Without proper logistics, it’s difficult for a company to remain competitive in today’s fast-paced global market. The world is becoming more complex and interconnected, which allows for more significant economic growth but also causes new and unpredictable market disruptions.
In 2020, the coronavirus pandemic affected businesses on a profound level. Closed airports and lockdowns across the globe meant disruptions in supply chains, and many companies realized the vulnerability of their logistics.
The upcoming decades are going to bring opportunities and challenges in the logistics sector. As new technology, automation, and AI technology enter the field, businesses must optimize their logistics systems to remain competitive. These are some of the global logistics challenges in today’s changing world.
1. Unknown Supply-Chain Risks
More than any other event in recent years, the coronavirus pandemic has shown that we live in an uncertain world. Businesses need to consider unknown risks and increase their supply chain flexibility to remain competitive.
In addition to the Covid-19 pandemic, 2020 was also a historic and troubling year regarding storms and natural disasters. Wildfires and inclement weather affected people, businesses, and supply chains across many states in the U.S., causing around $95 billion in losses. To avoid supply chain problems in difficult times, choosing a reliable and trustworthy shipping company is critical.
In today’s interconnected world, supply chains have become extremely long. For example, a car manufacturer in the U.S. might import engine parts from Japan or China. The longer the supply chain, the higher the risk of disruption. Companies should assess and identify potential supply-chain risks and develop a backup plan.
2. Supply Chain Digitization
One of the current challenges for the logistics industry is the visibility of the supply chain. Supply chain visibility refers to a company’s ability to locate a specific part or product as it travels down the line to its final destination.
For the most part, companies today have very little visibility of their supply chain. They have a certain amount of data about what happens to their product inside their factories or warehouses, but they don’t have visibility beyond their section of the operation.
Thanks to new technologies, businesses can collect, analyze and share real-time data about the state of their product. By sharing data, companies can have a more accurate picture of the entire supply chain, which can help them respond more quickly to problems.
Many companies are investing in the digitization of their supply chains, which is a trend that will continue in the coming years. Companies that don’t embrace new data collecting strategies are likely to fall behind competitors who collect real-time data about their supply chain and business.
3. On-Time Delivery
Customers in the U.S. and other countries are asking for faster and cheaper deliveries. In recent years, delivering products in just a matter of days has become the norm. Companies like Amazon are raising the bar with same-day delivery, which remains difficult for many other companies to match.
There are two strategies companies are using to increase the speed and efficiency of their deliveries. One is microfulfillment, which involves using small decentralized warehouses instead of giant distribution centers to reach the consumers. This method means that more people in remote locations are likely to have access to fast delivery because the warehouses are more widely dispersed. Many companies in the U.S., such as Amazon, Target, and Walmart, are adopting this strategy to reduce delivery times.
The other strategy is the automation of warehouses with robotics and artificial intelligence. Combining microfulfillment centers with the latest AI creates small and efficient warehouses that can reach customers a lot quicker. Having a network of fulfillment centers with the latest technology is key to a company’s success.
4. Dealing With the Climate Change Crisis
There are several reasons why climate change will be a logistics challenge for companies in the coming decades. First, there is going to be increasing legislation regarding climate change. Those companies who prepare ahead of time and adapt their logistics will have the advantage.
Sustainable logistics practices are more profitable than non-sustainable practices. Therefore, companies that adopt sustainable practices will be prepared for upcoming legislation and become more efficient overall. There’s a wide range of methods businesses can adopt to become more sustainable. Route optimization, using recyclable packaging materials, and eliminating excess packaging are just a few of the measures companies can take to reduce their environmental impact.
Consumers are demanding companies become more eco-conscious across many industries, but especially in eCommerce. Amazon has committed to becoming carbon neutral by 2040, and they also want to power all their operations with renewable energy by 2025. To remain competitive, eCommerce businesses will have to keep track of these changes to attract consumers.
Learn More About Shipping and Warehousing Services With Asiana
At Asiana USA, we can help you find the necessary transportation and logistics solutions for your business. We aim to provide our customers with excellent shipping and warehousing services at competitive rates. Contact us online or call our staff at 855-500-1808.