The global supply chain must evolve to thrive. That evolution may come in the form of changes in order fulfillment, improving freight efficiency, or going green. And 9 times out of 10, these changes are spurred on by global supply chain trends.
These are also known as globalization trends.
As we prepare to enter a new decade, the logistics world is, likewise, embarking on a new journey – automation, green logistics, and a more transparent supply chain. These are just a few of the globalization trends to watch in 2020. But there are several more that will impact supply chains well into next year.
Let's take a look at some of the top supply chain trends to watch while going into 2020...
A Focus on B2B Partnerships
The goal of most companies that operate in logistics, and really any industry for that matter, is to save money and resources. Whether it’s spending less per shipment or reducing excessive surcharges, supply chain managers spend a large portion of time simply finding ways to reduce costs for both themselves and their partners.
One creative way of accomplishing this daunting task is embracing solid B2B partnerships.
Partnerships, whether it’s sharing full truckload movements with like-minded local companies, or developing strategic alliances with manufacturers and suppliers, help to spread the expense of moving freight to multiple parties. Business to Business partnerships can also help retailers and product manufacturers reach customers through their partners' exposure that they never considered in their initial marketing efforts.
Companies like Amazon are not only expanding their in-house delivery network but also continue to partner with third-party vendors and delivery companies to offer flexibility to their customers.
The concept of a green supply chain has been more of a marketing or socially responsible buzz term than a practical strategy... but times are changing.
Carriers and manufacturers are starting to see the financial benefit of embracing a greener logistics operation. From swapping traditional light bulbs in warehouses to LED lighting to converting to electric-powered equipment, embracing green logistics reduces expenses. The bottom line is that it is not only responsible but it can actually improve profitability.
For the transportation industry, the use of alternative fuels, EV’s or even autonomous equipment are the primary ways of reducing the carbon footprint. Furthermore, new technology is being developed each year that helps to reduce pollution, while discovering better methods of recycling packaging supplies.
Finally, the act of embracing green logistics is a public relations “WIN” for any logistics company. The key is to create a green program that does not impact your ability to provide exceptional customer service.
The Power of Automation in Warehousing
A major trend became extremely prominent in the logistics industry in 2019.
This trend was automation.
Warehouses across the globe seemingly discovered the massive benefit all at once. Specifically, automated tools for picking, packaging, and inventory procurement began to become almost the standard way of operating a warehouse to improve efficiency, safety, and increase order fulfillment speeds, all while saving quite a bit of money.
Toward mid-2019, FedEx announced its collaboration with Siemens and Honeywell to start building and using their own proprietary robotic unloaders. This announcement gave even more strength to the claims that automation is the next big thing.
Tackling Tariffs and Political Uncertainty
Logistics operations across the globe must deal with the reality that politics plays and will continue to play a role in the industry through 2020.
North America is ready to embrace a new trade agreement known as the USCMA, however, political opposition in Canada and the United States is introducing hurdles to making this a reality. The US Congress is officially launching Impeachment hearings, which is delaying any vote to ratify the USCMA. The recent election in Canada has officially split the political power, with Conservatives in Parliament battling the Trudeau administration.
Europe is also facing political uncertainty, with the UK’s pending Brexit, political turmoil in Germany, France, and other nations. Tariffs between the US and China and other foreign nations are also impacting the logistics world, making it more difficult to plan for the upcoming fiscal year.
The key to supply chain optimization and success is knowing which trends are fads and those that are industry-changing. It’s also important to understand whether a trend for 2020 is something that will help or harm your specific business.