WHITE PAPER Future of logistics: 5 TRENDS & DEVELOPMENTS 2021 - Kratzer Automation

WHITE
       PAPER
       Future of logistics:
       5 TRENDS & DEVELOPMENTS 2021

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2    Logistics trends 2021

WHITE PAPER
�FUTURE OF LOGISTICS�

  FIVE TRENDS &
  DEVELOPMENTS FOR
  2021

Logistics is breaking free from the spell of the Corona pandemic. Many transport companies and freight carriers
have not yet won the battle. But despite two lockdowns, the year could have been worse from an industry-wide
perspective. This is mainly down to the fact that some sectors during this period have experienced a boom: First
and foremost, the continuing triumph of e-commerce. This has given courier, express and parcel logistics a new
boost.

One thing is clear: There will be no return to the pre-pandemic period. In fact logistics is likely to take advantage
of lessons learned during this time in order to start the future in a stronger position. In addition, the opportunities
associated with digitalization will be better exploited, and in order to overcome the remaining economic chal-
lenges the customers� needs will be given much great priority: the customer experience must be raised to a new
level. In the meantime, decision-makers in the industry will also put other established topics back on the agenda
during the course of the year: For example, the question of how sustainability goals can be achieved and also how
carriers can operate in the best possible way from an economic point of view.

Logistics trends 2021           3

1. EXPERIENCES FROM THE
CORONA CRISIS

Logistics have learned from the developments during the pandemic. The management of crisis situations has
become much more important: Logistics experts are aware that they must be able to react at the highest possible
speed in the face of globalized supply chains. Even when borders are closed or international flows of goods are
restricted, it is important to remain responsive.

However, it is equally clear that the digitalization push resulting from the Corona pandemic will have a significant
impact on logistics. More and more use is being made of the possibilities of mobile working and through the use
of current technologies, logistics is becoming significantly more mobile. When software is used to monitor and
control processes across the entire transport chain this will lead to: All steps can be controlled online, from any
internet-capable device – anywhere in the world. Dispatching from the home office is therefore already part of
the �new normal�. This also applies to customer service and sales. Increased efficiency is no longer the only argu-
ment worth mentioning for digitalization. In an emergency, the ability to act both quickly and in an informed way
is essential. Changing government legislation and its economic consequences have led to multiple, sudden and
extensive changes in the flow of goods during the various lockdowns. At the same time, contact restrictions and
infection control measures meant that processes based on face-to-face contact and sharing of papers suddenly
became much more difficult. For many organizations, this meant completely changing processes several times.
Those companies that have not invested in digital tools have struggled to cope with these changes and have
found it increasingly difficult to monitor and control the production processes.

4   Logistics trends 2021

2. INCREASING IMPORTANCE OF
THE CUSTOMER EXPERIENCE

Especially in times of crisis and in the face of falling margins and tougher competition, companies put their
purchasing processes to the test. One thing is more important than ever: the focus must be on the end custom-
er. Thus, the experience that the end customer has with the logistics function within an organization becomes
decisive. Optimizing this is not only important in the courier, express, parcel and B2C segments, but is also
important in the industrial/manufacturing environment, where large shipment volumes can be at stake. For the
customer, transparency, reliable deliveries and seamless integration into ordering and production processes
count for much more.

But that is not enough. In the future, logistics concepts tailored to the individual customer will gain consider-
ably in importance: Precise logistics solutions that support the market strategy of the logistics customer are in
demand. Be it a price advantage, fast delivery, the highest compliance standards or that extra special delivery
service processes.

Logistics trends 2021          5

3. SUSTAINABILITY IN THE
SUPPLY CHAIN

Green Logistics: Not an unknown topic, but one with renewed focus. The aggravated problem of climate
change demands new standards. However so far, CO2 emissions from road freight transport have continued
to rise and this also applies to air freight transport. The result is that total transport movements worldwide are
responsible for a considerable share of greenhouse gas emissions. A central problem: the assumption that a
sustainable design of the supply chain and high economic profitability are in conflict with each other. Maybe
this point must be viewed in a different way.

On the one hand, companies are not switching from comparatively resource-intensive transport modes, such
as road, to more economical alternatives such as rail and water to the desired extent. This is primarily due to a
cost-intensive and less flexible infrastructure and longer transport times. For economic reasons, goods continue
to be produced in countries with low labor costs – which means greater transportation of these goods around
the world. However numerous studies have shown that alternatives in terms of sustainability can not only lead
to low carbon transport networks, but even to cost savings. One should think of alternative drives and renew-
able fuels – especially on the last mile. While fossil fuels will become more expensive in the long term, the costs
of renewable energies are likely to fall steadily in the future due to technological improvements and increasing
availability. In many cases, it will only be a matter of time before the break-even point is reached – if this is not
already the case today.

In logistics, economic and ecological interests have always been in complete harmony: optimal capacity utiliza-
tion and efficient route planning reduce both CO2 emissions and costs for fuel and personnel. Green, on the
other hand, is definitely a new factor that is now being actively considered and perused: here, companies are
already successfully combining ecological and economic goals. Efficient construction, sustainable raw materi-
als, optimized energy management. The future potential in this area is significant.

6    Logistics trends 2021

4. AUTOMATION MAKES LOGISTICS
MOBILE

Digitalization is changing logistics from the root. Processes are becoming smarter with increasing automation
and artificial intelligence (AI). The networking of all processes in the transport chain plays a particularly import-
ant role. This lays the foundation for complete transparency, which allows logistics to be optimally controlled.
The goal: all the cogs in the transport chain work together. The real and virtual worlds grow together. This
makes it possible to handle transportation quickly and in a way that conserves resources. Customers are con-
stantly aware of where their consignment is and when it is expected to arrive. Other keywords in the future will
be �autonomous driving� and �drone delivery�. The proof of concept for AI has been in existence for some
time and Logistics 4.0 is no longer classed as a vision of the future. On the contrary, it is likely to be on the
verge of a breakthrough in many areas. The task now is to expand the networking and integration of logistical
processes across all steps of the production chain. This includes not only logistical networks but also production
processes.

The situation is somewhat different with autonomous driving: While this does not yet have a concrete perspec-
tive in road traffic, practical solutions on factory premises or in pedestrian zones are already on the verge of
practicality and are even already available in some intralogistics operations.

Basically however, it is true that more technology does not always bring added value. Instead, the task is to con-
stantly re-evaluate which degree of digitalization really makes sense for the individual company. All require-
ments must be evaluated in order to draw the appropriate conclusions. However, IT managers should always
keep an eye on which new technologies are available.

Logistics trends 2021          7

5. BIG DATA IN TRANSPORT

Review in detail what is happening in the supply chain: This is now possible by tracking data and analyzing it.
We are talking about big data analytics here. These make it possible to find answers to business-critical ques-
tions. Transport companies benefit from this in many areas: For example, to identify errors, to recognize opti-
mization potential or to better serve customer needs. More and more logistics experts are also relying on data
analyses in combination with sensor technology, which in turn is constantly being optimized. This way, they gain
valuable insights into the supply chain. For example, this provides insights into bottlenecks in the warehouse or
time lost during loading. Likewise about vehicles that are not optimally utilized or about problems encountered
during the journey. But that�s not all: with the right tools, prediction of future events becomes just as possible as
the analysis of customer behavior. The keyword is predictive data analytics, and it is in this area where experts
expect dynamic development in the future.

Important for logistics companies: They should develop a concept of how they evaluate and analyze data and
how they can become more efficient and customer-friendly. However, it is not the sheer mass of data that helps,
instead it is the precise analyses of this data that is necessary in order to achieve economic added value. In
particular, it is important to be clear about which data can be used to gain useful insights.

The future is now! With cadis® – the operational Transport
Management System – the challenges of tomorrow will be
the key to your success.”

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