Logistics and Supply Chain Trends: 2022 and Beyond
January 6, 2022 •Kevin Baxter
The predictions business has been dicey since the pandemic began, but two years later its effects on logistics and supply chain trends have become more apparent. In looking at last year's logistics and supply chain trends piece, some changes seem to be settling in for the long haul, while others appear more temporary. And of course, there are new , emergent trends to look toward as well in 2022 and beyond.
What Are Some of the Logistics and Supply Chain Trends?
IPI Freight & Transloading
IPI freight and transloading look to grow in popularity in 2022. IPI freight - with IPI short for interior point intermodal - refers to inbound freight brought to the shipper's door rather than a rail terminal or container yard. IPI using the original ocean container and on-dock rail has actually fallen in use and become more costly recently because of container shortages, but a combo of transloading and IPI is a popular and growing solution.
Transloading involves transferring goods from one mode of transport to another and typically out of their original container to get to their final destination. It offers many advantages, both to the shipper as they have more immediate control of their goods, and for carriers, as particularly ocean freight providers itch to get their containers back as quickly as possible. In fact, several major carriers have expanded their transloading business in the past year with more expansion plans announced. The combo of IPI freight and transloading offers the more granular control of goods, the ability to condense loads, getting freight brought to the shipper's door, and again for the carrier, clearing out ocean containers quicker.
Freight Capacity Challenges
The constraints on freight capacity continue to abound. Now three of the past four years have seen the most challenging freight capacity markets in history, with no signs of those capacity concerns letting up. In fact, 2021 was a record setter in a variety of ways, with shortages of containers, trucks, port & warehouse space, and people. As we wrote last year, the market challenges can no longer be corrected by brute force. There simply aren't enough resources to throw at it.
The impact of capacity issues on product availability and costs seem to be here to stay, at least for awhile. Rates spiked across the board in 2021, whether they were trucking, intermodal, or just about any other transportation mode. And that expensive trend for shippers is likely to continue.
Logistics On Demand
Demand spikes will likely continue their unpredictability. While the holiday season still brought with it plenty of increased product demand, other times of year were no slouch either. With the pandemic, consumer demand shifted drastically from services to goods, and led to considerable supply chain stress in 2021. This shift could potentially balance out at some point when the world fully reopens, but that likely won't happen right away.
Of course, that demand for products - and an increased desire to shop from home - continues to fuel ecommerce's exponential growth, which in turn bypasses the traditional retail brick and mortar store step in the supply chain with omnichannel distribution. In other words with omnichannel, many customers are no longer interested in - nor are they expected to - travel the last mile to the product they want or want to return. Also relating to demand and shifting supply chain dynamics is world, country and city population growth. And as with ecommerce, the continued shift to remote work or at the very least hybrid working environments not only changes some shopping patterns but also leads to flexibility in where people live.
Logistics & Supply Chain Technology
Another year goes by, and even more new logistics & supply chain technology is making its mark on the industry. Amazon continues to lead in many ways in this regard, but other technology like autonomous trucking, advances in supply chain visibility & tracking capabilities, integrated, cloud-based TMS software solutions and much more are making their mark. Just as with other industries, the more distributed than ever logistics and supply chain workforce is using the cloud, remote meeting apps, VPN, and more to do their jobs as effectively - and sometimes more - than before.
Expect augmented intelligence - using AI to assist logistics pros - to continue to gain adoption, something AI has already done in certain areas. We mentioned driverless trucks, and while that technology is moving forward, so too is the idea of autonomous rail. Just imagine a form of transport and put the word "autonomous" in front of it, and there's probably an idea out there getting closer to reality. And more technology is always on the way with logistics technology startups dealing in areas like delivery robots, automated warehouses, and more. Many of the logistics problems of today could be solved by the technology of the not too distant future.
Another startup deals with sustainability, and that continues to be a priority in the logistics space. Companies are well aware of customer attitudes which place a high value on social and environmental responsibility. Numerous studies have shown repeat customers are more likely for companies with eco-friendly practices.
As a final technology note, with the increased adoption of cloud-based and other online/automated systems comes increased risk of cyber crime. While logistics and supply chain companies had already been noted ransomware targets in the past, 2021 saw ransomware attacks affect more, as well as noted shippers and even infrastructure itself. The risks are not going anywhere, so logistics and supply chain cybersecurity is a must to include in the logistics & supply chain technology mix.
What to do next
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