The COVID-19 pandemic certainly was a brutal body slam to the world, impacting things both economically (the GDP fell by 1.2% and unemployment rose to over 14% in the U.S. in the first quarter of 2020) as well culturally. With all this came a “new normal” — different ways of thinking and new rules and regulations, all of which have altered virtually every industry worldwide.
No Industry Is Immune To the Effects of COVID-19
Some industries benefited greatly from the sudden change, including software companies that enable remote work and learning, financial industries that deal with cashless transactions, and companies that deal with personal protective equipment. Unfortunately, many industries, including travel and leisure, real estate, brick-and-mortar retail, and agriculture, have experienced a sharp and sudden downturn due to the pandemic.
When it comes to logistics and shipping industries, the global pandemic had both positive and negative impacts. There is some uncertainty in how things will ultimately play out with no historical data or parallels to draw from. But we know that logistics and shipping run in tandem with e-commerce, and the previous two decades have seen unprecedented growth in the sector. E-commerce exploded from 1.3% of retail sales in 2000 to 14.2% in 2019. That trend doesn’t look to level off or reverse course anytime soon.
The Logistics Industry in the COVID-19 Era
The logistics industry was one of the first global sectors to be impacted by COVID-19; starting in China, travel and shipping restrictions created a bottleneck in the supply line, which affected suppliers (and ultimately consumers) in other parts of the globe. The industries affected by the initial outbreak included electronics, pharmaceuticals, medical equipment, and other consumer goods.
This ripple effect was felt on America’s highways, where the volume for long-haul trucking dropped dramatically (below 15%) from the year before. Although full truckload (FTL) shipping levels quickly rebounded, it gave pause to industry analysts about how quickly things can change due to unprecedented world events.
Trends for 2021 and Beyond
However, some exciting logistics industry trends have arisen in the COVID-19 era and look to continue in 2021 (and beyond). Because e-commerce and delivery have exploded in the past year, new trends have emerged. These include:
Artificial Intelligence
Artificial intelligence is used in the logistics and shipping industries to streamline the shipping process by predicting product demand and granting the ability to modify orders and reroute shipments on the fly. Using AI in these regards provides cost savings and can yield faster, more accurate deliveries.
Blockchain
Blockchain is a type of database in which “blocks” of data are chained together to store information. Although it’s most known for ledgers for digital currency such as Bitcoin, blockchain has many other uses, including shipping and logistics industries. Blockchain provides a secure method for quickly delivering digital data stored in a single location and renders previous data communication methods obsolete. It has rapidly become a fast and cost-efficient way to transmit data.
Green Logistics
As the worldwide movement to help protect the environment becomes more mainstream, companies in all sectors are going all in, and that certainly includes the logistics industry. 3PL firms take measures to provide services under the “green” banner to reduce their carbon footprint. These include rethinking overall shipping strategies and incorporating things like AWS (all water service) for specific non-time-sensitive shipments, opting to use FCL (full container loads) over LCL (less than container loads), avoiding air freight when possible, and reducing the weight of packaging options.
Omnichannel Services
Omnichannel refers to the ability of a retailer to integrate different types of purchasing to consumers. This can include online retail, a physical brick-and-mortar, telephone, or a hybrid method such as BOPIS (buy online, pick up in-store). Having the ability to deliver on schedule, manage customer needs such as returns and deal with the back end (coordinating all aspects of retail, inventory, and shipping) is another trend that creates a new paradigm in the industry.
Increased Shipping Demand
If the COVID-19 pandemic proved anything to the world, people are more dependent than ever on receiving shipments. In mid-2020, the trucking industry saw a vast increase in volume, and that looks to be another trend that’s here to stay. The fallout from the pandemic has driven the demand for delivery dramatically higher. This ranges from consumer goods to the distribution of the COVID-19 vaccines. The flexibility to quickly scale up shipping capacity has proven itself loud and clear as a trend that will shape 2021 and beyond.
Chris Capelle is a technology expert, writer, and instructor. For over 25 years, he has worked in the publishing, advertising, and consumer products industries.
References:
https://blog.freightcenter.com/2021-trucking-trends-and-predictions
https://www.fm-magazine.com/news/2020/apr/business-sectors-boosted-by-coronavirus-concerns.html