Evolving trends that will set a new course in the logistics industry this year

Increased demand from organisations for improved supply chain management, lower logistics costs, and the ability to take on more complex jobs has led to major innovations in third-party logistics services. Here are some marquee trends that will propel innovation in the industry.

Evolving trends that will set a new course in the logistics industry this year

Sunday February 26, 2023,

6 min Read

The e-commerce industry in India has seen tremendous development over the last several years, driven by factors such as rising number of internet users, growing internet penetration, and increasing usage of smartphones. With the growth of the e-commerce industry, many companies are in need of a reliable third-party logistics solution to handle the shipping of their products.

Companies are leaning towards a logistics service provider that can help them with order fulfilment, last-mile delivery, inventory management, packing, and returns so that they can focus on serving their customers and growing their brand.

Major innovations in third-party logistics services are a direct result of increased demand from organisations for improved supply chain management, lower logistics costs, and the ability to take on more complex jobs.

Here are some trends that will be popular in 2023 and help propel the logistics industry forward.

Increased traction of technology

Brands functioning in India’s third-party logistics market should take into account increased technological usage in 2023. Automation, big data analytics, and incorporation of artificial intelligence (AI) and machine learning into supply chain systems can help the industry achieve the goal of increased productivity.

In addition to these, third-party logistics providers are investing more in cutting-edge IT and software solutions like inventory management systems, blockchain, and cloud computing in an effort to boost output and earnings. Logistics providers may benefit from these technology developments since they allow them to save costs, expedite delivery, and increase operational efficiency.

digital supply chain

Compass needs to point towards a digital destination

The logistics policy in India desperately needs to be optimised. With the help of logistics markets, truckers may improve their total performance and price competitiveness. However, they must use equivalent automation and technology, such as RFID, GPS, and warehouse management systems. Improving workers’ knowledge and giving them access to innovative technologies are other pressing focus areas.

The logistics industry will see significant transformation in the next few years as a consequence of digitalisation. Data mining can be a treasure trove of opportunities and optimisation that can lead to new horizons. In Logistics 4.0, recognising trends in processes such as product receiving, order picking, and returns may improve demand forecasts and inventory management.

With the growth of technologies such as big data, AI and machine learning, data mining has become increasingly important. Automated data extraction techniques organise and filter information to provide useful knowledge. Numerous applications include fraud detection (finance), demand prediction (sales and marketing), and bottleneck identification (industry and logistics).

Last-mile logistics must be prioritised

Over the years, last-mile delivery has played a critical role in the third-party logistics industry and it continues to be one of the industry’s most prominent developments. As it impacts the result of the customer experience, last-mile delivery has become a crucial component of e-commerce.

Using technology breakthroughs, experienced labour, and trained staff, third-party logistics providers may significantly enhance delivery operations and accelerate the process preceding last-mile delivery operations, resulting in a faster delivery operation overall.

The issue in the country is not shortage of drivers but poor roads, imprecise addresses, traffic bottlenecks, and absence of detailed maps. When seeking to improve last-mile delivery, different factors must be considered. Effective last-mile delivery operations keep consumers pleased and thrilled while increasing sales, promoting brand loyalty, and enhancing profitability.

Green logistics will grow

Green logistics, also known as sustainable logistics, refers to practices, policies and procedures that businesses use to reduce their negative effects on the environment. Companies are becoming more environmentally conscious as they work to lessen their carbon footprint, pollution, and waste along the whole supply chain.

Businesses are taking steps to reduce their environmental impact by switching to electric cars, increasing awareness of recycling and garbage drop-off locations, and using biodegradable products. Fleets may reduce their environmental effect and win over more customers by adopting ecofriendly logistical practices. It’s a brilliant decision that secures the long-term success of both the business and the planet.

EV Budget

Customers value the services provided by e-commerce retailers, such as expedited last-mile delivery choices and flexible return policies. Due to return procedures that are simple and flexible, as well as minor discrepancies between the product received and its description or reviews, customers have become more particular about the quality of items.

As a result of reverse logistics costs, blocked inventory, operational costs in order processing, repackaging, quality checks, and the increased likelihood of product damage, online retailers have a difficult time managing a high volume of returns, which has a direct impact on business revenue and profits.

Reverse logistics expenses, blocked inventory, operational cost in order processing, repackaging, quality checks, and higher potential of product damage all have a direct influence on a company's revenue and profitability when dealing with a large frequency of returns.

The effects of RTO (return to origin) are not limited to e-commerce enterprises; a high RTO rate is also associated with an increase in carbon footprint, traffic and noise pollution. Reducing RTO may have favourable ecological consequences. This may be accomplished by educating clients about acceptable consumption patterns and offering environmentally friendly delivery choices.

Cloud computing will become popular

Cloud computing is revolutionising company administration, especially the organisation of supply chains. In 2023, software as a service (SaaS) will be an additional logistics trend that will create an impact. Use a SaaS-based warehouse management system (WMS) to digitise your logistics operations, so that it can be accessed from any internet-connected device. Additionally, it reduces infrastructure and maintenance expenses.

Having a SaaS-based WMS also increases information management security. Thus, all data produced in your facility are recorded, saved and backed up automatically using cloud computing technology. Implementing cloud-based software also makes your digital solution more flexible; the SaaS version permits a scalable number of client licences.

Other significant developments

In 2023, the logistics sector is likely to see significant developments that will determine its future direction. These include the introduction of electric cars, drones and autonomous vehicles. Ultimately, the emergence of smart logistics and internet of things (IoT) will allow for more precise real-time cargo tracking, higher efficiency, and an enhanced customer experience.

These shifts will need logistics firms to adapt and invest in technology to remain competitive. Future logistics will prioritise minimising wait times as much as possible and accelerating delivery. Alongside this, cargo security will also receive high emphasis.

(The author is the co-founder of iThink Logistics.)

Edited by Swetha Kannan