Future Trends in Logistics in a post COVID world

Evidently, the global logistics industry has risen to the unprecedented level of challenges presented during the Coronavirus pandemic. As a Group, we have had to be flexible to the peaks and troughs of demand whilst protecting staff and customers livelihoods. 

With the rapid growth of eCommerce over recent months, the logistics and warehousing industry has been launched into a future that hadn’t been projected to happen for several years. With this incredible change, there have been many lessons learnt. 

Changes in 2020

The global pandemic has had an inevitable and never before seen impact on logistics and warehousing companies in the UK. The initial stages of the pandemic saw a decline in business-to-business logistics, disrupting supply chains and spreading uncertainty. However, there has been an enormous eruption in the business-to-consumer market as customers relegated to their homes turned to internet shopping like never before.

 Here is a summary of the major impacts we’ve seen over the past 6 months. 

Increased Flexibility – Businesses have quickly learnt the need to have a broader set of partnerships and associates in order to manage risk and expand their exposure within the market. Processes have to take a less integrated and rigid approach to allow for that flexibility and a wider set of providers. 

Optimisation – Data and technology play a major role here, greater handling and knowledge of supply chain logistics are key. Using data from warehouse to destination in order to track packages in real-time and gain greater visibility for futureproofing. 

Sustainability – Warehousing and logistics companies face increased pressure from consumers and authorities to respond to growing environmental concerns, given the sector is a major contributor to the global carbon footprint. This is only likely to grow as demand increases. Technology will again be critical in tracking processes and helping drivers to reduce unnecessary fuel consumption and optimising driving in order to stay safe. It can also be monitored through packing materials, energy sources and air miles etc.

International Trade – COVID-19 has impacted international relations when it comes to trade and may call for stricter regulations and requirements when it comes to imports, possibly increasing costs. With a possible increase in cost, it could switch focus onto domestic trade in the future. 

How will these changes affect future trends in Logistics? 

The events of 2020 so far have taught many a lesson in business, raising the profile of the logistics industry and international supply chain. There will be notable business casualties as a result and we are already beginning to see this happening. The following trends are expected to be seen as we emerge from the pandemic:

Less Single-Sourcing – As businesses avoid putting all their eggs in one basket, they will likely expand partnerships, perhaps even sourcing closer to home. 

New Technologies – Increase in new technologies and integration within the logistics and warehousing sector is an ever-increasing occurrence. Following a period of such high demand and uncertainty, customers will need the reassurance that eCommerce fulfilment companies are fully prepared and are streamlining processes to allow for rapid change or demand. 

Investment in Warehousing – Following the enforcement of flexible working, and an increase in online purchasing the need for commercial real estate falls mainly on the logistics and warehousing sector. There is likely to be an increase in the need for warehousing space, distribution centres and general industrial space. 

It is clear that distinct changes in buying behaviours are likely to stay, those who were reluctant to shop online before are now confident to do so. Before the pandemic hit we were already moving toward and planning for the growth of the new ‘shopping experience’, whereby increasing numbers of individuals enjoy the luxury of eCommerce delivery direct to their homes. COVID-19 has catapulted this experience more than was imaginable six months ago, further increasing the need for automation and optimisation within logistics and hopefully cementing the rapid growth of freight forwarding.