It’s that time again, when the start of a new year leads everyone to make predictions about what we can look forward to in the next twelve months. We’ve got our own list for our area of expertise — the logistics industry — and we’d like to share our thoughts on the trends, ideas and movements that will define it in 2022.
Some of these are familiar concepts and have been moving towards a breakthrough point, some have stayed mostly off the radar while building momentum and others are predictions about what could be the next big thing to dominate the headlines. No matter what their recent history, they are all set to help shape the logistics landscape going forward.
There is so much going on in the logistics industry that we don’t even have to mention any (hopefully) temporary issues associated with the COVID pandemic. Instead, we can focus on deeper, more transformational forces at work in a sector that performs a crucial role in every economy.
Here are our 6 trends to watch in logistics in 2022.
Let’s start with something that has quickly moved from the edge to the center, as public opinions on the subject of sustainability have shifted. The survey results are clear — consumers like recyclable packaging & materials and it’s increasingly something they look for when shopping online.
70% of consumers would pay more in order to support greener logistics operations. Since supply chains are responsible for 90% of industry’s ecological footprint, this is the area that has the opportunity to make the most impact on this issue.
Consumers are paying more attention to finding brands that are aligned with their values. Responding to these concerns is not just part of being a good corporate citizen, it makes business sense.
Sensitivity to customer expectations is a must, not just for retailers but the logistics partners behind them. Fortunately, there are a number of ways that fulfillment operations can reduce waste, recycle where possible and cut down on the overall environmental impact of packing materials.
In the coming year, look for retailers to devote more messaging to highlighting their commitment to a greener, more sustainable policy when it comes to order fulfillment.
The continued rise of automation
Logistics is a labor-intensive industry, a growing industry and full of opportunities for technical innovation to introduce new efficiencies. In other words, it is absolutely ripe for the further automation of any number of processes. From picking items off shelves to door delivery and everything in between, the coming year will see even more advances in automated services.
Machine-driven automation has long been a feature of fulfillment services and various points in the supply chain, but access to the technology has been democratized and it is no longer the exclusive domain of the biggest names in the business.
With more options and access than ever before, logistics operations of every size are upgrading their services and automating what they can, driving a huge surge in the value of the warehouse robotics market.
Here at Omnipack, we have implemented a number of automation solutions and we’ve even been awarded for the adoption of changes to the delivery process that reduced employee involvement from 94% to 16%.
However, the journey with automation doesn’t just end with warehouse maintenance and product audit digitalization. Global retail companies, such as Amazon, have already taken it a step further with the incorporation of robotics into delivery services as well.
Logistics can benefit greatly from the automation of repetitive tasks, just as many industries already have. And, also like other industries, it can benefit from freeing its human labor force to concentrate on more important tasks and services.
More cross-border logistics
eCommerce has shrunk the map of the world and sending across national borders has become much less of an obstacle than it used to be. Reaching new consumers in new markets is as easy as setting up a website in that market’s language. Omnipack CEO Tomasz Kasperski highlights the simple reason for the dramatic rise in cross-border eCommerce:
Regulatory changes have produced an environment where it is much easier to sell across borders. Now eCommerce operations can focus on things like creating the necessary language versions of websites and content marketing along with working out costs of shipping and returns rather than dealing with administrative obstacles. The result has been an immediate and continuing rise in cross-border sales.
This trend has resulted in an even greater importance of logistics partners, who are now being called on to service more markets just as quickly as their domestic customers. Physical location, access to transport networks, optimized systems for processing returns — all this and more are now on the checklist of every online store looking for a fulfillment service to support international expansion.
Staff recruiting and retention
Driver shortage is a serious issue in supply chain management and will continue to be a challenge in 2022. Currently, the industry is facing a shortage of more than 60,000 drivers and the number is steadily growing.
Given the role of road transport in logistics and the broader economy, ensuring there are enough qualified drivers is a must. Not only are there not enough specialists to provide the required services, but rising prices caused by global inflation prevent supply chain companies from investing in more trucks.
All this results in the stagnation of resources, postponed deliveries, damaged relationships with both suppliers and partner businesses, and more ongoing challenges. That is why addressing staff recruitment and retention will be an important theme in the coming years.
In a tight labor market, the same pressures apply to positions throughout any operation. This has led many retailers to discover the value of a logistics partner that can take over certain responsibilities and enable a leaner workforce that is better able to concentrate on the core mission of the eCommerce store.
Outsourcing tasks related to order fulfillment — storing, picking, packing, sending & processing returns — has proven to be a smart move for many online retailers, allowing them to avoid staffing headaches while being able to devote more resources to increasing sales and improving the customer experience.
Last mile delivery
The last-mile model implies the end-to-end delivery, where the goods are delivered straight to the customer directly from the warehouse. Recently, last mile has become the industry standard, which is why it is no longer “recommended” - it is expected. Customers demand fast, accurate and cheap (if not free) delivery and failing to provide it is a major handicap in the market.
Last mile is generally a serious challenge for the SMB companies, as large global brands like Amazon already have their delivery system perfected. Smaller businesses have to rely on third-party logistics, however 2022 might be the year when they shift to last mile as a service.
The major benefit this solution offers is that it tends to be more cost effective than partnering up with third-party delivery companies like DHL or FedEx. This way businesses will be able to provide more personalized customer experience, thus strengthening the brand image even further.
And while the trend overall is beneficial for the business owners as well as their clients, supply chain managers are left to wonder how to address this issue without losing a significant source of their income.
There are two solutions that are most likely to be popular in the next year - establishing fruitful relationships with the local delivery companies to avoid vast price differences and relying on technology. After all, almost every trend in supply chain management for 2022 will be about tech advances.
Growing demand for cloud
Cloud-based computing surely provides an upper hand when it comes to supply chain management. Back in 2017, Gartner believed that by 2021 over 90% of spending within the supply-chain sector would be dedicated to Cloud supply chain solutions. As we enter 2022, it’s safe to say that investing in Cloud technology is the right move.
Utilizing cloud-based systems in supply chain management is becoming essential for core processes optimization. Cloud computing allows logistic companies to facilitate scalability, improve reliability, and reduce maintenance costs. Improved security and better data retention are other benefits.
Cloud systems can be applied to many different parts of the operational processes. Cloud-based enterprise resource planning (ERP) can help to manage autonomous trucks; Cloud software allows for easy packaging planning and production; not to mention numerous benefits cloud technology can bring to everyday processes like product shipping and back-office operations.
There are tons of effective Cloud solutions for effective and optimized supply chain management already, but 2022 is expected to bring even more.
Also worth a mention
Before we finish, let us add a few words on some other trends that are set to continue in 2022:
- 3D printing and Products-On-Demand
Just-in-time inventory was the Holy Grail of logistics twenty years ago and now another last-minute solution is ready to change business models everywhere. Advances in 3D printing have led to stunning results and warehouses everywhere might soon be full of printers that create the stock that used to sit on shelves as it is ordered.
- Blockchain technology integration
Blockchain has many benefits supply chain management can potentially leverage. Starting with improved inventory visibility and overall transparency all the way to enhanced security and timely notifications, blockchain technology offers a new level of tracking and monitoring that’s unprecedented in the supply chain industry.
- Local extensions replacing global expansion
Global supply chains have proven to be difficult to maintain during the pandemic, which has led to the rise of local logistic companies. This is expected to be a continued trend in 2022, as there are numerous benefits local supply chains bring, such as more control, increased sustainability, and less exposure to the impact of global economic or political struggles.
- Circular supply chains
Within circular supply chains, products that are returned to the supply chain are reused, recycled and resold once again, thus significantly lowering the industrial eco footprint. Yet, while desirable, positive, and needed, this trend is still relatively new. That’s why 2022 most probably won’t be the year for a big breakthrough, but instead, it could be the best time to lay solid foundation for an upgrade that, without a doubt, is coming.
There are plenty of ongoing trends and futuristic innovations to supply chain management we all have to look forward to. However, they all are united by the same theme - technology. More AI, Cloud, and IoT solutions are on the way. The pace of advances in technology continues to exceed expectations and 2022 will be another year of huge leaps forward in the logistics industry.