Logistics Trends in 2022

As supply chain challenges continue to interrupt the world and local economies, the shipping and logistics industries remain in flux. With the uncertainty, innovative and adaptable companies may start to emerge as industry leaders.

In order to get products to customers and generate revenue, agile companies are rapidly adapting and new players are rising to meet the needs of the changing logistics environment. Below are some of the trends emerging to meet the needs of these fluid conditions.

Logistics Trend 1: On-demand Warehousing

This strategy has become more common with the rise of e-commerce. The on-demand approach connects brands that need to store inventory and fulfill orders on a temporary or smaller basis with warehouses that have excess space. 

For businesses needing warehousing, on-demand warehousing is ideal for businesses that need warehousing and logistics services but would rather not make an investment in owning or managing a warehouse. This also provides a cost-effective and flexible fulfillment solution. Though it’s an affordable option, companies need to fully vet their third-party logistics (3PL) partners. High-quality 3PL providers like NOTS Logistics can provide superior service and a level of visibility into operations and efficiencies that others cannot. 

Trend 2: Spot Market Instability

While AI and other innovations grow, shipping remains a people business, and loyalty is important. However, with destabilized supply chains ability becomes prized over loyalty. Now, if you are able to effectively manage freight and get it to its destination, you’re likely to get the job. 

As a result, many carriers are foregoing long-term contracts, which provide less stability and flexibility for shippers in an ever-changing market. The spot market surge doesn’t appear to be going away anytime soon. S&P Global is already reporting as much as 100% price increases for shipping container rates year over year, as early shipping contract discussions for 2022-2023 begin. This will only increase prices for consumers. 

Trend 3: More Intermodal Freight

This form of transport is bigger than ever and plays a crucial role in maintaining the world economy. Intermodal makes trade possible between distant nations while keeping shipping times and costs to a minimum. In a study from the Association of American Railroads, January 1 rail traffic report, 2021 was the “second best intermodal year ever” behind 2018. 

Trend 4: Warehouse Management Systems (WMS)

Though WMS technologies have been around for some time, their importance continues to rise. In order for a business to keep up with the changing landscape of logistics, they need to have an understanding of their inventory. That’s where warehouse management systems come in. A WMS is software that helps businesses track inventory levels, locations, and movements within a warehouse. This information is critical for optimizing warehouse operations and ensuring that orders are fulfilled on time.

Keeping track of things such as shipping, receiving, tracking, and storing inventory, as well as training staff, workload planning, and monitoring the movement of goods is very important for any company’s success. 

Trend 5: Last-mile Innovation

Even as the pandemic seems to wane, consumers will keep shopping from home, with the expectation of quick, uninterrupted delivery to our homes and businesses. In a study by Transparency Market Research, the last-mile industry is expected to hit a valuation of $477.7 billion by 2031.

Even as the pandemic seems to wane, consumers will keep shopping from home, with the expectation of quick, uninterrupted delivery to our homes and businesses. Faster delivery is now expected by consumers due to the standards set by names like Amazon and Walmart Marketplace. 

In addition to speed, the cost is also a driving force noting that 28% of an online brand’s bottom line comes from last-mile delivery costs. It is crucial to find ways to optimize last-mile delivery to offset shipping costs.

Last-mile delivery will continue to evolve as the delivery landscape continues to change. Emerging technologies will continue to attract investment in the near future, bringing about the next wave of evolution in transportation services. self-driving delivery vehicles and drones are just two examples of what is to come. 

Logistics Industry: Driving Towards the Future

In recent years, supply chain obstacles caused by the pandemic have spurred innovation in delivery services. Despite all of the frustrations the logistics industry has encountered, transportation providers will ultimately profit from the innovation and improved systems implemented in order to boost efficiency and keep goods moving.

The shipping and logistics industries are in a state of flux as supply chain challenges continue to interrupt the world and local economies. With the uncertainty, innovative and adaptable companies may start to emerge as industry leaders. In order to get products to customers and generate revenue, agile companies are rapidly adapting and new players are rising to meet the needs of the changing logistics environment. Below are some of the trends emerging to meet the needs of these fluid conditions. Contact NOTS Logistics for your logistics needs so you can stay ahead of these trends in an ever-changing market.