14 Logistics Trends for 2023: A Brave New World Has Arrived – Part I

January 20, 2023

In today’s post-Covid world, only the fittest supply chains survive. And technology may be the answer to survival. As it happens, logistics and supply chains lend themselves to new and emerging technologies and logistics trends. Many supply chain functions promises to improve operations through rapid technology adoption. They include data storage and sharing, communications, end-to-end (E2E) visibility, and cost reduction.

That makes the adoption of technology not only desirable but also imperative. Of course, technology is only one aspect of the transformation that is underway. However, it is important because it is foundational to redesigning smart supply chains.

What are smart supply chains?

They are responsive meaning they are adaptive, agile, and resilient. These three capabilities can help to improve customer service and support, operational efficiency, and revenues.

This post will focus on seven technology trends, either existing or emerging. Next week we will cover seven business-related trends shaping supply chains in 2023.

Let’s get right into the first of the seven technologies you will want to leverage in 2023.

#1 Trend: Adoption of Cloud Technology

One of the more popular choices among businesses

  • Useful: Helps solve the E2E visibility problem (more on that below)
  • Mature/maturing technology ripe for exploiting now
  • Results in tangible benefits, operationally and financially

In fact, the benefits are substantial offering enhanced cost savings, security, sustainability and more.

Why Trending:

  • Targeting low-hanging fruit can secure relatively quick gains
  • Makes complexity more manageable by enhancing adaptability
  • Impactful to customer service and support through increased reliability

Impact if the trend is not adopted:

  • The logistics industry is moving forward at speed, leaving competitors behind
  • Non-adopters and laggards will fall lose revenue and market share
  • Non-adopters and laggards will lose their competitive advantage

#2 Trend: Big Data and Analytics

  • Another popular choice for rapid adoption
  • Not beginning from nothing - already in use in varying levels
  • Tangible benefits to performance and the bottom line

Why Trending:

  • A first step in moving to data-based decision-making
  • Improves effectiveness and efficiency enhancing business value
  • Supports risk reduction/control, agility, and resilience

Impact if the trend is not adopted:

  • Promotes data-driven decision-making, as the businesses digitize their business processes
  • Failure to adopt big data now will affect sales, revenues, and market share

Now is the time to adopt big data and analytics to reap these benefits as supply chain disruptions have leveled off. Disruptions will likely continue and may increase, making this lull an ideal time to embrace big data and analytics.

#3 Real-Time Supply Chain Visibility (SCV)

Supply chain visibility promotes quick responses to disruptions thanks to the use of real-time data. Data informing E2E visibility include traffic patterns, weather, and road and port conditions. These data points across the supply chain give visibility formerly not available. Add to that the employment of real-time data, which facilitates agility and resilience.

Why Trending:

In a word: efficiency. Real-time visibility enhances responsiveness to customers’ needs and changing conditions. It also promotes supply chain integration and synchronization that enhances operations.
Also, as with robotics (discussed below), the technology is available now. Real-time data allows companies to keep their finger on the pulse. Supply chains are all about flows. And being able to track flows and unexpected disruptive events is mission critical.

Impact if the trend is not adopted:

Failure to adopt this trend will disadvantage any company compared to early adopters. Today’s world depends on rapid adaptability, which supports both agility and resilience.
It represents a foundation for the transformation of logistics and supply chain management. Omitting this building block will hamper modernizing businesses, risking their survival.

#4 Trend: Blockchain

This is a breakthrough technology that has great utility for logistics. It is an untapped resource that can revolutionize logistics.

Why Trending:

Benefits to logistics and supply chain management are plentiful. They include:

  • Improved accuracy, oversight, and transparency
  • Advanced risk reduction
  • Enhanced security

Blockchain is an emerging technology that can promote agility and resilience and facilitate data-based decision-making.

Impact if the trend is not adopted:

  • Same as with other technology trends explained above
  • Customer service and confidence/loyalty will suffer over the long-term
  • Lack of transparency and tracking ability will concede benefits from to early adopters

As an emerging trend, the potential of blockchain technology is not fully realized. Yet early adopters stand to make significant gains. And laggards will fall behind eroding their competitiveness over time.

#5 Trend: Artificial Intelligence (AI)

Automation/digitization is the wave of the future. Covid-19 accelerated this nascent trend. Now this logistics trend is taking off because it addresses key supply chain weaknesses.

By 2026, Gartner estimates more than 75% of IT supply chain management companies will deliver advanced analytics (AA), artificial intelligence (AI), and data science solutions.

Why Trending:

  • Facilitates proactive logistics by spotting issues before they become problems
  • Helps cut costs and raise risk awareness improving daily operations
  • Supports data-based decision-making
  • Enables agility and builds resiliency

AI will help improve, streamline, and optimize supply chain operations buttressing this trend.

Impact if the trend is not adopted:

  • Puts your business at a disadvantage by operating under legacy technologies
  • Will continue to operate with wasteful processes that thwart agility, and resilience
  • Will likely render your business uncompetitive compared to your competition, as prospects/customers seek to do business with more technologically advanced 3PLs/4PLs.

#6 Trend: Robotics 

Robotics is no longer a future capability. It exists now and is becoming more easily adoptable.

According to “Gartner by 2026, about 75% of major enterprises will have introduced and implemented some kind of robotic solution in their daily warehouse activities.

As warehousing becomes more sophisticated, efficiency and agility will drive results-oriented operations. Investing in robotic process automation (RPA) reflects a major shift that can give you a competitive edge.

Moreover, the use of RPA helps to optimize business processes and reduce costs. Additionally, robots are not constrained in how many hours they can work. That means competitiveness will intensify with 24x7 operations. 

Other benefits RPA offers include improved safety and fewer errors. That alone results in more efficient and effective operations. Listed below are several functions robotics offers businesses today. 

  • Storage and retrieval of inventory from racks
  • Receipt and storage of inventory items
  • Internal movement of inventory items
  • Order picking to fulfill customer orders
  • Transportation of inventory items

Why Trending:

Robotics is trending now because the underlying technology is at a tipping point as a logistics trend. It is ready for implementation in various forms now. Also, you can implement RPA in intermediate packages, taking a building block approach. That reduces the complexity of implementation and training, while also reducing costs.

Impact if the trend is not adopted:

Failure to adopt any available technology will put any business at a disadvantage. That is especially true for RPA technology because of its immediate utility. Late adopters will also endure stiffening competition as they cling to legacy operations. 

#7 Trend: Automated Vehicles and Electric Vehicles (AVs and EVs) 

AVs and EVs are part of a larger megatrend: The growth and dominance of technology in business. That is because it addresses both performance and cost issues. For example, AVs and EVs address the persistent driver shortage and economic issues like recession and inflation. Automation makes these immaterial. At present big retailers like Walmart have adopted AVs. 

Electric vehicles will also offer a more eco-friendly and economical solution to transportation. This trend is growing because of its benefits, which are especially attractive in today’s market environment.

Why Trending:

Electric and autonomous vehicles have other compelling benefits such as:

  • Increased safety through lowered rates of human error
  • Extends driving distances per truck per day, skirting regulatory limits on truckers' driving time
  • Mitigates the persistent and growing worker shortages across supply chains
  • Optimizes traffic flow enabled by efficient fast and real-time communication. (Small Biz Club)

Also, environmental benefits such as reduced carbon footprint will boost AV/EV adoption.

Impact if the trend is not adopted:

Failure to get on board this megatrend is nothing more than a missed opportunity. Companies that adopt AV and EVs now will enjoy the performance, financial, and environmental benefits. 

Companies that are slow to adopt AVs and/or EVs or do not embrace this trend will struggle. 

They will gradually fall behind the competition. Performance will lag compared to competitors. As that happens customer service will likely decline and with that customer loyalty. That will show up in reduced sales, revenues, and market share.

Welcome to a Brave New World 

The new year will introduce a plethora of technologies you can leverage.

Technology will help deliver new capabilities rapidly taking business performance to the next level. 

Introduced and implemented properly, these technologies can reduce complexity and uncertainty. Depending on how and when you implement them, they can be game changers.

These technologies will deliver capabilities that enable improved agility and resilience focused on customer support. 

That is the overview of technology trends shaping the new reality in today’s marketplace. From E2E visibility to improved performance, risk awareness, and cost reduction, a new supply chain is emerging.

It will give meaning the yesterday’s platitudes of faster and leaner supply chain. In short, companies can compete more successfully with the adoption of these technologies.

Remember, next week we’ll cover seven business-related trends shaping supply chains in 2023.

At American Global Logistics (AGL), we track trends to assess their impact. We look for ways you can leverage these technologies to improve your business processes with a focus on customer service.

You can navigate today’s ongoing transformation to a digitized supply chain on your own. Or you can collaborate with an experienced partner in embracing the trends shaping the New Normal.

Why don’t you contact us, before you decide? We would be happy to talk to you about how you can position your company for long-term growth in an uncertain environment. 

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