2020 Logistics Trends to Watch For

How does earning a slice of a $1.64 trillion cake sound? That’s the amount businesses across the United States spent on logistics in 2019.

As you angle for revenue as a logistics business, you need to continue evolving to meet customer needs. Part of your business should be to track technology and industry advances that keep shaping customer demand.

Here’s a look at five elemental 2020 logistics trends to assess and adapt your business around.

1. Capacity Crunch

Capacity crunch refers to the logistics industry’s reduced capacity for shipping. The reason behind this is not enough people are delving into the logistics industry.

With fewer people entering the space, each retirement inevitably implies no ready replacement. Thus, the overall capacity to serve a customer gets reduced slightly.

In response to this pressure, industry players are adapting. Auto brokers have developed infrastructure to connect vehicle carrier networks and their customers. These companies facilitate and supervise the shipments customers need from the carriers.

Even in the driveway jobs segment, providers are aggressively moving to serve customers. That’s in the face of demand for the service outstrips supply.

Furthermore, trucking firms are continually going out of business. Ultimately this leads to lesser capacity on the roads to serve customers.

More firms are finding it harder to make capital investments. As such, equipment shortages keep persisting due to challenging economic conditions.

Ultimately, technology is expected to offer compelling alternatives to the capacity crunch. Driverless technology is one such alternative that holds great promise for the industry.

2. Shipping Tracking APIs for Customers

One of the most considerable difficulties for clients is when it comes to waiting for a package to arrive. The lack of visibility on that process has led to many customer attrition cases.

Consequently, you need to alleviate the pressure from the customer on when they will receive their package.

Since many firms rely on carriers to deploy their shipping, they have to contend with the technology these third-parties use.

For many carriers – who struggle with technology – their endpoints are based on the SOAP/XML architecture. However, this technology is outdated.

To respond to customer pressure on more visibility on product arrival, shipping APIs were developed to integrate with such outdated technology.

You can give your customers the feeling that they already have their packages through a shipping tracking API. Your customer can track their package all through and are no longer extremely anxious due to a lack of knowledge on the package’s arrival.

As more clients get used to this benefit, it will rise to be an expectation of logistics businesses. Thus, further investments into technology to refine this experience will become inevitable.

3. Focus on Sustainability

As a logistics business, the clients you serve are more sensitive to sustainability. How their actions impact the environment matters now more than ever before.

A survey by the Advertising Specialty Institute bears this truth. In it, 42% of America’s consumers declare they would feel more positive about a firm that has a product favoring the environment.

Such customer sentiment is only poised to grow as more clients witness environmental degradation.

Consequently, you will have to adapt your operations to support greener logistics.

For example, you can make it a point to source packaging material from partners who promote sustainability. That means beginning to make a move towards recycled and reused packaging.

Additionally, you can leverage technology to help reduce your carbon footprint. For example, using GPS, you can craft the most efficient delivery route to reduce your emissions.

The routes that such technology helps you develop feature minimal idle time, little traffic, and no double backing. You spend less on fuel, which is good for your pocket and the environment as well.

As you adopt and deploy greener logistics practices, you should invest in communicating that to your client base. Although it may seem like a short-term cost, it will build more brand loyalty in the long run.

4. Electronic Logging Devices

An electronic logging device (ELD) is the equipment used to record a driver’s Record of Duty Status (RODS). Here, a device connects to the vehicle’s engine and sends the driving time to the ELD.

Before ELDs were made mandatory, drivers would manually log the hours they worked. The ELD system was introduced to make it easy and accessible for authorized people to track, manage, and distribute RODS data.

In 2012, the federal government passed the Moving Ahead for Progress in the 21st Century (MAP-21) bill. Through this legislation, the government made it mandatory for commercial drivers to install an ELD in their vehicles.

From April 1st, 2018, the Federal Motor Carrier Safety Administration moved to issue any driver without an ELD out-of-service orders.

The net effect of this rule has been a reduction in the number of hours and trips a driver can cover in a given period. That has, in turn, impacted profitability, implying firms may pass an increase in costs to customers.

In the short term, the increase in prices due to lesser capacity is expected to continue. However, in the long run, using ELDs will increase productivity and efficiency for companies that comply.

That increase will then act as a competitive advantage that helps businesses differentiate themselves.

5. Renewed Focus on Tier II and III Cities

In the recent past, tier II and III cities have delivered customer-related behavior that’s influencing logistics.

These cities have, in recent history, witnessed increasing consumption patterns. Where customers consume, logistics will move to serve their needs.

Consequently, more investment in logistics has been flowing to these cities.

New warehousing facilities are developing in such areas. That’s in a bid to shorten delivery times as more consumers move to eCommerce.

Additionally, more businesses are investing in setting up fulfillment facilities in these areas. Doing so helps them access cheaper labor.

In the near future, these cities are predicted to grow in population. That portends more logistics investments to keep pace with the demand from the growing population.

Keep a Close Eye on 2020 Logistics Trends

Remaining profitable in logistics calls for being responsive to any shift in industry trends. With that in mind, you need to follow 2020 logistics trends and investigate successful ways to adapt your business.

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