The turnover of the global logistics industry was estimated at USD 4 trillion in 2016, accounting for more than 5 percent of global GDP. It naturally follows that any disruption in that industry will have a profound impact on the global economy. It therefore becomes imperative for the industry, consumers and governments across the world to be prepared for the disruptions that technology is going to cause in the next few years.
The evolution of 3D printing is expected to result in decentralisation of manufacturing, with production units likely to move closer to the end market. That means the current scenario of finished products being mass produced and then shipped to users across the world will give way to one where the role of the logistics industry will be increasingly that of last mile delivery.
That naturally means that the existing operating models involving asset-heavy companies will give way to Uber-like sharing models, where the service provider might only be a facilitator acting in partnership with several collaborators. It is probable that startups will play a major rule in facilitating the last mile delivery, which remains a daunting challenge for the industry.
Increased automation will result in further time saving in the future. As it is, technology has evolved to a point where weighbridges and truck scales can capture data even while the vehicle in in motion. Drones provide a viable alternative for last mile delivery of goods. That however, is but the beginning. It is likely that fleets will become semi to fully autonomous in the years to come. Rolls Royce, for instance, recently demonstrated an unmanned commercial vessel that can be controlled remotely.
One possible obstacle coming in the way of greater automation is the regulatory environment. For instance, laws in most countries do not allow (or even envisage) unmanned vehicles. While the necessary technology is rapidly emerging, a critical mass- in terms of the number of countries adopting it- will be a prerequisite for commercial viability.
There are no such worries with respect to another aspect of the logistics industry that is expected to undergo a dramatic transformation: operational control. The Internet of Things (IoT) is currently used primarily for tracking of consignments, however the scope of its applications will expand to hitherto unchartered territory. For instance, IoT can be used for real-time monitoring of the condition of equipment, allowing preventive maintenance, instead of loss of time and money due to machine breakdown.
Another area where technology is expected to cause a paradigm shift in the industry is the use of big data. Experts believe that the logistics industry could make a transition to a data driven industry, where information will assume nearly as much importance as the ability to move the goods. Predictive models driven by big data can help companies predict demand and plan the movement of goods even before the order is actually placed.
There is no doubt about the fact that the above changes will eventually come to pass. The onward progress of technology is inescapable. It is incumbent on the industry and policymakers to contain the socio-economic repercussions of technological disruptions.
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