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LEAD Innovation Blog

Read our latest articles on innovation management and innovation in a wide range of industries.

Date: 17-May-2019
Posted by: Daniel ZAPFL
Category: logistics

These 9 trends are swirling logistics in a mess

 

New technologies, sophisticated customer needs and the pressure to use resources more sparingly characterize the logistics sector. Overcoming the last mile plays a key role here. In this blog post, you can read about the trends that are shaping logistics today and in the near future.

 

The logisticians are undoubtedly among the globalization winners. The rise in the global flow of goods is making the order books in the logistics sector thicker and thicker. This can be seen from a look at the sales development that the sector was able to record in Germany between 1995 and 2019. In these years, sales rose more or less continuously from 123 billion euros to 279 billion euros. Only really deep cuts, such as the financial crisis triggered by the Lehman bankruptcy in 2008, temporarily disrupted this upward trend - but not sustainably.

From today's perspective, it is very likely that the international division of labour will continue to increase, as the majority will benefit from lower prices and greater choice. The demand for transport services therefore appears to continue to grow in the future. Despite this good outlook, the logistics sector is facing a challenging upheaval. In its current Logistics Trend Radar, DHL names the four central factors of the industry:

 

1) Client orientation

Online retailing will continue to grow and logisticians will need to find more efficient ways to get over the last mile. In addition, retailers are trying to meet increased customer demands and sell their goods through a growing variety of sales channels (omnichanneling).

 

2) Sustainability:

It will not be possible to achieve the climate targets set without the logistics industry. The balancing act between higher transport performance and lower emissions is both necessary and difficult to achieve.

 

3) New Technologies

Digitalization with key technologies such as the Internet of Things, blockchain or artificial intelligence opens up undreamt-of possibilities for logistics companies to make transport safer, more efficient and thus more sustainable.

 

4) The human

According to the Logistic Radar trend, people will remain the heart of logistics in the future, despite increasing digitalization and automation. However, his tasks will change dramatically and physically demanding tasks will increasingly be performed by machines.

 

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These four factors determine a multitude of trends that the logistics industry already has to deal with today. The 9 most important of these are:

 

1) Minimize unsuccessful delivery attempts

If the first delivery attempt fails, the recipient is disappointed and the logistician incurs further costs. He is therefore constantly tinkering to further increase the delivery rate. Delivery to the recipient's trunk is one way of delivering the parcel, even if no one can be found. Amazon has been delivering to the trunk of customer cars since 2018. In 2019, VW plans to offer this delivery option together with DHL. With mobile parcel letterboxes, couriers can also deliver their shipments without the recipient having to be at home. The Austrian Post AG offers such a solution with Flexibox. Smart door locks such as Amazon Key, on the other hand, give the deliverer access to the house or garage. Amazon also offers the so-called Cloud Cam so that the recipient can monitor the deliverer's activities.

 

2) Machinery overcomes the last mile

Autonomous vehicles can help logistics companies to reduce their costs: Instead of human delivery staff, machines are used: Austrian Post AG tested autonomous parcel delivery with a special e-vehicle in downtown Graz. In the "Heidi" project, Swiss Post is using drones to transport deliveries to remote locations. To date, commercial operation of delivery drones has only taken place in Australia. No - not from Amazon, but from Google's sister company Wing.

 

3) Survey of customers avoids returns

According to a survey by the German industry association Bitkom, every eighth online sale is reversed. Individual retailers such as Zalando suffer from a return rate of 50 percent. Online customers send back so many items of clothing or shoes because the size simply doesn't fit. 3D scanners are supposed to solve this problem: The customer misses himself and gets hints in the online shop which pieces actually fit him.

 

4) Alternative drives for trucks reduce CO2 footprint

While passenger cars and smaller delivery vans with alternative drive systems can already be found on the roads, heavier trucks are usually still fired by diesel. On the one hand, logistics experts and dealers fear that conventional delivery vans could soon be banned from driving in urban areas and are therefore calling for sustainable alternatives. On the other hand, new market players such as Tesla are also taking up the issue of electric trucks. The established market players such as Daimler, MAN and Volvo therefore want to bring series-ready electric trucks onto the roads in the next few years.

 

5) Logistics exchanges and freight brokers make better use of resources

Empty runs are both economically and ecologically pointless. Logistics exchanges and freight brokers help to optimise the utilisation of vehicles of all kinds: For example, if a manufacturer's vehicle transports Tyrolean bacon to Vienna, it can return with a load of Sachertorten instead of empty. The stock exchanges on which free transport capacities are traded, such as Timocom or ClickaPoint, which also provides carpooling opportunities, have existed for several years. What is new is that Amazon now also wants to get involved in this global brokerage business. The Group's freight network consists primarily of third-party providers. With the help of the brokerage exchange freigth.amazon.com, the US group now wants to second exploit this network.

 

6) Autonomous transport vehicles master intralogistics

The autonomous driving hasn't really arrived on the road yet. In the warehouses, however, driverless transport systems (AGVs) are almost part of everyday life. Such systems were already in use in the USA 50 years ago. AGVs are valuable wherever the storage and retrieval of general cargo is involved. Amazon wants to use FTS to improve the effectiveness of its own employees by a factor of four: Robots transport the goods and the appropriate packaging from the warehouse to the responsible employee, who then prepares the order for dispatch. The trend in this area is away from the programmed to the trained AGV. Through deep learning and AI, FTSs can then not only move in isolated areas as before, but also in unmonitored zones and foreign terrain.

 

7) Better ergonomics and digital helpers for warehouse workers

According to a study, storage and transportation in intralogistics is still one of the most accident-prone activities. At the same time, global competition increases the pressure to perform, while human performance is limited. Of course, the physically strenuous activities in the warehouse are increasingly the responsibility of machines (see point 6). But even in the future, people will not disappear from the warehouses. The aim is rather to multiply their manpower. Augmented reality is a technology that makes warehouse employees work more effectively. One possible application is Pick-by-Vision. A picker receives context-related information about a specific article via data glasses: The system informs the employee, for example, about the location of the item in question and the shortest route to it.

 

8) 3D Printing Reorganizes Supply Chains

3D printing allows you to produce parts yourself instead of having them delivered to you. All that is required is a construction plan. The new technology greatly increases the speed of the supply chain, reduces inventory costs and offers many other benefits. For example, a product can also be manufactured directly in the transport vehicle during delivery. The logistics service provider DB Schenker already offers extensive 3D printing services: Via an online portal, customers can upload 3D templates, select materials and colours, call up prices, order the print and have it delivered. Currently, devices made of stainless steel, robot gripper fingers made of plastic or individual packaging material can be printed.

 

9) Big Data paves the way to Anticipatory Logistics

By evaluating large amounts of data (big data), it is possible to predict the occurrence of events with a certain probability. Knowing the future is, of course, a competitive advantage and logisticians also take advantage of it. They analyze customer behavior in the past and use this information to deliver goods to distribution warehouses that customers in this region have not yet ordered. Thanks to this "anticipatory logistics", the goods reach the recipient even faster. Amazon has already filed a patent for Anticipatory Shipping in 2014.

 

Conclusion: These 9 trends are swirling logistics in a mess

The demand for transport services will continue to grow in the future. Only an economic caesura could stop this development. But logistics providers will not only have more to do in the future - they will also have to deliver their services differently. Increased customer expectations and the pressure to use resources more sparingly in general are calling many well-established processes into question. Digitization, with its many new tools, can help the industry meet these two challenges. Above all, technological possibilities will change the role of people in logistics.

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Daniel ZAPFL

Born in Graz, Austria. After positions as project manager & head of innovation of the project management at LEAD Innovation, Daniel Zapfl has been responsible for the success of the innovation projects of our innovation partners since January 2018.

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