View to a digital future

Made in the shadow of a global pandemic, the forecasts in this year’s DHL Logistics Trend Radar reveal the accelerated adoption of new technologies, as well as industry resilience and sustainability.

What humanity tried for years, a virus accomplished in several months,” say Ben Gesing and Jordan Toy, co-authors of the DHL Logistics Trend Radar, which outlines the future trends in logistics amid a transformative past and the upcoming decade. They are referring to the prevalence of home working since the appearance of COVID-19, but this statement also sums up the accelerated interest in embracing new technologies, automation and tools for digital work in the logistics industries.

The 2020 report is the fifth edition of DHL’s flagship foresight tool, published every two years, which surveys the technology, social and business trends that will affect logistics in the upcoming decade. “It’s a big year,” says Gesing, and the special circumstances of the pandemic have meant thinking “in agile mode.”

Changes and challenges

The report begins with a look back at innovations that have defined the industry in the millennium so far – among them e-commerce, technology megaplatforms, robotics and smartphones. As in the 20th century, when most of the tectonic technological shifts – electricity and the internal combustion engine, for example – occurred in its earliest decades, the pace of breakthroughs may now be slowing down, but their serious adoption in supply chains is still constantly growing in breadth and depth. So while the technological context is now a given, with e-commerce completely changing the way people shop and experience logistics, its applications continue to expand rapidly.

The past decade has also seen wave after wave of disruptive technology: artificial intelligence, 5G, the huge increase in connectivity (almost 5 billion people now have internet access), augmented and virtual reality, the internet of things, the possibility of autonomous cars – each of which requires fresh adaptation. 

All of this is taking place against a backdrop of greater political and economic turmoil. As global supply chains become increasingly volatile and complex, and the world economy is hit by the unanticipated impact of the pandemic, the prevalence of trade wars, national interests and social unrest is increasing. Throughout all of this, the role of logistics in keeping the world working and sustaining modern life has never been more relevant to society.

5 billion

The number of people who now have internet access

99 percent

The accuracy with which the robotic arm software used by DHL can pick objects

With the turning point of the COVID-19 crisis, some evolving practices have accelerated and come to the forefront, such as home deliveries, a broader range of online interaction and, perhaps most notably, working from home. Shocks in demand and supply have led to short-term use of 3D printing (to make personal protective equipment, for example) and of last-mile delivery by robots, something which was difficult in the crowded city streets of pre-COVID times.

In the face of economic instability and obstacles to trade, building supply chains that are more durable and sustainable is crucial. Suppliers and distributors will have to find ways to diversify further, while some goods may have to be procured and produced in multiple locations, potentially even closer to home.

As Gesing points out, the COVID-19 crisis may be only the first of several pandemics, and one of its lessons has been that those who don’t embrace digital technology will be hardest hit.

A futureproof tomorrow

As to sustainability, three years ago DHL started on its journey to becoming a zero-emissions organization by 2050; now there are many other companies, even energy companies, who say they want to do the same. After the recent rare spell of restricted human movement due to the virus, we’ve been given stirring glimpses of the planet’s resilience, with cleaner air and clearer views (the Himalayas suddenly visible from Punjab, for example), and wildlife venturing back into cities. It is yet to be seen whether the economic recovery will be as green as we might wish, but environmental issues are certainly going to be of greater interest to more customers than ever before.

The elimination of plastics, which has great relevance to the packaging and delivery of goods, will also come to the forefront.

Technological developments are bound to be amplified, too. For example, this year DHL will deploy a fleet of 1,000 robots from Locus Robotics, while picking and sorting will be assisted by the robotic arm software developed by Covariant. With an accuracy rate of 99% – a human level of dexterity – the software will help maximize order fulfillment, especially during seasonal and unexpected volume peaks.

But “technology is the easy part” for the industry, according to Gesing, and successful digital transformation is still dependent on the human factor. “The hardest part is getting people accustomed to using these things.”

Around 550,000 people work at DHL and, he says, they need to feel comfortable with cameras assisting their decision-making or with using an iPad to control a fleet of robots rather than carrying out a series of repetitive tasks themselves. Future employees and leaders will need continual upskilling in order to use the sophisticated software and equipment now at their disposal.

Above all, to operate successfully, logistics depends on trust, a connection that can be supported by technology, but ultimately only made between people.

The 2020 edition of the DHL Logistics Trend Radar is based on the philosophy of staying close to customers, operations and technology. The insights in the report do not rely solely on traditional research methodologies, but more importantly on the contribution of scores of industry experts and DHL leaders, hundreds of employees at relevant startups and thousands of visitors to DHL Innovation Centers each year. — GP Newington

Published: October 2020

Image: DHL