Ever wondered what the logistics industry will look like in the next 5 - 10 years?
PwC recently released a report “Shifting Patters: The Future of the Logistics Industry.”

 

PwC identified four key areas of disruption that will have the largest effect on how the sector will look; new customer expectations, new technology,
and new business models and new market entrants.

 

Logistics companies are facing an era of unprecedented change as digitisation takes hold and customer expectations evolve. New technologies are enabling greater efficiency and more collaborative operating models; they’re also re-shaping the marketplace in ways that are only just beginning to become apparent. New entrants, whether they be start-ups or the industry’s own customers and suppliers, are also shaking up the sector. 

 

Consumer Expectations

With things moving faster than ever individuals and businesses expect to get goods faster, more flexibly, and ideally at low or no delivery cost. Manufacturing is becoming 

more and more customized, which in turn is good for customers but hard work for the logistics industry. Add it all up and the sector is under acute and growing pressure to
deliver a better service at an ever lower cost.

 

New Technologies

The intelligent use of technology, from data analytics, to automation, to the ‘Physical Internet’ is how these new expectations will be met. This promises lower costs, improved efficiency,
and the opportunity to make genuine breakthroughs in the way the industry works. But ‘digital fitness’ is a challenge for the sector, which is currently lagging many of its customers in this respect.

 

New Business Models

The dominant theme in this scenario is the growth of collaborative working, which allows the current market leaders to retain their dominance. This could for example see a greater use
of ‘Physical Internet’ solutions, based on a move towards more standardized shipment sizes, labeling and systems.

The sector will see Uber-style approaches to last-mile delivery, to more formal JVs and partnerships at corporate level, the whole sector is redefining collaboration. But much of this is
hampered by inconsistencies in everything like shipment sizes, processes or IT systems.

 

Platform technology has given rise to new business models, often driven by start-ups that enter the logistics industry. New ‘sharing’ business models could have as much of an impact on the sector as new technology. And the industry’s current customers and  suppliers may end up being the biggest new entrants. 

 

New Entrants

Some of the sector’s own customers are starting up logistics operations of their own, and new entrants to the industry are finding ways to carve out the more lucrative elements of the value
chainby exploiting digital technology. New entrants in the form of startups make a bigger impact. The most challenging and costly last mile of delivery, in particular, becomes more
fragmented, exploiting new technologies like platform and crowd-sharing solutions. These start-ups collaborate with incumbents and complement their service offers.

 

As a result of these four disrupters, PwC predicts what they call complex competition. The competitive set evolves in a different direction, as large industrial or retail customers
and suppliers become players in the logistics market themselves, not just managing their own logistics but turning that expertise into a profitable business model. Scale matters: and finally,
in this scenario, the current market leaders compete for a dominant market position by acquiring smaller players, achieving scale through consolidation, and innovation through the acquisition of smaller entrepreneurial start-ups.

 

Source: http://www.pwc.com/gx/en/industries/transportation-logistics/publications/the-future-of-the-logistics-industry.html