How the digital revolution is changing logistics
| August 30th,2019

The world is changing before our eyes. Wherever we look, technology is transforming how we live, do business and interact – and logistics is no exception. From connected warehouses to autonomous last-mile delivery services, digitalization is transforming our industry and making it more efficient and customer-centric than ever before. But what does that really mean for the near future? And, with so many options, how do we plan and prepare?

This is where our Logistics Trend Radar comes in. Based on input from over 10,000 logistics professionals and technology experts, this industry-acclaimed tool helps guide strategy and innovation by taking an in-depth look at 28 key trends that are gaining momentum – and set to impact the logistics industry in the years to come.

The evolution of logistics: an industry in transformation

In doing our research, we spoke to a lot of people and reviewed a lot of material. We looked at global megatrends such as digitalization, urbanization, aging populations, and sustainability – trends that will impact the entire industry. We also spoke with start-ups and industry partners about new business models and digital solutions, and with our customers about their future needs and expectations.

The consensus? Digitalization will continue to drive transformation across the industry. And, set against this background, four key elements – customer-centricity, sustainability, technology and people – will define the future of logistics.

Customer-centricity: getting closer to the customer through new business models and solutions

Let’s take a look at the first element, customer-centricity. For providers, this will be key to meeting customer demands for a faster and more convenient logistics experience. As customer expectations increase with the growth of e-commerce, solutions that offer speed, transparency, affordability and convenience – as well as frictionless returns – will become the norm. To stay competitive, logistics providers will have to come up with new business models and customer-centric offerings.

As part of this, omni-channel logistics will continue to be a major trend in retail and beyond. With the B2B online retail market expected to grow to twice the size of the B2C online market by 2021, businesses will also need to intensify their efforts to tap into new online channels. In logistics, key areas of innovation will include the development of flexible fulfilment networks such as FLEXE, inventory visibility solutions, proximity-based cost models for shipping such as and new last-mile delivery solutions.

Thanks to customer demand, we’re also going to see growth in direct-to-consumer shipments of time- and temperature-sensitive goods. This ‘Fresh Chain’ as the report calls it, will require new innovations in the packaging, storage and the delivery of goods such as groceries and pharmaceuticals. And, when it comes to consumers’ every day lives, the ‘Connected Life’ trend identified in the report points to the future integration of last-mile logistics services into smart home environments.

Sustainability: becoming a zero-emissions industry

In the past two years the logistics industry has made bold moves to reduce its carbon footprint. Governments, industries and companies all around the world are committing to reducing levels of CO2 emissions and waste. In waste management, policies aimed at ridding the world of plastic packaging will bring about a transition to eco-friendly packaging solutions. In some countries, sustainability efforts will even involve phasing out petrol and diesel-powered vehicles over the next 10 to 20 years.

Having made a major commitment to becoming more sustainable, DHL aims to become a zero-emissions logistics company by the year 2050 and has made significant progress in the ‘Green Energy Logistics’ trend through the production and distribution of our own fleet of StreetScooter electric delivery vehicles.

With global trade on the rise, ‘Smart Containerization’ will also prove to be an important trend. This will see the standard container evolve into a variety of intelligent, modularized formats that allow for more efficient load utilization. At DHL, we are already testing a new format for urban logistics known as the DHL Cubicycle.

Technology: catalyzing innovation with a cost-performance tipping point

New technologies are coming – and faster than ever. Thanks to cheaper sensors, seamless connectivity, predictive capabilities and more processing power, new innovations will enter the logistics industry at an accelerating speed, making supply chains smarter, faster, more agile, and predictive. Key to this is the Internet of Things (IoT). Thanks to falling deployment costs, IoT will increasingly drive technologies such as smart warehousing, real-time transport visibility and predictive delivery to name just a few.

Yet another key technology trend will be ‘Next Generation Wireless’ solutions. Going beyond 5G, WiFi and Bluetooth 5.0, these tech enablers will add scope and significantly increase internet and data connectivity. In technologically mature markets, these solutions will translate to richer content consumption, decreased latency, better real-time processing through edge computing and management of applications in the cloud. Elsewhere, mobile-first internet will provide the solution of choice.

Now an indispensable part of our everyday lives, ‘Artificial Intelligence’ (AI) also has a huge role to play in logistics. Key application areas include back-office automation, predictive supply chains and a new, AI-powered customer experience.

Best known from cryptocurrencies, distributed ledger technologies such as blockchain will remove significant layers of complexity when applied to global supply chains. Although it is still early days, blockchain could potentially add value by facilitating greater trust and transparency between supply chain stakeholders, and by supporting the automation of administrative and commercial processes in logistics.

People: creating the collaborative human-machine workforce of the future

Despite technological advances, people will continue to play a crucial role in logistics. In fact, as the frontiers of human-machine interaction and collaboration are pushed back, new opportunities will arise for human beings. By making it possible to automate a whole range of repetitive, physically strenuous and labor-intensive tasks, the new technologies will allow humans to concentrate on more rewarding work such as programming and management.

With labor shortages, aging populations and heightened demand for rapid fulfilment posing a challenge for logistics providers in many mature markets, these solutions will also help the industry meet growing customer expectations. Further advances in technology and affordability will enable the eventual automation of key logistics tasks and create new roles for humans. But this will also require logistics providers to come up with digital work concepts capable of attracting and retaining millennial talent, as well as supporting the existing, aging logistics workforce.