacking, order picking, checking on stock level and re-ordering.
Smart glasses could also be used for a number of tasks, such as displaying product information, scanning barcodes and supporting indoor navigation. Replacing traditional hand-held scanners with smartglasses could lead to a number of benefits, including increased productivity and reduced error rates.
A recent retail study found that 79% of U.S. consumers would be “very or somewhat likely” to request drone delivery and 73% said they’d pay a $10 surcharge for the added convenience.
Logistics experts believe drones present a new form of express delivery service for consumers where products can be delivered via carefully coordinated air networks. Amazon have been working on a drone service for sometime. On their website, they say:
“We're excited about Prime Air — a delivery system from Amazon designed to safely get packages to customers in 30 minutes or less using unmanned aerial vehicles, also called drones. Prime Air has great potential to enhance the services we already provide to millions of customers by providing rapid parcel delivery that will also increase the overall safety and efficiency of the transportation system.”
One new report says drone technology provides the best option for logistics service providers to tackle supply chain problems, which usually involve last-mile connectivity and labor issues. It says recent developments surrounding drone technology have generated positive signs that the technology has the potential to be adapted into logistics delivery services between 2017 and 2020.
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