Logistics Trends Post Covid

Things are slowing opening back up.  Hopefully, the trend continues with no significant spikes in infection rates.  That being said let’s look at some industry trends we should all be aware of in 2021.  

Logistics will be a main focus of transportation and logistics (T&L) deals during the ongoing COVID-19 pandemic and in the post-COVID-19 world, as businesses will look to increase their online commerce and last-mile services in 2021. The pandemic has created a sizeable shift in the logistics sector. Consumers have leaned into online shopping, and pandemic-related lockdowns have created a need for businesses to improve their last-mile services. Because of this shift, many companies have been forced to augment their last-mile offerings and contemplate fresh approaches to client services and corporate partnerships.

Pandemic-driven growth in online commerce has accelerated corporate investment in digital services, driving certain companies to rely on Mergers and Acquisitions to enhance their online infrastructure. In a time where consumers expect swift, often same-day deliveries with real-time tracking, 78% of companies in Canada in T&L say last-mile delivery is the most inefficient process of their supply chain. Many companies have considered using M&A to bolster their existing final mile services. Some recent examples include:

• Target’s acquisition of Deliv, Inc. (May 2020) to acquire the same-day delivery start-up’s technology that assists in the batching and routing of orders.
• Costco’s acquisition of Innovel Solutions, Inc., a middle-mile and last-mile delivery and installation business (March 2020), to refine the company’s warehousing, shipping, and home delivery processes.
• A U.S. based multinational retail corporation’s acquisition of JoyRun, Inc. (November 2020) to incorporate JoyRun’s peer-to-peer food and drink delivery service into its own last-mile logistics.

Will online commerce continue its meteoric growth sparked by the pandemic?  Will consumers continue to embrace delivery culture? The stakes are high for companies invested in the T&L industry, and the upheaval sparked by the pandemic may open up avenues for a rethink of distribution strategies.

Artificial Intelligence is Becoming a Significant Element in the Future of Logistics Programming

Research shows that artificial intelligence (AI) is better at predicting outcomes and making projections than unaided human cognition. Richard Nisbett and Lee Ross, two cognitive scientists, are explicit on this point, claiming, “Human judges are not merely worse than optimal regression equations; they are worse than almost any regression equation.”

The human element is inherently more complicated in decision making due to its emotional and societal influences.  AI programmed decisions simply don’t have those cognitive challenges. It remains to be seen how well AI can deduce an appropriate decision if it had not been previously programmed to some extent.  AI’s claim to fame is that it learns from every experience, but it would have to have some programmed base scenario from which to base its’ decisions.  It is complicated stuff but has a hugely significant benefit in the future of decision making at a speed at which humans cannot possibly compete.

A vast amount of opportunities exists to put AI to work in shipping and logistics, including:

• More accurate predictions for customer demand mean more lead time and opportunities for distributors and shippers to engage in predictive shipping. 
• Substantial predictive insights into back-office functions, such as looking for potentially risky language in business contracts.
• Optimizing shipping routes and making last-mile delivery more efficient, helping companies save money on fuel costs.

Green Initiatives Are Here to Stay

There are federal and state dollars available in the form of grants and tax breaks for Green Initiative applications and I suspect they will be available for years to come, depending somewhat upon the future political power structure.  So is born the circular supply chain.

Companies everywhere are heeding consumer demand for greener products and processes. Research shows that products marketed as sustainable accounted for half of the growth of the consumer packaged goods market between 2013 and 2018. Therefore, the world’s supply chains are becoming circular rather than linear. For instance, manufacturers are looking at ways to improve product longevity and the ease with which they can recover, repair, and resell goods.  Who knows, the virtual milkman delivering to your door and picking up the empties may re-emerge.

Stay Safe Everyone.

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Author
Michael Gaughan
Technology Officer
Land Link Traffic Systems