How does an election year affect the logistics sector? What effect will Brexit and the new trade agreements have? In this blog we look ahead to the major changes that will shape the world of logistics and transport in 2021. You can read all about the (social) changes that have the greatest impact and the logistics trends that we can expect this year.
Major changes in 2021
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COVID-19 pandemic: The greatest impact on our society at the moment is undoubtedly the pandemic. The corona virus has been around for over a year now, and we still experience the consequences of it every day. A large number of companies are faced with uncertainties and increasing losses. According to Statistics Netherlands, our economy will remain affected by this in at least the coming year.
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Brexit: The United Kingdom’s departure from the European Union has a major impact on the way in which people trade. Since the beginning of 2021, for example, additional VAT has to be paid on goods from the UK or import duties have to be paid, additional actions are required at customs and it is more difficult to provide or purchase services. Brexit will also play a lasting role, which companies will have to take into account and adapt to if necessary.
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Dutch elections: The results of the elections and the new composition of the cabinet always lead to a change in priorities and a possible change in the rules that apply to companies in transport and logistics. This is therefore also a very important factor to be taken into account when looking at how the market is developing.
Technological developments
Before we discuss the trends that will play a major role in transport and logistics, let us consider the technological developments that will certainly influence the market.
Blockchain
Via Blockchain, all components of the chain can be integrated into one platform, which improves transparency and customer service. It can be thought of as blocks that are linked together and can branch out separately, but all connect to one main system. With supply chain visibility a top priority, more and more people are looking to the power of blockchain to meet this need. In addition to transparency, blockchain can also protect the information it contains.
Artificial Intelligence
Artificial intelligence (AI) will play an essential role in making supply chains more efficient. The technology can be used to automate procedures using algorithms based on data from previous processes. AI can also identify supply chain patterns and companies can use this technology to predict purchasing demand and manage inventory.
Automation
Automation makes supply chains more efficient by eliminating human errors. Companies are increasingly using drones and self-driving vehicles to streamline logistics processes. In combination with efficient warehouse management software, robots can drastically improve the productivity of the supply chain. However, the purpose of automation is not to replace people. By delegating simple, repetitive tasks to machines, human workers can focus on more valuable tasks that directly impact business growth and the customer experience.
Challenges
Supply chains are often the least understood part of strategic business management. For example, according to GEODIS, on average only 62% of the companies surveyed have (limited) insight into the logistics chain. 17% had an extensive view and 15% of the companies only had a view of the production of goods. This is very worrying, as supply chain activities account for 90% of total operating costs (Logistics Bureau, 2020).
There are several challenges that businesses face when it comes to their supply chain. Not only do companies struggle with streamlining and optimizing their processes, but also with the following:
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Limited growth
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Increased costs
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Risk management
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Shortages and uncertainties from suppliers
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Stock management
Moreover, it is often difficult to choose where to focus on as a company and which problem to tackle first. This choice was not made just like that, it also requires internal agreement. After all, it is possible that employees have difficulty adapting to new processes, or that co-decision makers disagree with the steps that are being taken.
Expectations and trends
1. Just-in-time
Just-in-time is a logistical principle that means that the customer receives a delivery exactly at the agreed time. This reduces inventory and handling costs. This process can be started with the help of, for example, electrical documents. By eliminating the old-fashioned paper flow, processes are simplified and streamlined. By sharing data within the chain, processes can also be better coordinated. This saves costs and contributes to the reduction of CO2 emissions.
2. Supply chain as a service (ScaaS)
Many organizations still manage their supply chain activities internally. However, it is expected that more and more companies will implement Supply Chain as a Service (ScaaS) models and outsource production, logistics and inventory management.
As supply chain management teams shrink, it is expected that companies will have teams of experienced individuals who focus on strategic decisions to improve the supply chain. With Cloud technology, supply chain managers can then access the data they need.
3. Circular Supply Chain & Sustainability
In this logistics trend, the supply chain is structured in such a way that resources are (re-)used for as long as possible, also known as “return logistics”. Raw materials and items are not finite, but are used over and over again. By organizing the supply chain as a circle, a company saves costs and prevents shortages.
In addition, the government is encouraging companies to produce in a greener way. Besides being better for the environment, sustainable solutions lead to higher profits, a better image and customer loyalty. Many customers prefer green products, 60% are open to paying extra for sustainable products.
4. E-Commerce
As a result of the pandemic, there is a huge change in transport and logistics. The balance between online and physical sales has seriously shifted to online. Consumers are used to shopping online, so it is expected that this will be a lasting change and that e-commerce will only grow more. So it is desirable to take this into account when planning a sales strategy.
5. Data-driven logistics
Transparency and data play an increasingly important role. Customers increasingly want more insight into products and their delivery. With the application of new techniques and technologies, companies can work data-driven and organize processes and activities as efficiently as possible. All parties can also be connected in an easy and accessible way. Given the slow-recovery of the market and all the changes that have taken place, efficiency and additional insights are always welcome.
Would you like to know more about the trends for 2021 or receive personal advice for your company? Feel free to contact us!
