Where Will Logistics Go in 2022? Key Trends to Watch
Table Of Contents
- Industry-wide trends in logistics
- E-commerce logistics trends
- Full-service logistics trends
- How to keep your business on the cutting-edge of modern logistics
In 2021, the term ‘supply chains’ exploded — thrusting logistics into the global spotlight. From press releases issued by the White House to viral memes and TikTok explainers, the unlikely entrance of supply chains into the public eye happened suddenly. And we’ve all likely felt the effects: late shipments, business headaches, a holiday season turned upside down, the list stretches on and on.
But as the new year begins, there’s also an opportunity for the world of logistics to get smarter and adapt to both new norms and changing customer expectations.
So, what lies ahead in 2022? We’ve put together a list of trends that could shake things up in the coming year.
Industry-wide trends in logistics
Sustainability as a priority
Today, polling shows that 70% of consumers are willing to pay a premium for products that stem from a sustainable pipeline. Green logistics, while still in its early stages, is set to spread throughout the industry.
What might that look like in practice? First of all, we can expect more companies to adopt Environmental, Social, and Governance (ESG) policies that may drive their supply chain decision-making. And while it may be incremental at first, nearly every other step of the process is ripe for green disruption.
As we recounted in a recent blog, a few immediate areas of improvement could come from:
more strategically-placed warehouses
more energy-efficient fulfillment centers
the adoption of electric vehicles in cargo transport.
Faster uptake of technology
Although ‘high tech’ logistics might bring to mind autonomous vehicles and warehouses staffed exclusively by robots, some of the most useful technology in the industry is already in place with software and inventory management interfaces working to streamline operations.
After a year of huge uncertainty, logistics providers are beginning to see that keeping customers in the loop pays dividends. With more advanced software on the market, business partners and, in turn, customers, can be assured of where their product is in the shipping process. At CBIP, we use custom technology to track orders and prioritize visibility every step of the way.
Another immediate benefit of more sophisticated technology comes from the ability to smartly allocate space. Artificial Intelligence (AI), for instance, can help predict trends in demand and allocate warehouse space more effectively — a pressing need, given that warehouse availability can account for as much as 20% of the cost per order.
RELATED READING: How Technology is Transforming Logistics, Part I
E-commerce logistics trends
Re-thinking warehousing amid COVID and the e-commerce boom
If 2021 showed us anything, it’s that businesses need to be ready to adapt to supply change surprises — and fast. In the wake of an ongoing supply chain crisis and struggles to transport raw materials on-demand, many logistics providers and businesses are avoiding long-term warehouse leases. They instead want a more flexible model..
In 2022 many businesses are making their supply chains more flexible in two ways:
Working with logistics companies don’t own assets themselves but have a roster of international warehouse partners to choose from
Keeping more inventory on hand to deal with delays happening earlier in the supply chain. This breaks with the previous trend, Just-In-Time (JIT), where manufacturers receive only enough raw materials to match demand for a shipment at a given time.
More players in the last-mile game
A recent industry poll revealed that more than 60% of logistics companies find last-mile delivery to be the least efficient part of the entire supply chain. Last-mile delivery continues to be a thorn in the side of businesses worldwide — a trend that is, for better or worse, likely to continue.
According to a recent report from the American Journal of Transportation, capacity crunches for big providers like FedEx are expected to soon be “the norm.” To increase effectiveness, companies today are diversifying their channels for last-mile couriers to include more small, regional providers alongside industry giants.
Full-service logistics trends
Continued high costs for ocean and air freight
It wasn’t so long ago that we were on edge about the clogged Suez Canal. In truth, that was just the beginning of our international cargo transport woes.
In 2021, sea freight costs soared to 500% higher than pre-pandemic rates, hitting a spot price of over $20,000 per container. For air freight, it’s a similar story as some companies previously reliant on ocean cargo have opted for the skies, air freight providers have seen more opportunities to gouge prices
Looking to the new year, it’s safe to say prices will remain high during a course correction period. But here’s the good news: consumer demand is on a steady increase and more nations are — hopefully — easing border restrictions. Businesses may soon have an opportunity to capitalize on the “new normal” if their production is spread out and their logistics operations utilize a wide network of partner providers. That could mean even better prices down the line.
Ground transport enters the future
Let’s face it: The trucking sector (especially in North America) is in trouble. With a deficit of nearly 80,000 drivers in the US alone, logistics providers are going back to the drawing boards to figure out how to move forward.
In the short term, ground transport providers are updating their incentive structures and widening their hiring pools to fill the labor shortage. In the long term, more companies are thinking of accelerating the push for autonomous vehicles in 2022.
One startup, TuSimple, has already covered 150,000 miles in the American Southwest with fully-autonomous trucks through a pilot program. This development comes alongside more and more investment in the autonomous truck industry as a whole, which is projected to double in value by 2026.
How to keep your business on the cutting-edge of modern logistics
Your business should enter the new year with excitement, not apprehension. At CBIP, our philosophy goes beyond just keeping up with the trends — it’s about leading the industry into a more sustainable future while adapting to your business’s unique logistics needs.
Whether your business is looking to enter new markets, scale without sacrificing customer satisfaction, or streamline fulfillment with a wide range of options, our team has the experience to help you take on 2022 the right way. With comprehensive visualization technology and on-the-ground partners around the world, you get both custom plans and comprehensive coverage.
Ready to hit the ground running in the new year? Give us a call today and speak with one of our experts.