The Trends Here To Stay In Delivery And Logistics
Nour Suliman, CEO of DHL Express for the Middle East and North Africa, sets out the trends that will continue shaping the delivery and logistics landscape post-COVID-19.
As the pandemic seems to be waning and the world focuses on life after Covid, the global delivery and logistics landscape is coming to grips with lasting changes. When the world went into lockdown last year, with borders closing and flights being grounded, Covid forced the industry to shift and adapt at a rapid rate. As pressures mounted, trends and innovations were accelerated to keep the world moving, from the overnight spike in demand for PPE and other necessities, to the sharp rise in e-commerce and, more recently, the rollout of vaccines across the world.
Now, as we move towards a post-Covid era, there is indication that these trends, technologies, and innovations will be yielding sustainable returns beyond the pandemic’s realm.
E-commerce And Last Mile Delivery
Amidst store closures, lockdowns and health concerns, e-commerce has been a big benefactor of the pandemic. As online shopping has increased in popularity, the new wave of consumers who turned to shopping online out of necessity, will likely stay now they have discovered the ease and convenience of doing so. Likewise, retailers who pivoted online in order to survive will have enjoyed the benefits of reaching new customers, and will continue to invest in their online sales channels, even as stores reopen.
New last mile delivery services inspired by the pandemic and the need for safe, contact-free options have grown in popularity because of the flexibility and convenience they offer. ‘Buy online, pickup in-store’, curb side delivery, and parcel lockers, count among the latest options gaining traction world-wide. Last mile delivery services have also improved customer experience and increased brand loyalty. With customers spoilt for choice, expectations for innovation remain high.
Technology Innovation
Logistics companies expect technology innovation to deliver significant gains in productivity and performance going forward; they also believe it will enhance the entire customer journey. Automation technologies including AI and robotics are being used for operational tasks such as picking and packing goods within warehouses, and for enhancing strategic planning and
forecasting. This automation is improving the overall efficiency of the supply chain and providing opportunities to overcome cost constraints. Certain technologies were specifically adopted during the pandemic to help enforce social distancing in warehouses. Robotic goods-to-person (G2P) systems, for example, move goods from one person to another – and they perform this task in such an efficient way that they increase productivity, enhance warehouse management, and improve storage density. This technology is advanced and economical, and can easily be tailored to work in every kind of warehouse environment in the future.
Sustaining Sustainability
Sustainable logistics has gained momentum during the pandemic. Consumers are re-evaluating their shopping habits; they have become more conscious of the environmental impact of their online shopping and are turning away from unsustainable brands. There is a higher expectation on businesses to play their part in reducing waste across their entire supply chains, be it through recyclable packaging, electric vehicles, or minimizing their carbon footprint. It is therefore inevitable that supply chains will increasingly prioritize environmental operational efficiency through waste reduction, responsible sourcing, water efficiency, and the reduction of greenhouse gas emissions.
The B2B Transformation
The B2B sector is going through intense transformation. When the pandemic hit, companies from Europe and America suddenly could not get their goods to China, which was severely impacted. As a result, the need for urgent digitalization of B2B supply chain processes to make them more resilient and adaptable, quickly became evident. Today, the way B2B sales interactions take place is definitely changing; the sector is taking on a more digital approach, driven also by a pool of young and digital-savvy talent that is taking on key decision-making roles. Against this backdrop, those B2B businesses that don’t invest in e-commerce channels will quickly find themselves left behind.
Data-led Approach
The unpredictability of the pandemic highlighted how ill-equipped some supply chains were to cope with disruptions to normal procedures. It also reinforced how a data-led approach is crucial for supply chains to become more flexible and resilient.
Supply chains should be driven by data; the faster the data, the more efficient the planning processes can be for complex operations such as cross-border deliveries. Data enables full visibility and transparency of the movement of goods. This means an unexpected change would no longer be a disaster for the delivery journey, but rather an opportunity to reroute the flow of goods across the world and still arrive on time.
Enhanced data capabilities can also give customers a greater and more flexible range of tracking options, while advanced analytics allows links in the supply chain to draw an infinite number of insights and turn them into actionable opportunities.
5G is powering this digital revolution, making data connections faster and more accurate, and transforming the logistics industry’s capabilities and efficiencies as a result.
Diversification Of Global Supply Chains
For decades, globalization has enabled cross-border trade to flourish, yet trade disruptions brought about by the pandemic have prompted business leaders to rethink the vulnerabilities of their global supply lines – namely geographical factors. In the early weeks of the pandemic, China, which is considered the hub of world manufacturing, implemented strict border restrictions, causing delays for commerce supply chains across the world. Those businesses affected struggled to compete for alternative suppliers, and some were even forced to reduce or stop production. Many have since been focusing on de-risking strategies to reduce their reliance on manufacturing in one region, de-centralizing and spreading their production across less risk-averse countries, or regionalizing closer to home.
Whilst some Covid-19-related trends and innovations may taper off in the future, the logistics and delivery business will continue to future-proof their supply chains through data and technology innovation. Not only will this optimize efficiencies and reduce costs, but just as importantly, it will improve the customer experience and create invaluable loyalty.
“Trade disruptions brought about by the pandemic have prompted business leaders to rethink the vulnerabilities of their global supply lines.”