Given the current global consumer market which has seen customers having higher expectations than ever before, supply chains are under immense pressure. Companies need to consistently deliver exceptional services within a reduced timeframe. And at a lower cost! As such, it should come as little surprise that logistics companies in the Middle East, equipped with next-generation delivery techniques, have adapted and developed their key approaches to the market. This is all happening to the benefit of the customer. So if you’re looking for sustainable and more customer-focused international supply chains, read on for 2020 logistics trends to expect and look out for in the upcoming months.
There are three key logistics trends to look out for
With higher levels of consumer demand not looking to decompress any time soon, this article by Bahrain shipping experts will provide you with three key 2020 logistics trends you can expect and need to be aware of in order to stay on top of future global supply chain management methods.
A premium factor in global business strategies around the world is incorporating more sustainable methods into the supply chain. This will prove to be incredibly important when it comes to 2020 logistics trends to expect. Most companies turn to buy buildings and internal equipment based on their eco-friendliness. Four Winds Bahrain needs to stay on top of this trend as well. Now factors such as energy-efficiency and reduction in transportation costs are key considerations. They’re deciding how sustainable these key logistics tools are.
- Logistics companies have fortunately heard the market and are becoming increasingly aware of the importance of eco-friendly packaging and going green. This decision had a great impact on their overall strategy. Which is allowing them to remain motivated to keep the planet green and eliminate pollution where possible.
- Green logistics trends you can expect in 2020 not only help the wider community. They will act as a strategy to enhance corporate reputation. It will also increase customer loyalty and lower supply chain costs in the long term.
II. Tech integration is one of the top 2020 logistics trends to expect and pay attention to
There will be no more cases of customers booking shipments, receiving an expected delivery date and then, for the majority, getting left in the dark. Now modern shipment tracking systems are allowing customers to track the routes of their cargo 24/7. This means you have an enhanced user experience and the overall supply chain system. In addition, the advanced accuracy of GPS devices creates an increase in productivity and more satisfied customers as a result. Because companies have the ability to track the locations of trucks throughout their journey.
What’s also happening now is that companies such as Amazon are testing drone delivery methods, for example. So if you want to stay on top of your supply chain management, it’s vital you stay high-tech. You should continue to integrate technology into your plans for 2020. Evolving with the new 2020 logistics trends means you can expect to be their competition. As opposed to simply operating alongside them.
III. Partnerships are booming more than ever
For most companies, the key focus of their strategies to keep up with the 2020 logistics trends to expect is to minimize the freight cost. But they still need to provide a highly efficient, effective service. Furthermore, third-party logistic (3PL) partnerships are here not only to help reduce costs but also to minimize risks when it comes to shipping cargo. How is this possible for them? In these cases, partnerships have the ability to decrease delivery delays and enhance customer satisfaction.
- The exact way this works is that businesses are prone to outsourcing to third-party logistics companies more than ever. This is one of the main 2020 logistics trends to expect in our opinion.
- Their services will include: online ordering, returns processing, product assembly, product kitting and documentation, and inventory management. By providing these services, third-party logistic partnerships are now building long-lasting relationships with their clients.
- As a result, they have the opportunity to become more profitable. So, to succeed in this sector, third party providers need to look into specializing in a higher number of services in order to prove themselves as valuable.
IV. 2020 logistics trends to expect: Price competition
Have you realized there is a steady rise in e-commerce purchases? That is a huge opportunity within the logistics arena! Big technology companies that have identified this on time have entered the industry with existing scale, money and fleets at the ready. Such companies include Uber, Amazon, and Convoy. These companies have the ability to use their truckload business as a loss-leader, which means they can offer low pricing in order to gain market share. That is why one of the crucial 2020 logistics trends to expect is an increase in price competition among the tech-focused truckload brokerage businesses. This trend will, in turn, cut into margins for traditional freight brokers.
- While a trend towards cost-cutting is clear, the question remains whether it’s sustainable. It is not fair to think that drivers would accept a decrease in wages. And given that there is already a deficit in the number of available drivers, this means the carrier or broker could take the margin hit.
- Large carrier fleets such as Covenant, Swift and US Xpress have all increased driver pay rates in the last two years. That way they wanted to ensure they maintain their driver loyalty. But if smaller carriers or single-operator trucking companies need to continuously accept lower-paying shipments because of the price competition, their drivers could choose to transfer to larger fleets or completely exit the driver workforce.