The Era of Logistics is here.
Never has the importance of supply chains been more widely acknowledged by Businesses and governments in connecting people and improving lives. On an unprecedented level, we are seeing businesses transform logistics from a quiet, back-end operation into a strategic asset and value driver.
The unexpected events of the past had a huge disruptive effect on supply chains. From the continued effects of the COVID-19 pandemic to the Suez Canal obstruction and the war in Ukraine, supply chains were repeatedly tested in the past few years.
Going forward in 2023
Looking at the possible challenges for the freight market in near future are staffing shortages, capacity issues, inflation, and demand peaks. Agility, flexibility, and visibility often facilitated by digitalisation, are all key to riding out a storm of the past. With the right technology and ability to collect and analyse data, freight forwarders can improve efficiency.
Sustainability as the key indicator
Companies are trying to ensure that their vendors, partners, and suppliers uphold ethical standards for environmental stewardship, sourcing, and worker conditions. According to 2022 Global Sustainability Study 71% of consumers around the world are making changes to live more sustainably and buying more sustainable products.
Freight transport accounts for 8% of global CO2 emissions, with a predicted increase to 42% by 2050. Freight forwarders hold important procurement power and can support the transition to a more sustainable logistics industry. By asking and opting for sustainable transport products, they can help shift the dial and reduce emissions. They can also be advocates for digitalisation, which can help identify pain points and efficiencies in the supply chain to improve sustainability.
Digital freight forwarders take centre stage
Digital transformations are happening in most industries, and freight forwarding is no exception. Digital freight forwarders use technology to coordinate and control the transportation of goods. Digital freight forwarders have many strengths, including:
- Greater ability to measure and meet supply and demand
- Opportunities to improve efficiency
- Increased ability to centralise and analyse data
- Automation and simplification of tasks
The global digital freight forward market is expected to grow at an average rate of 23% over the next few years, according to Allied Market Research. It started at just USD 2.92 billion in 2020 and will reach $22.9 billion in 2030. This equals over 8% of the total global freight forwarding market, with 2023 being a key year for innovation and growth.
New age technologies: AI, IoT & Blockchain
According to Global AI Survey, the use of Artificial Intelligence in logistics can increase companies’ profits by more than 40% per year. By using algorithms based on data from previous processes, automating procedures, identifying patterns in which companies can predict buying demands and manage inventory, taking the guesswork out of planning and procurement.
IoT will be responsible for connecting almost everything in logistics, from packages to people, adding value to the supply chain. IoT devices provide information to logistics companies, who in turn can use all this information in real-time to proactively meet customer demands, minimize downtime, and increase overall supply chain efficiency.
Blockchain is a form of distributed ledger technology that holds records of digital data or ‘exchanges’ in a way that makes them tamper-resistant. Businesses can use blockchain technology to track any transaction, making it possible to share documents, personal information, and cryptocurrencies.
- Enhanced tracking of materials from a source, through the supply chain, to the customer;
- Reduced paperwork and administrative processes;
- Improved transactional security and visibility with suppliers and subcontractors;
- Improved fraud detection and prevention for high-value items.
Overcoming challenges and seizing opportunities in 2023
The worst disruptions of recent years appear to be behind the freight forwarding companies. The Sea Intelligence consultancy recently reported that, in the absence of unexpected disruptions, shipping strains will return to normal by March 2023. But, as old challenges fade, new ones will take their place. Understanding freight forwarding industry trends and being prepared for all scenarios by prioritising supply chain resilience and agility will be part of the solution.
2023 will be a year unlike any other for the freight forwarding industry and one that will require being ready with digital solutions .