Very few sectors have been impacted as drastically, and as drastically changed, by Covid as logistics.
The COVID-19 pandemic forced the entire world to move rapidly from offline to online with a heavy reliance on the logistics industry for supply chain goods to industries and finished products to customers. The changes allowed businesses to continue operating despite contact restrictions and other containment measures and customers to access a wide variety of products from the comfort and security of their homes.
Industry experts say with the boom of digitalisation and the resultant speedy growth of e-commerce, the logistics sector will continue to witness rapid adoption of cross-border e-commerce and the introduction of online interfaces and processes as we advance into 2022.
Here is a look at the key trends, most of them technological, that will drive the growth of the sector in the coming year.
Use of AI, ML and automation
Whether in tactical and operational decision-making, routing, fleet optimisation, data analysis, or strategic planning, technology will be inescapable for logistics.
“If there is one lesson to be learned from the pandemic, it is the rules of technology. The adversity of the pandemic has become bearable for organisations with advanced technologies. AI will automate and optimise crucial logistics planning processes: order fulfillment, delivery scheduling, route planning, task assignment, fleet allocation, and more. The use of artificial intelligence, machine learning, and automation will be the best arrangements to drive logistics planning forward in the years to come,” says Saurabh Deep Singla, EVP, and CHRO, Ecom Express, a logistics and warehousing firm.
Today's customers demand speed and efficiency, not just in terms of products, but also in terms of performance. Hence, supply chains must evolve to become faster and more efficient.
Singla says in handling future scales, there is a need for automation to improve efficiency and deliver speed. “This reduces the processing time and at the same time, improves the productivity of the employees. As a result, while the demand for salesforce will continue, the sector will also see many opportunities for niche skills in robotics, technology, data science, and analytics,” he adds.
“The new year comes with new opportunities for the Indian logistics and warehousing sector. Increased application of IoT and AI/ML, data analytics, and automation will be crucial to improve resource utilisation, increase delivery speed as well as provide real-time visibility of shipment. Due to the ongoing impact of the pandemic, certain segments of the industry like direct-to-consumer services, e-commerce and new spurt in new businesses will boom the logistics industry furthermore,” adds Yogesh Dhingra, founder, managing director, and CEO, Smartr Logistics, a trademark of logistics start-up Smart Express Pvt. Ltd.
Rise of contract work model
The rise of the contract work model is an upward trend even with high demand for logistics. Contract work has proven beneficial for both companies and employees. “For their part, employees enjoy flexible working hours, work options, and the opportunity to improve their income through various activities,” says Singla.
Sustainable initiatives are also gaining traction in the logistics sector and many factors need to be considered when industries are concerned with the environment. Logistics companies are slowly and gradually switching to e-Vans, e-Rickshaws, and e-Bikes for delivering orders.
“The use of sustainable energy sources in road logistics and transportation is more necessary than ever, especially in major cities, given the number of vehicles that ply on the roads. In the longer run, EVs will be economically more viable than their ICE counterparts,” says Singla.
Sunjoy Dhaawan, VP- HR, DHL Express India, says this year will push the needle where logistics and supply chains are concerned.
“Through digitalisation, it has taken just a couple of months to change the industry landscape. I think 2022 will be more about advanced supply chains, driver retention, last-mile deliveries, hybrid workplace, and green logistics. Cloud-based systems are becoming popular day by day. At DHL Express, we are also shifting our focus from a traditional to multi hybrid-cloud model. Continued focus on digitalising manual processes for better employee experiences and building greater efficiencies in teams will go a long way,” he adds.
People to remain the greatest assets
Dhaawan says people will continue to be the greatest assets.
Engaging through wellness will be a focus as the pandemic rages on, as well as formulating an employee assistance programme (EAP) to help employees deal with stressors of personal and professional life. This will help to build and maintain a healthy workforce.
Upskilling and increasingly diverse workforce
It is imperative to focus on training and upskilling to improve efficiency and the quality of services in the sector while ensuring process compliance and business continuity.
“The focus will be on delivering engaging training content through audio/visuals, gamification, and simulators to have better outcomes and higher retention. Another key focus will be on hiring more female talent and diverse talent pools such as persons with disabilities. A diverse workforce will benefit any organisation,” says Dhaawan.
Rollout of a hybrid working model
The most obvious focus would be the rollout of a hybrid working model.
Dhaawan says employees are increasingly expecting flexibility from employers that allow them to choose their workspace and working hours. “The rollout of a hybrid working model which will address the operational needs of the business and maintain a flexible work-life balance for employees will be key,” he adds.
Hiring to hinge on better compensation, attractive corporate culture
A shortage of available labour has created problems across the supply chain, with warehouses, long-haul truckers, and last-mile delivery providers all struggling to stay fully staffed along with high rates in transportation and warehousing compared to many other industries.
“Though many of those workers change jobs rather than leaving logistics and transportation altogether, the fact remains that there are not enough employees to go around. So, in 2022, hiring companies in logistics and transportation will continue efforts to attract new talent through better compensation, more attractive corporate cultures, and more,” says Singla of Ecom Express Limited.
As per research reports, the Indian logistics sector is currently valued at $215 billion and the Indian logistics market is expected to grow at a CAGR of 10.7% during 2020-2024.