Logistics and Supply Chain Trends for 2018

It’s no doubt that 2017 brought some big changes to the logistics and supply chain world. Just to give you a brief refresher; the ELD mandate took effect in December to increase road safety, FDA’s Food Safety Modernization Act to prevent contamination foodborne illness was finalized in April, there was a larger focus on autonomous trucks, and there were discussions on blockchain technology that has the potential to transform the future of logistics. With the implementation of new regulations and political shifts that have taken place, 2017 saw a lot of ups and downs.

As we put the year behind us, let’s talk about some of the biggest logistics trends to watch for in 2018.

Infrastructure investments

Poor roads, outdated highways, unsafe bridges and railways are all a cause for general safety concerns, but outdated infrastructure is also a business concern. In October 2017, we saw two major rivals team up to communicate their concern about the nation’s infrastructure. David Abney, CEO of UPS and Frederick Smith, CEO of FedEx, co-authored an op-ed in the Wall Street Journal urging the White House to take action in several areas, especially the U.S. infrastructure. In their letter, they state that economic rivals such as China and India continue to make massive investments in their infrastructure while U.S. infrastructure crumbles. At a later date, Abney discussed the effect that a daily 5-minute delay for drivers due to poor infrastructure costs about $105 million annually!

President Trump’s long-promised infrastructure proposal is due to be released sometime this month that should include a detailed document of principles for upgrading roads, bridges, airports, and other public works. This is the first time in decades that this type of infrastructure discussion has taken place at the federal level.

Labor Shortages

The driver shortage has been a long-time topic of concern and will continue to be in 2018. By the end of 2015, driver shortage had blown past 45,000 and some estimates believe that the shortage could reach 150,000 by 2024. The ATA created a new workforce development subcommittee with the goal of determining solutions to bridge the expected gap.

However, driver shortages aren’t the only numbers expected to be on the rise. Warehouse labor shortage is another concern. Despite the average $15 per hour wage, there is much more to be desired in this line of work. Logistics service providers are beginning to explore alternatives, such as autonomous mobile robots to meet the demand.

Elastic Logistics

Elastic logistics refers to the flexibility to expand and shrink capabilities to align with demands within the supply chain during a given timeframe. This provides a customized answer to requirements like cost control, warehouse management, priority deliveries, and more. In the logistics industry, supply and demand change on a day-to-day basis. To handle the demand changes, logistics companies are making their operations elastic to plan the capacity according to requirement.

With optimal utilization, companies can complete deliveries on-time while keeping costs intact. This type of logistics can help by enhancing customer experience, adding real-time visibility, connecting all business processes, and providing agility and scalability.

Digital Technologies

Blockchain, autonomous mobile robots, IoT, and other related technologies will continue to receive a lot of hype in 2018. Even though these are all lumped into the “Digital Technologies” category, they are all at very different points on the maturity curve. For example, while autonomous mobile robots are fast approaching maturity, blockchain is at the bottom of the maturity curve.

These digital technologies will help create a huge improvement in business outcomes, as long as businesses update their supply chain management strategies.

What logistics trends will you be following in 2018?