One of the key secrets to running a successful business is keeping your finger on the pulse of innovation in your field. The logistics industry is no exception, and that is why in this article we explore the most promising trending technologies in logistics that are shaping its future.
Which technologies can help business owners make more data-driven decisions? How influential is automation in the logistics industry? Which trends are crucial to follow right now? And how much space would logistics technologies leave for manual work?
Mind Studios has worked on multiple logistics projects, including an on-demand delivery app James Butler, a luxury delivery service Pampr, and a resources management system for a delivery company. Therefore, we provide the answers to the above-mentioned questions not just based on research but on our own experience.
Why is it important to follow logistics tech trends?
The answer to the question about following logistics tech tendencies is simple. If a business wants to do more than just stay afloat, then it has to be one step ahead of its competitors and quickly adapt to the ever-changing rules of its focus industry.
There is a reason why the global market for digital transformation spending in logistics is expected to reach a size of $75.5 billion by 2026. E-commerce continues to grow, supply chains are getting more complex, and customer expectations are growing higher, making businesses even more vulnerable when disruptions happen.
So, let’s go over the most significant benefits of following the logistics technology trends.
Meeting customers’ needs
Each year, businesses involved in logistics get better at streamlining their operations. This naturally leads to customers’ expectations growing.
Today, both B2B and B2C customers expect fast delivery, easy tracking functionality, security and transparency throughout the whole logistics process, and more. And on top of that, it would be great if you were sustainable: it’s a matter of common decency for businesses today.
Following and implementing logistics technology trends is exactly what can help businesses meet those countless expectations over a short period of time. For instance, automation of logistics processes improves order processing speed and accuracy, and integrating blockchain technology enhances security. As a result, it becomes easier to achieve customer loyalty.
Nearly every technology for the logistics sector helps businesses cut costs in the long run. For instance, IoT devices for tracking shipments reduce the number of failed orders, route optimization assists with reducing expenses spent on fuel, and warehouse automation cuts labor costs.
However, it’s important to note that the return on investment timeframe can differ drastically depending on the technology. For example, a return on route optimization software investment is visible within a year of implementation, while the payback period for investments in robotics can be three or even more years.
Solving logistics-related challenges
Logistics is an extremely complex field, not least because of trade globalization and the growing demand for goods to be distributed across multiple locations. Therefore, naturally, new technologies are constantly being developed and improved to meet this demand and solve various challenges that come with logistics processes.
For instance, logistics technology helps with speeding up the delivery time, shipping products of different sizes and complexity to distant locations, optimizing the use of resources, and so on.
Additionally, keeping up with new technology in logistics also means keeping up with competitors — and, therefore, reducing the risk of losing customers to them.
Streamlining day-to-day operations
Once again, the complex nature of logistics means that it covers numerous processes, including management of transportation, warehouse, fleet, and supply chain.
In recent years, logistics industry trends have been aimed at making all the systems involved work in sync, thus improving efficiency at every step of the way. For example, technologies like cloud computing and IoT help achieve exactly that.
We elaborate on how this works with specific technologies in the next section. However, there is one more thing we want to highlight about the benefits of embracing the logistics tech trends.
If you are even remotely involved in logistics processes, chances are you know how advanced logistics service providers like DHL and FedEx are in terms of technology. However, logistics companies are not the only ones integrating the latest technologies into their operations. One of the vivid examples of this is Henkel.
Recently, the company has been investing in tech innovations aimed at enhancing efficiency, implementing major logistics changes, and introducing digital automation. One of the results of the initiative is Henkel’s logistics hub in Bowling Green, Kentucky, which has been significantly transformed after the company invested $70 million in it.
Digitalization and adoption of emerging supply chain and logistics technology allowed Henkel to optimize warehouse structure, streamline business operations, speed up data exchange, and increase overall supply chain resources efficiency. What is more, it has made the company ready to respond to market changes and challenges in real time.
Henkel named this location the company’s most technologically advanced logistics facility in North America. As of 2022, this 1.4 million-square-foot hub could store 200,000 pallets (a 56% increase) and allow up to 1,000 trucks to go through the hub daily (an 80% increase).
The company doesn’t plan to stop there. They are now looking for ways to invest in the digitalization of R&D, e-commerce capabilities expansion, and adopting a more sustainable approach to packaging.
Our point is, logistics might not be the primary focus of your business. But as long as part of your operations has to do with the supply chain, following and adopting new logistics technologies can give you a huge competitive advantage.
Top 8 technology trends in logistics to watch in 2023 and beyond
Logistics is an extremely dynamic industry that is constantly adapting to new challenges. Nonetheless, it is possible to predict which tech trends will be the most influential during the next years — and thus are worth investing in if your business deals with logistics processes. Here, we’ve collected the most crucial of them.
Robotics and automation
[Source: Boston Dynamics]
Automation in logistics is viewed as one of the most effective ways to cut expenses on manual labor, improve accuracy, eliminate delays and errors, and thus enhance customer experience.
With automation technology, companies can optimize nearly every process, including storage of goods, order processing, inventory management, packaging, labeling, and transportation.
Investing in robots is also becoming increasingly popular, especially when it comes to warehouse operations. For instance, warehouses now often use Handle, a mobile robot developed by Boston Dynamics. It has a manipulator arm that allows the robot to unload trucks, move heavy boxes around the warehouse, and do other tasks, even if they involve moving in tight spaces.
Not only does it increase efficiency and productivity, but also solves the problem of a constantly decreasing number of humans willing to work in warehouses. After all, it makes sense to delegate dangerous and backbreaking tasks to robots instead of humans.
You probably know that big data is an enormous amount of data that comes from different sources. In logistics, it is generated throughout all steps of the supply chain, including order processing, transportation, warehouse management, and so on. So, what’s all this data used for?
By analyzing data on their processes, companies gain valuable insights and can make better decisions regarding their operations. For example, in combination with smart hardware, big data is widely used for demand forecasting, route optimization, risk management, increasing supply chain visibility, finding ways to reduce costs, etc.
Internet of Things (IoT)
Naturally, all that data has to come from somewhere, and that’s why in addition to software solutions companies also need to invest in smart hardware.
IoT in logistics involves connected devices that collect data on various supply chain processes. For instance, IoT sensors are often attached to goods and vehicles to track their location in real time. This allows companies (and their customers) to monitor shipments and get accurate forecasts about arrival times. But that’s not all.
IoT sensors and other devices are used for storage conditions monitoring, predictive maintenance of vehicles and equipment, inventory management in warehouses, and more. For instance, without IoT sensors that monitor storage conditions, it would be nearly impossible to safely transport temperature-sensitive products like pharmaceuticals.
Blockchain is a secure database shared across a network of participants, where up-to-date information is available to all participants at the same time, as defined by McKinsey. In other words, it is a technology that allows safe sharing of information. And in logistics, blockchain is used to increase supply chain transparency, traceability, and efficiency.
Supply chain involves sharing information between multiple networks, and blockchain technology enables companies to do it without the risk of data being compromised. To give you a few examples, blockchain technology in logistics can be applied to shipment tracking, secure bills management, and authenticity verification.
For instance, Maersk, a logistics company, uses blockchain to control cargo movement across international borders. And since this technology can help monitor products at any level, it is used by companies like Walmart and Unilever to track where the products they sell come from.
Artificial intelligence and machine learning
In logistics, AI and ML are used to lead automation processes and help businesses enhance their operations, detect problems early on, and assist with solving them. For instance, in warehouses, AI can be used to prevent supply shortages and surplus issues, as well as for predictive maintenance of robots, machines, and equipment.
The technology is also becoming increasingly popular for communication with customers through AI-powered chatbots.
Keep in mind that AI is a powerful tool when used in combination with other technologies like big data, cloud systems, analytics tools, etc.
This technology is a new way of storing, accessing, and sharing data and applications. In logistics, cloud computing is used to streamline supply chain operations through different cloud-based software applications.
Cloud computing enables businesses to respond to market changes and scale without making costly investments in hardware. Such solutions also allow real-time collaboration between different parties and participants of the supply chain processes, from stakeholders to carriers and end customers.
In addition to real-time access to data, cloud-based logistics solutions often have various security features like data encryption, which helps protect sensitive information from cyber threats.
To put it simply, a digital twin is a program that uses real-world data to create a virtual model (simulation) able to predict how its real twin will perform. This program can simulate not just physical devices but systems and processes as well.
Digital twins are not a separate technology but rather a combination of different technologies like IoT, VR, data analytics, AI and ML.
In logistics, digital twins help businesses simulate various scenarios and test changes to operations before actually implementing them. For instance, CognitiveFlow by Cognition Factory is an AI-based digital twin solution used to plan, design, and manage mobile robots and material handling systems in warehouses and smart factories.
While it’s not just one specific technology per se, we have to mention it in this article. The logistics and transport sector contributes over a third of global CO2 emissions, and that is why responsible businesses are now trying to come together and pursue more sustainable ways of operating.
Switching to electric vehicles for last-mile delivery, trying more sustainable and renewable types of fuel like bio-LNG, efficient route planning, and warehouse operations optimization are just a few of the ways to do it today.
Many logistics companies are already implementing green strategies. For example, following its Sustainability Roadmap, Deutsche Post DHL Group allocated $313 million toward the electrification of its fleet in 2022.
In case you have any questions regarding trends in logistics and technology to match your business needs — feel free to request a free consultation with our business development team.
The forecasts in logistics technologies for the near future
In December 2022, DHL published an article, quoting Dr. Klaus Dohrmann, Vice President, Head of Innovation and Trend Research at DHL Customer Solutions and Innovation:
“As one consequence of the pandemic, the priority for the logistics industry is really to get better agility within the supply chain in order to ensure supply chain resilience.”
You might wonder why experts still find it important to mention the pandemic. It’s simple: while the crisis is over, the influence it had on the logistics industry has remained. 2020 highlighted where the sector is vulnerable and urged businesses to look for ways to build resilience. After all, who knows what crises lie ahead of us?
Naturally, emerging technologies, including ones related to the logistics industry, are one of the keys to developing that resilience and preparing businesses for future challenges. But how deeply will these technologies be embedded into the industry?
Let’s take a look at some of Gartner’s predictions about the development of logistics and supply chain technologies:
- By 2026, around 75% of large enterprises will have integrated some form of intralogistics smart robots into their warehouse workflow
- Through 2025, 25% of decisions related to the supply chain will be made through intelligent edge ecosystems
- By 2026, over 75% of commercial supply chain management application vendors will offer advanced analytics, artificial intelligence, and data science functionality
While the tendency for automating every aspect of logistics processes may be overwhelming for some, humans’ role in the industry will still be pretty significant — more than you might have expected.
In his article for Forbes, Thomas Jorgensen, president & CEO of Green Worldwide Shipping, shares his thoughts on how automation has already influenced the logistics industry, and what will happen in the future.
“Over the past 10 years, progress in the T&L industry has been all about automation. We have adopted ways to improve efficiencies that include GPS tracking of products and shipments, self-driving vehicles and even drones to monitor the movement of goods. Warehouse automation—including robots, self-driving machinery, tracking codes, and automated storage and retrieval systems—has also achieved significant efficiencies and cost savings. Enhanced software and systems help us identify better transport routes and provide improved visibility over our supply chains, leading to smarter purchasing decisions.”
At the same time, Thomas Jorgensen believes that it’s people who will drive the transportation and logistics industry, not technology. He elaborates by using green strategies implementation as an example.
According to the expert, businesses need to work closely with customers, suppliers, transporters, warehouse owners, government agencies, and more parties. Moreover, it will also require companies to invest in communication, training, and educating their employees engaged in all levels of the supply chain. Only then it would be possible to achieve sustainability across all logistics processes.
Logistics technologies implemented by Mind Studios
Logistics and transportation is one of Mind Studios’ focus industries, so over the years we’ve implemented multiple software solutions for businesses in logistics from all over the world. Here are just a few of the projects our team has worked on.
In 2022, Mind Studios got to develop Pampr, a luxury delivery service for customers vacationing on Nantucket, a popular destination in the US. Pampr service employees take on the shopping tasks and allow vacationers to simply relax and enjoy their holidays without wasting any time standing in queues.
Our team had two and a half months to build the platform, and the summer of 2022 had to be the ultimate test of how successful the idea and its realization were. Pampr has passed with flying colors, and now the owners are getting ready to expand the service to neighboring locations.
ERP system for a delivery company
One of our most recent projects is a resources management system for a delivery company that came to us with a request to digitalize some of its processes.
Our top priority here was to help the business cut costs on deliveries and make the process more transparent. As a result, our software engineers built a solution that calculates the most time- and cost-efficient delivery routes, shares data with supervisors, automates the process of odometer numbers registration, and more.
In 2019, right before the pandemic started, we developed James Butler, an on-demand delivery app for the Danish market. To be more specific, in just three months we built two applications: for the buyers and for the shoppers who delivered products from physical stores.
The project was such a success in terms of performance and investments that later on, it prompted a famous Danish electro-pop singer Medina to join the board of directors and engage in James Butler's marketing campaigns.
This Ukrainian cargo company delivers goods primarily from China to small and medium-sized European businesses. M3Cago helps its clients make direct and secure purchases, conduct procurement audits, and reduce operational costs.
When transporting orders, the company uses GPS tracking devices for order location and movement monitoring. Our team developed an app called Real Tracking for M3Cargo that processes data from those IoT devices and makes tracking functionality accessible to the company’s customers.
In 2022, Gartner stated that 61% of respondents to one of their surveys said technology is a source of competitive advantage. Mind Studios is on board with this statement.
In recent years, leading experts in the industry have been talking about building supply chain resilience and agility as the top priority for logistics. So have credible research companies and media. The logistics trends we’ve shared in this article are aimed at helping companies do just that.
Whether you’ve already decided on the technologies you want to implement or are unsure about which solutions will suit your business best, Mind Studios has got you covered. Fill in a contact form, and our team will arrange a free consultation where we’ll discuss ways to make your company resilient to any challenges that already exist or are yet to come.