A cataclysmic change is currently occurring across transport and logistic, but not everyone operating in this area is aware of it! We are currently witnessing new payment methods being offered, generally linked to blockchain. A horde of virtual freight marketplaces and route optimizing software have also appeared on the market. Most of them will fail, but the very fact there are so many coming onto the market shows that there is a real and identified gap, and some will succeed, in current or similar form.
The current battle between Maersk and Amazon for market position shows the movement to all-encompassing door-to-door logistics offerings, with an entirely systemized logistics chain. We are moving away from freight management as currently offered by logistics companies, but where are we moving to? Here are my three predictions for the new age of logistics and transport.
The current battle between Maersk and Amazon for market position shows the movement to all-encompassing door-to-door logistics offerings, with an entirely systemized logistics chain. We are moving away from freight management as currently offered by logistics companies, but where are we moving to? Here are my three predictions for the new age of logistics and transport.
1. Systemization and standardization
Supply-chains as a whole will be even more systemized. This naturally requires greater standardization to ensure the swift and safe transport of goods. The system will not be able to handle significant deviations, so shipping companies will have to work hard to ensure the initial data is correct.
One example of this is Harmonized System codes (HS Codes) for customs. Goods being shipped must have the correct six-digit code in order to clear customs in most countries. New goods, or slight errors, can cause major delays and negotiations over which code is applicable. If a good falls under multiple codes, a ruling has to be made on which is correct, and this code then becomes the de facto code for that country.
Most booking, documentation and tracking systems now use these same codes, hence controlling how the cargo is then defined on manifests and in the trade documents.
2. Personalization
It will usually be possible to customize the supply chain, including the reverse logistics, down to a personalized system. This will allow shippers to swiftly and accurately dispatch these goods to any recognized location at short notice, and return items or packaging as required. It will be entirely commoditized, at minimal cost, and with optimal supply time. There will, however, be major delays and costs for any variation from these specific requirements, and it will be necessary to hire experts to set up the routes in the first place. Adding a new customer or good to your portfolio will require planning, and this will need to be added to the research and development fees, so care already needs to be taken when setting up these supply chains.
3. Exception management
Where goods are customer-made (especially project and engineered goods), where each shipment is individual and seldom repeated, things will soon become more and more difficult. Long term, it is my belief that even these will have to be standardized, to the disadvantage of the final products. Before this happens, when each mine, oil field or heavy industry complex is still individually designed, it will become increasingly important to engage a knowledgeable logistics partner, quickly, to begin engineering the required supply chain and establish a transport envelope and strategy.
As things become more inflexible, so these experts will become more detailed-oriented, looking into the minutes aspect of the move, as well as negotiating with the local government and city authorities through which cargos will transit. This will require detailed local and global knowledge of international trade and customs practices. It will also require logistics and cargo engineering to ascertain these constraints and alternative solutions.
All in all, logistics will become a simple commodity, and all of this will, to a large degree, go unnoticed. When logistics works, no one even notices it. If it's not planned and experts are not used, to quote a line from Jurassic Park (Lost World) 'that's how it always starts. Then later there's running and um, screaming.'
Supply-chains as a whole will be even more systemized. This naturally requires greater standardization to ensure the swift and safe transport of goods. The system will not be able to handle significant deviations, so shipping companies will have to work hard to ensure the initial data is correct.
One example of this is Harmonized System codes (HS Codes) for customs. Goods being shipped must have the correct six-digit code in order to clear customs in most countries. New goods, or slight errors, can cause major delays and negotiations over which code is applicable. If a good falls under multiple codes, a ruling has to be made on which is correct, and this code then becomes the de facto code for that country.
Most booking, documentation and tracking systems now use these same codes, hence controlling how the cargo is then defined on manifests and in the trade documents.
2. Personalization
It will usually be possible to customize the supply chain, including the reverse logistics, down to a personalized system. This will allow shippers to swiftly and accurately dispatch these goods to any recognized location at short notice, and return items or packaging as required. It will be entirely commoditized, at minimal cost, and with optimal supply time. There will, however, be major delays and costs for any variation from these specific requirements, and it will be necessary to hire experts to set up the routes in the first place. Adding a new customer or good to your portfolio will require planning, and this will need to be added to the research and development fees, so care already needs to be taken when setting up these supply chains.
3. Exception management
Where goods are customer-made (especially project and engineered goods), where each shipment is individual and seldom repeated, things will soon become more and more difficult. Long term, it is my belief that even these will have to be standardized, to the disadvantage of the final products. Before this happens, when each mine, oil field or heavy industry complex is still individually designed, it will become increasingly important to engage a knowledgeable logistics partner, quickly, to begin engineering the required supply chain and establish a transport envelope and strategy.
As things become more inflexible, so these experts will become more detailed-oriented, looking into the minutes aspect of the move, as well as negotiating with the local government and city authorities through which cargos will transit. This will require detailed local and global knowledge of international trade and customs practices. It will also require logistics and cargo engineering to ascertain these constraints and alternative solutions.
All in all, logistics will become a simple commodity, and all of this will, to a large degree, go unnoticed. When logistics works, no one even notices it. If it's not planned and experts are not used, to quote a line from Jurassic Park (Lost World) 'that's how it always starts. Then later there's running and um, screaming.'