Recent upheavals socially and economically have dramatically changed global trade. By 2027, these current trends will have further reshaped how we do business across the globe. In this article, we’ll examine some important market segments, regional changes, and then the processes and technologies driving the changes in the global logistics services market.
Important Market Segments
One of the key transformations that will occur in the future will be based on different market segments of global logistics services. Depending on the logistics model (1PL, 2PL, 3PL, or 4PL), different changes can occur. 4PL providers manage entire activities involved in supply chains, like storage, processes, procurement, and distribution. Because of that, their role will only grow as smaller firms rely on 4PL to ensure products can be delivered in a timely fashion and overcome logistical difficulties of scale. Deployment models such as roadways, airways, waterways, and railways will all also transform as new technologies, and consumer demands revolutionize these industries.
End-use verticals, another important market segment, will also see differing trends depending on the area involved. This means that industrial & manufacturing verticals may see different changes from retail, healthcare, oil and gas, and others.
Regional Changes
Another important change that will occur in the future is the transformation of different regions. Presently, the fastest-growing market is the Asia Pacific. This trend is only expected to accelerate as more consumers in the region acquire higher levels of wealth. This means emerging countries like China, India, Japan, Malaysia, and Indonesia will see huge growth in the coming years.
In Europe, supply chain stability is currently under question due to increased tensions between western nations and Russia as the Russian-Ukraine war drags on. In the long run, the war’s outcome could determine whether Russia further alienates itself from Europe and continues to orient itself towards Asia and the East.
North America remains the largest market and continues to flourish. For example, the Port of Corpus Christi, Texas, set new tonnage and revenue records in the first four months of 2022. Despite growth opportunities in North America, other opportunities will continue to grow in LAMEA, with a particular emphasis on growth in Latin America and select African countries like Nigeria and South Africa. The growing tech industry in Argentina and Brazil also shows great signs of potential for the logistics services market.
Processes for Achieving Global Logistics Changes
Just how will these changes in regions and markets play out? New processes and technologies will continue to be adopted and invented to facilitate greater logistics growth. Next, we’ll look at some of the ways these changes will occur.
Omnichannel Shipping
One major disruption you can expect to see soon is the continued growth of omnichannel shipping. Omnichannel shipping differs from traditional shipping because it facilitates the transfer of goods across channels. This means that rather than just sending goods for cross-country transfer, a single warehouse may service returns, outbound packages, and global logistics.
The growth and expansion of omnichannel shipping can be attributed to the so-called “Amazon Effect,” whereby traditional retailers have begun offering more omnichannel touchpoints to improve customer loyalty. In the end, omnichannel is all about providing seamless shopping experiences, whether digitally or in-store.
Globalized Compliance
Globalization is not expected to disappear. In fact, more regulations and laws will be expanded to facilitate global trade. However, as a part of this expansion, process logistics suppliers must be aware of changes that impact their various markets. This includes newer compliance requirements whereby companies will need to audit data and supply trails for their data and customer data throughout the logistics process. In the end, compliance and shipping are inextricably linked, and companies will need to stay up to date to stay competitive.
Logistics Threats
Another key area that will disrupt global logistics marks is threats to the global logistics and supply chains. Many of these threats can be due to bad actors, but also environmental threats and social upheaval. Supply chain disruptions due to these factors are key.
The Great Resignation
The Great Resignation, so-called because unprecedented numbers of workers uprooted their work lives and left for other jobs, has dramatically reshaped the social fabric of the global economy. Demands for higher wages, better working conditions, and more remote working opportunities have been drivers of this social phenomenon. As a result, logistics companies have had to respond and adapt as worker shortages have appeared.
Hackers / Ransomware
In the past year, ransomware attacks have increased by one-third. These attacks have often focused on supply chain style attacks, which are particularly important for logistics servicing companies. In a supply chain attack, secondary targets that supply primary targets are often the first step. Then, once the secondary target has been breached, hackers laterally move through their network until they can acquire credentials for the primary target.
Logistics companies at the 3PL and 4PL levels are particularly at risk because they may serve a wide range of potential primary targets like healthcare providers, manufacturers, and government entities. To protect against these risks, logistics firms need to continue investing and reinvesting in cybersecurity.
Covid-19 and Public Health Issues
Although the Covid-19 pandemic began in 2020, the global economy is still reeling from its impacts, which will continue for years. Even today, markets are disrupted because of public health concerns in China. Businesses will need to find ways to adjust and eliminate costs to adapt. For example, medical businesses can save $200 monthly by automating invoices and eliminating paper. These types of public health-related logistics disruptions will thus enable new opportunities to appear for emerging markets and other areas.
Key Technologies Driving Global Logistics
Several key technologies that have emerged will continue to play a critical role in how global supply chains operate and continue to evolve in the coming years.
RFID
RFID is expected to continue to grow in importance. Although the technology has failed to yield significant changes since it first appeared years ago, recent advances have the potential to assist in route optimization and produce real-time tracking of goods. Effective implementation of RFID technologies will be key to supporting tagging trucks, pallets, and inventory to provide insights down and across the supply chain.
Cloud
Cloud technologies are also significant because they enable logistics companies to operate remotely across their broad logistics networks. Continuing to adopt cloud-based technologies and integrating them into existing business models will assist in the further evolution of logistics markets.
Sustainability
Finally, sustainability will be a key issue for supply chains and global logistics in the near future. Many global manufacturers are including sustainability in their business plans. In many areas, such as the EU, sustainability also significantly overlaps with compliance and regulatory requirements. This means stricter regulations on emissions from logistics vehicles, monitoring of cargo ship pollution, and other issues. Sustainability touches all levels of organizations and can be as discreet as an office policy to go paperless or as broad as setting green investment requirements for larger multi-national companies.
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