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THE CHANGING FACE OF LOGISTICS: WHAT CHANGES TO EXPECT IN THE NEXT DECADE?

Anastasia Shevchuk
Business Development Manager

INTRODUCTION

Logistics has always been considered to be a conservative industry. Whilst many areas of business have already implemented digitization, the logistics industry is just starting to do it. There are still a lot of routine tasks such as copying information from an email and entering it into the system, generating and collecting invoices, typing booking information on carriers' websites, monitoring a portal, and updating records. These manual tasks are time-and labor-consuming and can result in significant inefficiencies, errors, and productivity losses for your business.

Why don't digitize them and make life easier?

Let us consider technologies enabling digitalization in logistics, automated solutions and trends.

DIGITAL TECHNOLOGIES IN LOGISTICS

Almost every day we hear about such technologies as artificial intelligence (AI), robotic process automation (RPA), and blockchain.
What solutions can they bring to the table?

1. Mistakes reduction,
2. Enhanced productivity,
3. Shipments location tracking,
4. Time and cost-efficiency.

Let us consider each digital technology in detail.

Artificial intelligence (AI)

Nowadays, artificial intelligence has already offered many effective solutions to a variety of industries and it is time for introducing positive changes in a conservative logistics sector. The use of artificial intelligence provides enhanced customer service. With the growth of e-commerce businesses, like AliExpress or Amazon, consumers are relying on online orders more than ever. However, due to negative experiences with logistics companies on the Internet, trust in online shopping started to fall rapidly.

The implementation of AI in the logistics industry helps to solve these problems by offering such digital solutions to customers as:

1. Delivery packages tracking,
2. Vehicle tracking,
3. Delivery time tracking,
4. Filling in invoices and web forms,
5. Route optimization,
6. Cost reduction.

Furthermore, almost all logistics companies have cloud-based databases that allow them to access customer and order data within seconds. Digital logistics companies can now more effectively manage day-to-day operations, including availability, costs, flow and resource monitoring, transportation process, staffing, and suppliers, to ensure flawless processes and enhanced customer service.

Robotic Process Automation (RPA)

Robotic Process Automation (RPA) offers many benefits to supply chain organizers:

1. Reduced costs.
Employers don't need to spend extra money on hiring and training of new employees.

2. Reduction of mistakes.
Due to performing tedious tasks, people can easily burnout and start making mistakes.

3. Process acceleration.
Robots can perform a lot of time-consuming and repetitive tasks and don't become bored and exhausted as people do.

Speaking about such an important issue as safety, the introduction of RPA has a significant impact on improving labor safety in the digital logistics industry. Robotic process automation reduces the risk of injury at the operational level in the supply chain warehouse, saving workers from hazardous work procedures. For instance, a robot for packaging and stacking on pallets can eliminate the risk of injury when performing industrial tasks for stacking on pallets, such as heavy boxes.

Blockchain

When people hear about blockchain, the first thought that comes to their minds is cryptocurrency coins and mining, but the main idea is much wider and deeper. Since the moment of its first market appearance, multiple industries have adapted this technology to their needs. And logistics is not an exception.

The main benefits of integrating blockchain into logistics:

1. Elimination of data tampering. A document entered once, such as a bill of lading, receipt, or certificate of conformity, remains in the system in its original form forever;

2. Elimination of unnecessary intermediaries;

3. Prevention of illegal goods mislabeling and other fraud attempts;

4. Time-effectiveness. Blockchain allows reducing the time for document management by an order of magnitude, quickly finding the link of transportation where a mistake was made, and reducing business costs.

DIGITAL SOLUTIONS IN LOGISTICS

A Fleet Management System helps freight forwarders to improve the efficiency of their fleet by analyzing operational data.

Fleet Management System services include:

1. Vehicle management solutions that diagnose potential problems in vehicles and enable companies to take action;

2. Driver management solutions that monitor driving performance, ensure safety, and avoid unnecessary costs;

3. Operations management solutions that focus on route planning and optimization and mobile workforce management;

4. Network solutions that support the integration of enterprise resource planning software for elimination of redundancies, accuracy and productivity improvement.

Fleet management systems

Digital signatures

GPS-tracking

A digital signature, a type of electronic signature provides proof of origin, time, identity, and status of a digital document. A signature confirms that the data emanated from the signer and has not been tampered with during transit.

Benefits from using a digital signature:

1. Cost-effectiveness.
Many companies see significant cost savings, with little or no expense in ink, paper, printing, scanning, delivery or travel expenses. There are also savings in such indirect costs as filing, data reuse, archiving, or tracking.

2. Better customer experience.
Digital signatures are time-efficient for signing important documents wherever a customer or the person is located. The customer has the freedom to be anywhere, and engage with a company, making services and businesses far more easy, quick and user–friendly. Just click on a button on your tablet, phone or computer, and all the necessary documents and contracts become signed off. It is convenient, isn't it?
GPS-tracking allows the implementation of fleet management systems for locating and tracking vehicles, planning and optimizing routes, etc., all in real time.

GPS-tracking offers a variety of benefits:

1. Reduction of operating expenses.
Logistics GPS tracker allows you to find the shortest routes for your vehicles, reduce fuel consumption and avoid unnecessary overtime costs.

2. Resource optimization.
Logistics GPS tracker allows you to track vehicles and get detailed insights on fuel usage, driver behaviour, in real time. With the data obtained from a fleet management system, you can utilize your resources effectively and identify key money-saving operation parts.

3. Reduced maintenance costs.
Logistics GPS tracker can diagnose vehicles and indicate fuel level. You can also monitor key aspects such as engine oil and the overall health of your vehicle.
WOULD YOU LIKE TO KNOW HOW WE IMPLEMENTED A DIGITAL LOGISTICS PLATFORM AND REDUCED OPERATING COSTS?

DIGITAL TRENDS IN LOGISTICS

A key point that often comes up when discussing supply chain trends is green logistics which is a measure and sustainable policy taken by the logistics industry to minimise the environmental impact on transportation process, warehousing, and other logistic activities.

So, what logistics companies have to undertake to become environmentally friendly?

1. Use eco-friendly and reusable packaging materials. A good example of this is using strong pallets, to ensure long-term use;

2. Packing items more efficiently. Packing the items in a way that more can fit in a single box;

3. Load Optimization. Sending tracks when is fully loaded;

4. Route Optimization. By choosing the shortest way, it is possible to minimize fuel consumption and, consequently, reduce the amount of CO2 emissions;
Customer-centric service will also become a key focus for suppliers, manufacturers, drivers and team members. Customer requirements change by season, bringing with them the need for supply chain management to be adaptable and easy to execute. Knowing customer needs and ensuring satisfaction from start to finish will be one of the hottest trends in the digital logistics industry.
Cargo owners want to keep the full transportation process under control from their mobile devices. Now customers can order transportation by filling several fields in a logistics mobile app. The main steps are to choose the appropriate vehicle, the departure and the destination point, time and date. Make an order and monitor the whole transportation process in a mobile application.

1. Green logistics

2. Improved customer service

3. Order transportation from a mobile app.

SUMMARY

Even though the logistics sector is considered to be a conservative one, now it is slowly but surely catching up with companies that have already implemented digital technologies and automated routine tasks. Now, digital capabilities and information excellence are key point for closing existing gaps and transforming for better customer engagement, introducing new business models, and the challenges facing the industry.
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