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The day after tomorrow

Which major forces will reshape logistics over the next decade and beyond? New research brings the future into focus.

Logistics is set to undergo the biggest transformation in its history. That’s the headline finding of a survey of more than 10,000 logistics professionals and technology experts. The work, which was conducted by DHL Trend Research, highlights 28 separate trends that are reshaping the sector, grouping them into four primary categories: ­customer centricity, sustainability, technology and people.

The latest DHL Logistics Trend Radar report is the fourth in a series that has been running since 2013. The research is developed through the analysis of mega- and microtrends as well as direct input from partners, including research institutes, tech players, startups and customers. Most of the insights are collected firsthand from over 10,000 logistics professionals and technology experts who visit the DHL Innovation Centers each year. The findings are then aggregated and reflected on the Logistics Trend Radar, which acts as a dynamic and strategic foresight tool that tracks the evolution of trends spotted in earlier editions and identifies promising new trends with every update.

“Our Logistics Trend Radar acts as a roadmap for innovation, helping to structure and catalyze further industry-leading research and projects together with our customers and partners,” says Matthias Heutger, Senior Vice President, Global Head of Innovation & Commercial Development, DHL. “In this edition, we focus strongly on the digital revolution happening in the industry and its impact across four key elements defining the future of logistics.”

The customer at the center

The first of those elements is customer centricity. Across sectors, the report notes, customers are demanding a faster and more convenient logistics experience. In large part, that’s due to the ­ever-increasing fraction of goods that are purchased online. E-commerce makes the speed and accuracy of an organization’s ­logistics processes very obvious to the customer: Many of them happen in the time between the order and receipt of goods.

The expansion of e-commerce into new areas is adding extra layers of logistics complexity. Business customers are demanding the same service levels as consumers, as more B2B categories move online. Customers are purchasing more time and temperature-sensitive goods over the internet. This “fresh chain” will require new innovations in the packaging, storage and delivery of goods such as groceries and pharmaceuticals. And there is still the opportunity to remove the remaining inconveniences from online shopping, such as the need to log in and order goods or wait around for them to arrive. Another key area for innovation will be the integration of last-mile logistics services with smart homes and connected vehicles, for example by granting temporary access to trusted couriers so packages can be securely deposited while the owner is away.

Logistics cleans up

The second major trend is sustainability, which the report’s authors say will become a mandate to operate in the logistics industry. Governments, cities and solution providers are already committing to sweeping agreements to cut down on carbon dioxide emissions and waste. DHL, for example, has committed to becoming emissions-free by 2050. Green energy logistics – the electrification of logistics fleets and facilities – provides huge potential for logistics to become more environmentally friendly. Smart containerization in transportation will also be important in developing environmentally-friendly formats for delivery in congested cities.

The digital dividend

Then there’s technology. The report notes that a number of significant technologies are now reaching a tipping point: Their price has come down and performance has risen to the point where they are ready for large-scale application in logistics and elsewhere. That’s the situation today for artificial intelligence technologies, as well as for networks of low-cost sensors and communications networks that underpin the internet of things. A key enabling technology for logistics applications is the rollout of next-generation wireless networks that can significantly increase the economies and value derived from connectivity in the supply chain. Another trend highlighted by the report is blockchain: The secure distributed database technology that underpins cryptocurrencies such as bitcoin. Here, the authors warn, there has been a lot of hype and promise, but achieving industry buy-in may prove a significant hurdle to adoption.

People still matter

Finally, there are people. Even though robotics and automation will make a significant impact in logistics in the coming years, people will remain at the heart of the sector. The authors suggest that highly repetitive and physically intensive tasks will be aided by technology, enabling people to do more meaningful tasks that require management, analysis and innovation. That will force companies to rethink their workforce policies, finding ways to attract, develop and retain people with new skills, and to support the existing, aging logistics workforce.

While the latest Trend Radar report paints an exhilarating picture of technology-driven innovation and transformation, the authors are careful to point out that predictions are always risky. “We know from experience that the impact of some trends will not materialize. Innovation does not follow a linear path – the success of some trends will rely on culture and capabilities as much it does on breakthrough technologies and business acumen,” says Markus Kückelhaus, Vice President Innovation & Trend Research, DHL Customer Solutions & Innovation. “That’s why we need to actively engage firsthand on driving the development of these trends.” — Jonathan Ward

Published: September 2018

Images: DHL