14 Logistics Trends for 2023: A Brave New World – Part II

January 24, 2023

The rapid adoption of technology is imperative in transitioning to a New Normal. That’s not the only guiding principle for transitioning to a new era in logistics trends.

Non-technology factors are the flip side of technology in building adaptive, agile, and resilient supply chains. Like technology, geo-politics, economics, globalization, and new business processes can affect customer service, operational efficiency, and revenues.

Let’s get right into the first of the seven new trends and processes you will want to adapt to and/or leverage in 2023.

#7 Logistics Trend: Economics & Global Trade: The rising significance of external factors

Last year, strategic geo-political and economic issues weighed heavily on supply chains. The Russo-Ukrainian war, China’s saber-rattling regarding Hong Kong and Taiwan negatively affected global trade. (McKinsey) And of course, the lingering effects of Covid-19, predominantly in China, affected trade as well. Likewise, inflation, rising interest rates, and continuing employment also disrupted supply chains. Uncertainty and volatility are here to stay.

Why Trending: 

The trend of geo-political and economic issues not only continued but grew in its impact. The size, scope, and extent of this trend matured, making a return to normal business operations more difficult than expected.

Some changes wrought by this trend are structural changes, such as dividing east and west. Trade between western bloc countries intensified. One example is Europe’s increased reliance on the U.S. for natural gas.

Similarly, trade between eastern bloc nations also intensified, especially between Russia and China. Notably, Russia now sells Russian oil to China and other nations in rubles instead of dollars. This decoupling of the dollar is important and represents a structural change that will affect trade for years to come.

Impact if the trend is not adopted:

In this case, your business should pivot and adapt to these strategic challenges.  Failure to do so will leave your business flat-footed compared to its competitors.

You must create new networks, including trade partners and sources of supply. You must make new relationships. And your operations and training must reflect these new realities.  

That’s a lot for any business to digest in a short amount of time. Not taking these strategic issues into account can disrupt your supply chain drastically. At best, failure to adapt will result in hampered operations. At worst, your business may not survive.

#8 Logistics Trend: Integrated Supply Chain Management: Employing multi-channel logistics to achieve next-level performance

Integrated supply chain management can mean many things. Here, we’re referring to integrating different modes of transportation or multi-channel logistics. Flexibility has become mission-critical. So employing multi-channel logistics has become imperative.

Flexibility as a competitive capability arose from the logjams at the nation’s ports. Bottlenecks not seen in decades clogged up supply chains preventing the formerly smooth flow of goods before the pandemic. That includes changing suppliers, providers, and modes of delivery.

Why Trending:

As one of the top logistics trends, this is unfolding because it squarely addresses the need for agile and resilient operations. With the customer as the focus, timely delivery is now paramount. Meeting customer expectations has become a mandatory core capability. So mixing and matching containers/goods to different modes and networks of transportation will only grow in the long term.

Impact if the trend is not adopted: 

If businesses do not adopt the trend of integrated supply chain management, they won’t remain competitive for long. Employing legacy business practices, processes, and workflows won’t work in the new environment. Simply put, legacy operations can’t solve new problems. The new operational environment calls for new ways of doing business.

#9 eCommerce: A game changer shaping the future of logistics and supply chains

As the pandemic imposed restrictions on public gatherings, trade, work in the office, etc., eCommerce helped to overcome Covid’s oppressive restrictions Now, eCommerce is still popular but seems to be leveling off as a logistics trend with the reopening of physical stores. Nonetheless, it appears e-commerce is here to stay and will continue to grow, albeit not at the pace seen in the pandemic.

Why Trending:  

eCommerce will continue to trend because it’s fast, flexible, and customer friendly. eCommerce engages the customer from the moment a customer places an order to the time of delivery. It offers end-to-end engagement that customers have been craving and now have.

Impact if the trend is not adopted: 

eCommerce is a game changer. It changes relationships, processes, and technologies. Drop shipping from the supplier directly to the customer saves time and money. It eliminates intermediate distribution and inventory points with direct shipments to customers. That reduces the associated logistics and financial processes of those distribution and inventory points.

If you don't embrace this trend, it’s like fighting an uphill battle. You will struggle to meet customer expectations.  As customers become disaffected, their loyalty will wane, affecting the company’s brand.

Over time, competing against businesses that integrate eCommerce into their supply chains will become a losing proposition.

#10 Logistics Trend: Supply Chain Risk Management (SCRM): Confronting supply chain disruptions

Risks to supply chains have always been lurking about. Now, risks are more persistent and pervasive than ever. And looking at the food and retail industries alone shows this trend will likely only grow in the future. Therefore, SCRM becomes a clear and overriding trend in today’s operating environment.

Why Trending:

SCRM represents a must-have capability. It reflects the need to ramp up risk management from a passive to an active capability. Cybersecurity alone highlights this need to address risks immediately and proactively.

Impact if the trend is not adopted:

It should be clear that SCRM is indispensable, not optional and not a new concept in 2023 logistics trends. Any business’s existence depends on a robust SCRM capability. Lacking a potent SCRM capability is like fighting with no defense capabilities.

#11 Logistics Trend: Sustainability: Ensuring long-term operational viability

Similar to SCRM, sustainability is becoming a must-have capability. Governments want it. Consumers want it. And now, many of your competitors want it. Your competitors may want to appease governments and consumers. That’s one aspect. Another aspect, however, is that sustainability can give you a competitive advantage.

Why Trending:

Sustainability is trending along with the worldwide movement towards ESG or Environment,

sustainability, and Governance. Briefly, ESG aims to make trade cleaner, renewable/maintainable, and fairer. Hence, sustainability promises to continue to trend in the long term.

Impact if the trend is not adopted:

The impacts of this trend are clear-cut. Not only can businesses lose their competitive edge, but they risk running afoul of laws and regulations. And that can be a showstopper for any business. In short, non-compliance is not an option. Failure to adopt and comply with sustainability laws and regulations can put a company out of business.

#12 Logistics Trend: New Work: Changing how work gets done

Like sustainability, the New Work is not going away. New Work is a loaded term, so let’s define it. Essentially, New Work includes work from home (WFM), working in teams rather than individually, and working remotely full-time or part-time. It’s a new way of working made possible by technology and globalization.

Why Trending:

As mentioned above, New Work fits with other trends, such as new technologies and globalization. It results in work being accomplished across cities, states, and even nations.

Specifically, 24x7 operations were already in existence. But now they are expanding across industries and businesses. Depending on how it is implemented, it can be more productive and cost-effective.

Another reason this trend will endure is that workers embrace the flexibility that remote work/WFM affords. From single parents to those providing elder care, WFM is a necessity. With those potential benefits, New Work will take shape and become an industry standard.

Impact if the trend is not adopted:

Given today’s unemployment situation where many jobs remain unfilled, flexible work arrangements can make a difference. Employers that include various forms of remote work will be more attractive to job seekers.

Although some employers seem to take a harder line on WFH, most competitive businesses have some form of WFH and in-office work that might satisfy employees’ needs for flexibility.

Businesses that don’t offer their employees sufficient flexibility will also race to achieve the productivity and efficiency of companies that have adopted this logistics trend.

#13 Logistics Trend: Customer service: From platitudes to strategic imperative

In the post-Covid world, logistics is all about the customer. It bears repeating: logistics is all about the customer- your customer. Meeting the customer’s needs is paramount over all other considerations.

That’s come about because of technology, which has increased speed and transparency and, therefore, engagement. As technology matures, the customer will gain greater access and a stronger voice in how businesses provide goods and services.

Why Trending:

Spurred by technology, this logistics trend has already been growing. The pandemic sped up that trend. Now, the rise of eCommerce is further reinforcing this trend. With the ability to engage for the moment a customer purchases a good or service to the point of delivery, the customer’s participation will be prominent.

Impact if the trend is not adopted:

This is an indisputable, must-have, next-generation capability. Customer service is not only necessary, but it is also critical to survival. If your business does not adopt this trend in all respects, your company’s survival is at great risk.

The impact could be devastating, destructive, and, at worst, terminal.

#14 Logistics Trend: Strategic Partnerships offer synergies that drive success

Partnerships are an emerging logistics trends. They may not be in vogue yet, but they are growing out of necessity. The complexity of logistics and supply chain operations, the uncertain market environment, and extreme volatility are compelling business, industry, and government to work in partnership.

Why Trending:

Addressed briefly above, today’s operating environment is too complex, too uncertain, and too volatile to navigate without a partner. Taking on the many risks, challenges, and disruptions facing supply chains in 2023 independently is not an option. This is why facing the New Normal falls into the top logistics trends of 2023.

Partnerships between suppliers, shippers, and 3PL/4PLs are more important than ever. When you add governments and customers to this mix, only then can you appreciate the full complexity of supply chain management.

Impact if the trend is not adopted:

As with customer support, partnerships are mission-critical for success. Supply chains have always run on relationships. Now, more than ever, they are more reliant on relationships. The failure to make enduring relationships across your supply chain can render your business ineffective. At best, you will put yourself at a marked disadvantage.

You won’t be able to meet your customer’s basic needs compared to your competitors. Your business will fall short quickly of its goals and objectives if you try to go it alone. Working in partnership represents the New Normal.

Welcome to the Arrival of the New Normal

The new year will not only introduce a plethora of new technologies. It can also streamline business processes that can boost your business' efficiency.

Coupled with new technologies, innovative business processes can reduce complexity and uncertainty. And that will drive change ̶ structurally and strategically.

This coupling of capabilities can foster agility and resilience focused on customer support.

That completes this overview of logistics trends shaping the new reality called the New Normal. The bottom line is that changes will lead to more changes. And they will come at you faster and more frequently.

Transitioning to this New Normal can be daunting. But businesses that embrace the transition to the New Normal will thrive.

At American Global Logistics (AGL), we constantly track trends. We look for their impact on your business, including your bottom line. In doing that, as a customer-focused 3PL, we assess the impact on your customer.

There are two ways to manage this game-changing era. You can transition to the new operating environment on your own. Or you can collaborate with a seasoned partner in embracing the New Normal of logistics trends.

Contact us before you make a final decision. Get the facts about how partnering with us can benefit you.

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