Consumer buying behavior is changing rapidly and so does the logistics industry. Logistics is an enabler for omnichannel retail organizations. But what trends can we expect?
Let’s start by taking a look at some key technologies that have become hot topics in logistics innovation over the last few years, followed by social and business trends that are transforming the way we will do logistics in the near future.
Autonomous logistics is on the rise - both on the ground and in the air
Autonomous logistics has undoubtedly created the largest amount of media noise in recent years. Its diverse definition and representation in the media shows that this trend requires a clear distinction to be made between self-driving and unmanned aerial vehicles – an insight that is also reflected in this year’s update of the trend radar. Self-driving vehicles have already made inroads in logistics, reaching a level of maturity for commercial use in warehouse operations. First generations of autonomous shuttles and forklifts (e.g., Linde and Balyo) are being deployed in clearly defined and controlled areas of the warehouse, unlocking new levels of process efficiency and performance.
Looking up to the skies, unmanned aerial vehicles (UAVs), or drones, still require a bit more time before mainstream adoption. The commercial use of UAVs is heavily regulated in most countries; however first tests have demonstrated the future potential of UAVs especially in rural delivery scenarios. DHL’s Parcelcopter, for example, has been successfully tested; it delivered medications and other urgently needed goods to an island as well as to a remote mountain region in Germany. Experiences gained from such projects will help to further improve the technology and accelerate adoption.
Internet of Things - Hype or Revolution?
Another trend causing a lot of buzz is the Internet of Things (IoT) and its potential to connect virtually anything to the Internet and accelerate data-driven logistics. It is estimated that by 2020, more than 50 billion objects will be connected to the Internet, presenting an immense $1.9 trillion opportunity in logistics. New dedicated IoT networks such as LoRaWAN™ are also emerging to increase the speed of IoT adoption. Therefore it is no surprise that IoT has become a priority on the agenda for most major companies. However, only a few logistics applications with substantial business impact have materialized so far, an insight that is also reflected in this year’s update of the DHL Trend Radar.
This is largely due to a shortage of standards in the industry, security concerns, and the fact that recent IoT innovations have mainly been developed for the consumer market. Therefore, logistics will have to wait until similar ruggedized versions that meet business requirements come to market.
Machines join the logistics workforce - a new form of collaboration
In contrast to IoT, significant strides are being made in the area of machine-human interaction and collaboration in logistics. Augmented reality (AR) accessed via smart glasses has exceeded predicted levels of impact. So far mainly adopted for order picking in logistics (also known as ‘vision picking’), smart glasses enable intelligent, handsfree operations. First productive deployments have delivered promising results. A pilot by DHL and Ricoh in the Netherlands showed a 25% efficiency increase as well as strong positive feedback from the users.
A similar development can be seen in the area of robotics and automation. Complex logistics operations and cost sensitivity were key barriers to the adoption of industrial robots in the past. Next-generation robots have changed – they have become lighter, more flexible, easier to program, and more affordable. Successful tests using collaborative robots have already demonstrated that robots can work side-by-side with employees, supporting repetitive and physically demanding tasks in logistics operations.
Delivery of anything, anytime, anywhere - The future of retail logistics
While the transformative power of new technologies can be showcased in a relatively straightforward and tangible way, social and business trends, which are often a bit more difficult to grasp, have equal importance in redefining the future of the logistics industry.
One major trend that will make or break retailing and ecommerce in the future is omnichannel logistics. The modern shopper‘s journey now cuts across different channels including offline and online options. It is shifting from a sequence of actions in a single channel to a seamless variety of actions across multiple channels. Logistics, as the backbone of retail, needs to react and offer innovative omnichannel solutions that satisfy the demand for more personalized, dynamic delivery options as well as fulfillment services at a competitive price level. Over the past two years, this has led to the development of new solutions to facilitate last-mile delivery such as same-day and even same-hour delivery models (e.g., Amazon Prime), individual parcel lockers (e.g., DHL Paketkasten), and even delivery-to-car-trunk concepts.
Rising demand for fair and responsible supply chains
Besides the need for faster and individualized services, there is a growing movement towards fair and responsible logistics. Driven by megatrends such as sustainable consumption, digitalization, and globalization, companies now increasingly focus on turning social and environmental challenges into opportunities by creating fair and sustainable solutions that generate social as well as business value along the supply chain.