The world as we know it is in a state of rapid change.
THE 5 BIGGEST LOGISTICS TRENDS
III. Customer Experience
The rise of digital has put customer experience in the spotlight.
We are living in a time of infinite possibilities to create outcomes that inspire and improve the way we work and live. Here’s our take on what we see as the ‘Era of Logistics’ and an age that is ripe for human excellence.
Customer-centric innovation across the world
Over the past two decades, advancing technology, new business models, and dramatic shifts in customer behavior are all trends that have reshaped the logistics industry. As the world’s leading logistics company, we make every effort to stay on top of the logistics trends and ahead of new developments. In fact, we publish the Logistics Trend Radar, now in its fifth edition, which explores their impact across six sectors.
But what are the bigger trends in logistics – the ones that transcend our industry and are likely to transform the way we work and live? Recently, we took a closer look at today’s mega trends – Digital Technology, Diversity & Inclusion, Customer Experience, Future of Work, and Sustainability – and discussed them with leading industry experts. We invite you to relive the experience and hear from our speakers and panelists. Below we outline each of the five mega trends shaping the logistics industry and, ultimately, the way we work and live.
The world as we know it is in a state of rapid change.
THE 5 BIGGEST LOGISTICS TRENDS
III. Customer Experience
The rise of digital has put customer experience in the spotlight.
IV. Future of work
What are the short, mid and long-term impacts on the way we operate?
II. Diversity & Inclusion
Equity and inclusion define the “new normal” in the workplace.
Putting the world back on a path of sustainable, equitable, and inclusive growth.
Digital technology has been a critical catalyst of change in recent years – and one of the most disruptive trends in the logistics industry. Some people question whether it is a blessing or a curse, but at DHL we believe it is a chance to make things better.
Technology is redefining the way people live, work, and socialize. Some of us don’t even stop to think about how digital our lives have become. The smartwatch on our wrist monitors our sleeping patterns, the smart coffeemaker in the kitchen brews a fresh pot when we wake up, and the smartphone in our hand keeps the world at our fingertips – or just a voice command away.
Digital technology is an opportunity, and it always has been. New innovations come online every day and the pace of change is only accelerating. Twenty years ago, we had a team at DHL examining e-commerce. Now this booming sector relies on our state-of-the-art logistics solutions. Technology has allowed us to shape the future – to develop new solutions and make lives better.
However, it’s important to recognize that although digitalization is referred to as a trend in the logistics industry – and in all industries for that matter – it is an evolution. And it’s much more about people than products and solutions. It’s about how we leverage digital technology. We’ve repeatedly asked the question: are we using it well? How can we put technology to good use – to be more productive, foster collaboration, groom better leaders, and make better decisions for our people?
Enhancing the customer experience, our employees' experience and increasing operational efficiency.
Like logistics itself, we see digital technology as an enabler rather than just a logistics trend. We can use data and systems to better understand our people, which allows us to personalize decisions and provide information and support as they need it. Technology can create a better platform for engagement, maximize the skills of our workforce, improve job satisfaction, and lead to more creativity, better customer service, and ultimately a better organization.
The pandemic has not only reinforced this idea, but it has also forced us to act fast. Suddenly, we had to rely on technology to connect with others while working from home. We learned to leverage tools that were already there, like video conferencing. We found out that our people are just as or even more productive when working remotely. We discovered that the office is more than a transactional place where we get things done. It’s also a social place. And, in fact, the workplace of the future might just become a center of interaction and creativity while the home or remote office becomes the space where we put those ideas into action.
As one of the world’s largest employers, a commitment to diversity and inclusion is a clear trend in the logistics industry and beyond. In fact, it now matters more than ever before. To be successful, companies need to foster a “new normal” in the workplace based on equity and inclusion of all forms of human diversity. Understanding what diversity is and ensuring everyone feels included are very powerful drivers of service excellence and customer satisfaction.
Experts across all industries will tell you that diversity is everyone’s responsibility. But how do you make that tangible? How do you instill this sense of responsibility in everyone? We believe that leadership has an essential role to play, backed by strong support from a progressive HR team. Companies out ahead of this trend are actively increasing diversity at senior levels and helping those leaders become confident role models. Their people feel more comfortable with diversity, identify with more of their leaders, and gain confidence as a result.
Trendsetters are also working to demystify the subject and demonstrate that it’s not that complicated. Fundamentally, celebrating diversity and being inclusive means giving everyone a seat at the table – giving them a voice and safe space to use it. That’s where the conversation begins – when people open up and share their experiences and others can finally start to understand and identify with those experiences. When we all understand what difference is, then we all win.
The engine of our business is a truly diverse team of collegues from all corners of the world.
Companies can lead on so many levels to get there. Training programs and to raise awareness and education staff are a must. Accountability and transparency should also be high priorities. Making leaders accountable and leveraging data ensures progress and keeps us on track. Leaders must be good role models who bring people together and give everyone the respect and dignity they deserve.
The private sector can also speak up and speak out on diversity and inclusion. We can tell the world that the more diverse we are the better we are. This can send a powerful message and encourage others to speak out. For example, we employ 170 nationalities in Germany alone and we want people to know this. One of our bottom lines is to be an employer of choice and a great place to work for allname=a great place;topic=accountability transparency regardless of trends in logistics.
Above all we need to be passionate about driving change and making our workplaces – and ultimately our world – a far better space than when we found it.
The rise of digital has made the customer experience a central trend in all industries. In our experience (pun intended), it can be game changer in today’s competitive environment. That’s because there are multiple dimensions to the customer experience. Expectations are blurring and demands are shifting. The winners are going to be the ones who go beyond products and services, think bigger than each individual interaction, and focus on outcomes and the whole relationship.
So how is this logistics trend playing out? Delivering a positive experience is about putting the customer first. That’s nothing new. But now we are thinking about each step in our value chain as an essential element of our success and turning every potential touchpoint into an opportunity to make the customer happy.
Overall, the customer experience can be divided into three parts: the technical or functional, the emotional and the memorable. Today, most companies focus on the functional. If everything works properly, then the customer is happy: Place order, make payment, receive product. Done. But there’s so much more to a good outcome.
In the hospitality industry, for example, guests are happy when they find a room that is easy to access, clean, and fully functional. Adding additional comforts, like a notification that a room is ready and multiple types of pillows make the guest feel good. The best hotels make the experience memorable by working to understand each guest’s individual needs and why they are staying. This can reveal seemingly little things that can make the difference.
One early logistics trend in the e-commerce sector was to focus on only one part of the customer journey: up to the time they clicked on the buy button. Many retailers promised fast and on-time delivery before shoring up the supply chain. Post-sales and returns were often ignored. The result was a giant gap between promise and delivery and very bad customer experience.
To stay on top of this trend in logistics, the customer experience needs to be more thoughtful. It takes a lot of people behind the scenes to orchestrate truly great customer experiences that generate memorable outcomes. That means information is just as important – possibly more – than the flow of goods. Unfortunately, the information flow is often undervalued. We will always have to deal with operational issues, no matter how well-oiled the supply chain is. Information can change expectations and ensure customers are not surprised – because that’s when the gap widens, and the experience worsens.
It's important to stay connected and to stay in touch with customers, partners, and employees.
Information flow is underserved and can make a huge difference. It’s a value-added service that shippers and companies can create beyond the physical flow of goods. And information isn’t only to consume. It needs to be bidirectional. For example, giving customers the option to choose their delivery time and location. It’s a conversation with the customer – a dialogue. It’s also a two-way street internally behind the scenes. Customer service agents, logistics analysts, and marketing managers all need this information, but for different reasons and to produce different outcomes.
Another aspect of this trend in the logistics industry is the fact that B2B customers are beginning to expect the same experience as B2C customers. There are tremendous opportunities for companies to recreate B2C outcomes in B2B commerce – looking at business customers holistically and thinking about every touchpoint in their journey. In our business, for example, we’re combining technology and social collaboration to improve supply chain management. That’s because the physical infrastructure may be essential, but it’s dedicated people and clear communication that keeps all the moving parts in perpetual motion.
The pandemic has highlighted how important the experience really is. With the initial disruptions caused mainly by reduced passenger air traffic, supply chain predictability was very much on the minds of our customers. Whereas speed drove conversion before the outbreak, reliability became the driver of repeat business afterward. Customers now want to know that their shipments will arrive when expected, even if it takes a little longer. Reliability is now more important than ever before.
Our experience shows that customers want to offer that reliability and comfort. They are even willing to hand over things like post-sales services to reduce their own need to handle those issues. That’s another reason why we are going deeper to better understand what individual customers want and need – and leveraging data to be more proactive. What do we need to change in the backend to produce an experience on the front end? The best experience is a personal one – what makes sense in each particular case. For example, do we need to fully replace the product or will a spare part due – one that can be delivered in two days as opposed to a full replacement in four weeks.
These are the aspects that turn customer experience into customer outcomes – where we don’t simply measure the value of each individual touchpoint but across the entire relationship. Logistics providers who can deliver unique and positive end-customer experiences and provide good outcomes for their customers will turn this trend into a logistics game changer.
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The COVID-19 pandemic has accelerated what many call the 4th Industrial Revolution, and we are witnessing one of the greatest workplace transformations of all times. The lines between people, workplaces, and technology are blurring. But what is the impact going to be, for example, on the way businesses operate? What are the opportunities, and what are the risks?
With some 570,000 employees at Deutsche Post DHL Group, we view the future of work as a central trend in logistics. We want to understand what the short-, mid-, and long-term impact will be on our people. What’s clear is that the current crisis has shaken up the way we work – and we don’t think everything will go back to “normal” in a post-pandemic world. In the long run, we believe that there will be many benefits, but history tells us that we need to pay close attention to what will certainly be a disruptive time for our people in the short- and mid-term.
What does that mean? The World Economic Forum (WEF) estimates that automation will eliminate 85 million jobs but create 97 million new jobs by 2025. On average this appears like a net gain and therefore a good thing. But a closer look reveals that the new jobs are often not in the same fields or geographic areas. At the macro level, a key aspect of this transformation will be managing the geographic component. The public and private sectors will need to work together to retrain and upskill workers as well as connect them to where the jobs are. One well-known example of this is the Øresund Bridge, which connects Denmark and Sweden.
Automation on balance boosts economic growth and leads to greater overall prosperity. But to ensure individuals aren’t left behind, we need to manage the short-term disruption of this trend in the logistics industry. Here again, business and government must work together. For example, governments invest in education because a better educated society leads to a better economy. Education leaders need to find smart ways to prepare people for the jobs of the future. For example, monitoring patents to predict the kinds of skills that will be needed six months down the road.
jobs automation will eliminate
new jobs automation will create by 2025
Imagine a place where ideas are born, where new thinking can change the future.
But companies compete for talent, and it’s not in a company’s interest to have huge turnover, because that comes at a high cost. So, there is an incentive to retrain and upskill employees, so they remain employable for the jobs of the future. The companies that do this well will have competitive advantage. As we increasingly automate our warehouses, our people can spend more time on value-adding work that requires human intelligence and less time pushing heavy carts up and down aisles. Technology will play an important role here, as we will need better tools and better information to assess what skills will be needed for the future of work.
But training is only one aspect. Companies will also need to focus on the needs of that future workforce. We want to keep our people happy and therefore performing at their best. We want to give them the best technology work with so that they can be as productive as possible. And we need to ensure that we bring everyone with us. That means making new technology understandable, being highly transparent about what you are doing, and building trust, so people understand what you’re doing with their data and where the company is headed.
Right now, every business needs a strategy for transforming to a hybrid model that looks at both inputs and outputs – and a management evaluation system that does the same. You can’t monitor workers because this increases stress. Instead, companies out in front of this logistics trend will look to hire trustworthy people and create management evaluation systems that measure outputs and makes it easier to work remotely.
Economist and author, Carl Frey, who spoke at the DHL Logistics and Supply Chain Summit on the future of work, says, “If you put one hand in the freezer and one hand on the stove, you should be quite comfortable on average. But we know from experience that that is not necessarily the case.”
The pandemic has added a roadblock on the path to the UN’s Sustainable Development goals. With less than a decade to go to reach these targets by 2030, putting the world back on a path of sustainable, equitable, and inclusive growth will require more than a global recovery. Looking at this trend and its impact on the logistics industry, we see a need for a complete reset of social and economic systems. But is this realistic? And is sustainable growth at odds with economic growth?
Depending on your age, you might recall a time when sustainability was about saving the rain forests. Deforestation remains a critical aspect of climate protection, but today sustainability – at least for business – is about the environment, social responsibility, and good governance (ESG). We want to leave a planet to our children that is healthy, safe, and inclusive. And we believe it’s our duty to be role models when it comes to this trend in the logistics industry.
No one wants a crisis, and we can all see very clearly that climate change is going to cause another one if we don’t do something about it. While companies pay more attention to sustainability, the pandemic has pushed it right up the list of priorities. People are making a difference, with customers, consumers, and employees driving it forward.
Sustainability is certainly a powerful logistics trend, but it is important to look beyond transportation when building sustainable supply chains. For example, transportation is less than 10% of HP’s footprint, says Volker Schmitz, Global Head of Markets Supply Chain Operations at DHP Deutschland GmbH. And the company’s supply chains are responsible for about half of the company’s carbon emissions. The product lifecycle is the other half. That’s why we’re seeing movement toward recycling and repurposing – rethinking R&D to focus on recycled resources and how products or parts can be reused. And there is so much we can do right now. We could reduce carbon emissions by two-thirds with today’s technology. We just need to roll it out and scale it up. That’s what’s going to make an impact.
It is our responsibility to guide the logistics industry toward a sustainable future.
The most successful companies are “walking the talk” as we speak – they’ve done their homework and their management boards are, well, on board. Sustainable business has to start with governance – with the board as a role model. The best leaders reinsure the strategic interest in sustainability and demonstrate that sustainability is a business opportunity that can deliver competitive edge. They demonstrate that sustainability is a strategy and not just a corporate ESG program or a fleeting trend in logistics, taking the carrot approach with education and awareness building.
The social aspect of sustainability is now more important than ever. The latest addition to the workforce – Gen Z – are much more racially and ethnically diverse than previous generations. They are digital natives and on track to be the most well-educated generation yet. Young people are educating business on diversity, so it shouldn’t come a surprise that companies are empowering their employees to help make a social impact. Here again, leadership matters. People have the greatest potential to drive social change – if they think it’s important, they will make it happen. The most forward-looking companies recognized this long ago. They are enabling their people to inspire their colleagues as sustainability ambassadors.
For this trend in the logistics industry, making a social impact also means thinking across the entire supply chain: not just my suppliers, but their suppliers and their suppliers. Human rights are a key aspect, with respect for diversity an absolute must. Many people talk about a culture of inclusion, but logistics companies must really live it and remember that actions speak louder than words.
One important action many companies are taking is to embed responsible business practices deeply into their organizations. This takes a lot of work, especially in big, multinational companies. With the right governance structure in place, companies can build teams, collaborate across departments and with suppliers, and ensure sales teams are communicating with customers, who are demanding more sustainable business practices. Job seekers are keen on good governance, too. Especially young people, who increasingly check whether a company is sustainable before applying for jobs.
The trend toward sustainability both in the logistics industry and beyond is that it should involve environmental protection, social responsibility, and good corporate governance. But – and this is key – it must be much more than an ESG program. This logistics trend is, in fact, much more than a trend. It’s about ensuring a future for us and the generations to come. Companies that recognize it as an opportunity will be the ones leading the way into the sustainable future.
These mega trends in logistics and beyond are making it a truly an exciting time in the industry. Taken together, we believe this time is an ‘Era of Logistics’ that offers infinite possibilities to create outcomes that inspire and improve the way we work and live. It’s truly a time of human excellence.
Companies have a huge responsibility but also an enormous opportunity to make an extraordinary impact that will both protect the planet and make it a better place for all. People have a powerful role to play. staying ahead of these trends in logistics. Together, we can drive the industry toward sustainable supply chains and economic growth, diverse and inclusive workplaces, and value-based organizations.
Published: December 2021