The landscape of logistics and supply chain management is rapidly changing and 2017 looks like the year that disruptive patterns will emerge in logistics management and warehousing. Technology, market forces, data and international agreements are all going to affect the year ahead – so we’ve focused on four key areas where we think logistics will soon change!
There are many pros and cons to delivery drones. While rural and remote customers may find order fulfilment easier with drone technology, cities create many problems with collision, identification and above all threat. The threat ranges from perceived privacy issues to potential terrorist drone use and integrated transport delivery will require tighter regulations and more flexible supply chains. Above all, drones will bring massive amounts of real time data, which leads to our next change to logistics – data management.
Data and supply chains
Data is crucial to an effective supply chain, but using the data effectively means logistics organisations will have to step up their data management, probably using cloud systems and fully digital systems to order, inventory and ship items. The ‘always on’ nature of digital systems can lead to risk from hacking and national governments may also seek access to logistics data just as they currently do with email communications. So what data is available? It’s all in point 3.
The Internet of Things
While almost every ‘thing’ has data functions now, the number of logistics organisations able to use that data is low. That’s expected to change rapidly though. What does data function mean in relation to things? Well, lorries have temperature sensors, packages have positional trackers, every vehicle has a fuel gauge, many of which can be read ‘online’ and so on.
For start-up logistics companies, this data can be used to find margin: making strategic decisions in real-time based on cost-cutting or efficiency increases, for more established organisations mastering data may affect market share. Fuel costs are generally considered to be around 40% of land-based logistics; any savings made in this area could make the difference between success and failure.
Fuel theft is an increasing concern for many large users of logistics and warehousing, while optimising fuel use by optimising routes or combining loads is reckoned to offer a 2 to 3% bottom line improvement – something that many businesses would welcome.
Containers and carriers
A truly significant change in 2017 is the decline in international carrier companies from 18 to just 10, this reduction of competition makes it more difficult for small companies to find advantageous pricing for international container transportation.
To illustrate this fact, the container ship India Rickmers has been sold for scrap – it is the youngest ever vessel to be scrapped, having launched in 2009 at a build price of $60 million and being sold it’s claimed, for less than $6 million, only a few years later.
Such capacity reduction requires each container-load to be maximised if profits are to be maintained, and flexible warehousing is essential if importers and exporters, as well as retailers, are to maintain their businesses.
This means that more and more, warehouse utilisation is key. This is a place where you can save money but also increase the overall efficiency of the business. Utilising your space correctly can be the difference between your business success or failure.
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