March 11, 2021 Logistics & Supply Chain Trends to Look Out For in 2021

Brexit & COVID19 highlighted the resilience of the logistics industry. At the same time however, it also highlighted areas for development.

The combination of Brexit and COVID19 highlighted the resilience of the logistics industry. At the same time however, it also highlighted areas for development. With that in mind, here is a quick guide to some of the trends which may emerge or grow in 2021.

Elastic logistics

There are many lessons to take away from the pandemic. One of them is the importance of flexibility. This poses obvious challenges for the logistics industry. At the end of the day, transporting goods over long distances requires big, heavy, slow vehicles. It also requires people with specialist training to operate them.

This means that, in the short-term, most of the changes are likely to come from improved use of technology at the ends of the supply chain. Better management of the first and last miles should help to reduce friction and hence waste in the middle.

Improving the efficiency of the first and last miles is likely to require improving the functionality of warehouses. One of the reasons Amazon managed to cope so well with the pandemic is because its warehouses are ultra-high-tech. They make full use not just of automation, but also of smart devices (the Internet of Things) and artificial intelligence.

By contrast, the major supermarkets clearly struggled to adapt to a mass shift to online shopping. Even though they had all been ramping up their online presence and sales, they were still very much dependent on legacy (read outdated) systems and processes. It’s probably safe to assume that they have learned their lesson and that other retailers will be taking note.

Distributed logistics

It’s hard to see how elastic logistics can be implemented without a move to distributed logistics. The pandemic brutally illustrated the potential downsides of relying on a single country to be the world’s manufacturing hub and distribution centre.

China is almost certainly going to remain a manufacturing and distribution powerhouse for the foreseeable future. It is, however, likely to see part of its current operations relocated elsewhere. They will probably end up much closer to the places where they are likely to be bought. This not only reduces a manufacturer’s exposure to black swan events but also improves sustainability.

The move towards distributed logistics seems likely to run in parallel with a move away from the “just-in-time” model. This approach may, technically, be the most efficient and cost-effective way of doing business. Its efficiency is, however, also its weakness. There is no room to maneuver when the unexpected happens (or someone just makes a mistake).

The move to electric

Electric cargo vehicles have been a reality for at least a few years now. China launched its first electric cargo ship in 2017 and DAF started testing pure electric lorries in early 2019. BYD, Daimler, Hyundai, Tesla and Toyota have all started to make inroads into this market.

At least as importantly, the UK government has committed to ending the sale of new petrol and diesel cars by 2035. As has been widely pointed out, this is going to require a massive investment in charging infrastructure. That could resolve the major sticking point for the wide-scale adoption of electric technology in the logistics industry.

Realistically, it’s unlikely that charging infrastructure will expand enough in 2021 to make it possible to run HGVs over long distances. It is, however, very possible that it will expand enough to make it possible to run electric vehicles over the first and last miles. In fact, the Royal Mail is currently experimenting with exactly this.

Electric vehicles may carry a price premium, at least for the time being. They do, however, compensate for this in three important ways. Firstly, they have better sustainability credentials. Secondly, they offer a more pleasant experience to both drivers and people in the vicinity of the vehicles. Thirdly, they offer more potential to harness technology.

The introduction of ALKS

It seems like the UK government really is getting ready to go “all in” on electric. Transport Secretary Grant Shapps has been very public about his eagerness to make the UK the first country in the world to have a mainstream implementation of the Automated Lane Keeping System technology.

Obviously, there is a long way to go before ambition becomes reality. That said, the fact that the government has chosen to press ahead with HS2 shows that it is still prepared to push on with ambitious plans even in the middle of a pandemic.

ALKS is a prerequisite for self-driving vehicles. The government believes that self-driving technology could increase both efficiency and safety in slow-moving traffic. Basically, technology will always stay alert whereas humans can lose concentration.

This has obvious implications for the logistics industry. Right now, the scope for ALKS may be limited since it only functions with electric vehicles. It could, however, lead to the adoption of hybrid HGVs as a bridging solution. At present, it seems highly unlikely that the logistics industry could rely completely on ALKS, but it could potentially use it as a form of assistive technology.

More emphasis on digital

The ongoing move to digital is neither new nor unique to the logistics industry. It is, however, likely to be an ongoing trend for 2021 and probably far beyond. The immediate future is likely to see more adoption of cloud technologies, more emphasis on remote working and training, more use of apps to help drivers and the potential expansion of the use of blockchain and 5G.

Moving to the cloud facilitates remote working. This can be anything from a fallback plan (potentially long-term) to part of the post COVID19 “new normal”. For many businesses, it is likely to be a combination of both. They may not want to go all remote all the time, but they will want to take advantage of the flexibility remote work offers.

For example, permanent employees could work on a hybrid basis while temporary employees worked remotely. Firstly, this would give employers access to a much larger pool of talent. Secondly, it would eliminate the need to set aside space for employees who were only going to be there for a short time (or to cope with overcrowding).

Likewise, digital training is an economical and flexible way of supporting learning. It’s particularly useful when large numbers of employees need to be trained quickly (e.g. at Christmas). It can, however, also reduce the cost and hassle of organizing ongoing vocational training.

About the Author
Fleet Ex are specialists in quality ex-fleet/end of lease trucks and trailers and are global leaders in the trucking industry. Fleet Ex have a true passion for the industry and make it their mission to answer any question customers can throw at them.

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