Logistics industry is one among many industries that has been directly affected by the global Covid-19 crisis. This can be seen from the plummeting value of logistics from $7,641.2 billion in 2017 to $5,200 billion in 2020. Now that lockdowns are lifted and countries are reopening borders, the logistics industry is seeing a soaring growth from a boom in goods delivery. Businesses such as e-commerce, healthcare, and pharmaceuticals have a favorable impact on the logistics industry. With the COVID situation steadily improving and the economy resuming normal function, the logistics sector is expected to reach $12,975.64 billion by 2027.
As 2021 is coming to an end, let’s discuss some of the challenges and opportunities for the logistics industry in 2022.
Third-Party-Logistics and Fourth-Party-Logistics
Rising demand for Third-Party-Logistics (3PL) and Fourth-Party-Logistics (4PL) services is projected as e-commerce grows at an incredible rate. 3PL and 4PL have some advantages, including being cost-effective, faster, and more responsive. The worldwide 3PL market is predicted to reach $1.1 trillion over the next six years, according to Allied Market Research. 3PL providers with several warehouse sites will be in more demand, as they make last-mile logistics more efficient. This type of service has some shortcomings, however, including a lack of direct supervision and a greater reliance on the logistics provider by the manufacturer. Nevertheless, the emergence of 3PL and 4PL remains to be an opportunity worth expecting in 2022.
Internet of Things (IoT) and Big Data Utilization
The Internet of Things (IoT) is a network that connects technological devices and physical components with integrated sensors to enable continuous data exchange via the internet. The logistics sector will progressively leverage IoT to provide new solutions to its challenges. IoT Improved insight into assets such as GPS tracking and cargo status. Increased security and real-time notification of lost or stolen assets will manifest as a byproduct of this. IoT can also forecast accurate delivery times, resulting in higher service quality.
Another thing to anticipate is big data utilization. Big data, with its advanced and predictive analytic methodologies, leverages this complex set of information and analyzes the possibility of issues faced by the logistics industry. Big data can forecast aspects such as the finest method of transportation and carrier to deploy in order to optimize revenue and meet delivery deadlines.
For conventional players, Big Data and IoT in logistics may be scary, prove costly in their initial implementation, and involve additional personnel training. However, as technology advances, it will develop pace, and such technologies will become conventionalized. Then, business owners of all sizes may readily embrace to benefit from it.
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Micro warehouses are smaller warehouses dedicated to bringing goods closer to customers, particularly in highly populated large cities. It leads to more effective and speedier last-mile logistics, which helps meet the growing demand for same-day and next-day delivery. In 2022, more micro warehouses are expected to be the trend. Food, beverage, and pharmaceutical items, for example, may not be well suited to micro warehouses since they require a climate-controlled setting. Micro warehouses, on the other hand, are ideal for basic consumer products and garments that require less specific handling.
For all businesses, including logistics, environmentally friendly procedures exist for a reason. Green logistics is a solid idea that the industry will progressively adopt. This is because the logistics industry contributes a significant number of carbon footprint through its operation. On the lookout are environmentally friendly warehouses that employ timers to evaluate and monitor the consumption of resources such as power, heat, water, and gas in their facilities. For courier delivery mobilization, more companies are turning to electric and solar-powered vehicles. Although this can be costly, the effort for eco-conscious practices are to be anticipated in 2022.
The logistics industry by end-use is likely to be profitable for most industries, coming right after the healthcare industry. To be competitive and efficient, logistics firms must be able to keep up with the change and challenges from time to time. For industry participants to survive and thrive, they will need to adopt trends that are predicted to dominate the industry in the future. Now that you have taken a peek into what is in store in 2022, is your business ready to compete among competitors?
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