Logistics Trends to Watch for in 2023

Logistics Trends to Watch for in 2023

Over recent years, COVID caused mayhem in supply chains resulting in severe logistics disruptions, port congestions, and workforce shortages. A Gallup survey shows that  60% of US consumers felt the impact of supply chain disruptions. As everyone is emerging from this crisis, it’s time for the recuperation of logistics. Driven by uncertainty, newer logistics trends […]

Over recent years, COVID caused mayhem in supply chains resulting in severe logistics disruptions, port congestions, and workforce shortages. A Gallup survey shows that  60% of US consumers felt the impact of supply chain disruptions. As everyone is emerging from this crisis, it’s time for the recuperation of logistics. Driven by uncertainty, newer logistics trends are rising on the horizon. The shipping industry is revolutionizing and developing strategies to reduce costs and increase customer satisfaction. 

The pandemic also changed consumer preferences, with more shippers wishing for fast delivery. With the rising popularity of online shopping and the need for construction operations like real estate development worldwide, shipping companies must act smartly. Moreover, carriers are taking innovative approaches to sustain their operations in the long run. In this post, we’ll discuss the top logistics trends to watch for in 2023. 

Top logistics trends to look for in 2023

Top logistics trends to look for in 2023

From the continuous challenges faced by the shipping industry, we can determine the following logistics trends to expect in 2023:

Expanding logistics services 

Shipping companies are investing heavily in logistics services to gain a competitive edge in the market. They are also investing in the services’ execution to provide high value for customer satisfaction. Today customer demands are evolving. People want high-end services and more choices in modes of transport. 

Therefore, shipping companies are now including a wide range of upstream and downstream services and transport options in their portfolio. They are also expanding their existing services in different locations to support growing customer demands and increase their revenue channels.

This is the perfect time to create business models like outsourcing labor to minimize the capital investment for new services. This is why service expansion makes it to the top of our list of the logistics trends you should not miss in 2023.

For the deployment of these services, logistics firms are looking for consultancy firms to ensure that the implementation goes smoothly. They are also beginning to invest smartly in offshore businesses and technology to increase their ROI.

Increased mergers and acquisitions

During the pandemic, many logistics companies gained revenue growth due to high demand, attracting many equity firms in the process. Driven by the state of the economy and uncertainties arising from the post-pandemic crisis and Ukraine war, most shipping companies are looking to outsource their businesses. 

Therefore, mergers and acquisitions are expected to increase in number during 2023. A 2022 report by PwC shows that the merger and acquisition activity will continue to grow in the logistics industry in the upcoming years. 

Strategic acquisitions are already gaining in number, with large businesses continuing to buy smaller logistics firms to gain new customers and service offerings. Mergers and acquisitions also bring workforce optimization, more control over the supply chain, increased customer outreach, and shipping services. 

Digitalization of logistics services

Shipping companies are digitizing their platforms to improve transparency and provide greater visibility to customers. According to Allied Market research forecasts, the global digital shipping market will grow at a 23% rate over the following years. 

Digitization will provide the opportunity to track shipments, view and upload documents, and find competitive rates online. Other benefits of digitization for logistics brings the automation of tasks, the ability to measure and fulfill supply demands and centralize and analyze data on one platform. 

The Digital Container Shipping Association states that if all logistics businesses digitized their Bill of Lading, they could save around 3.6 billion per year. Besides, digital platforms logistics companies are also adopting digitization trends that adapt to all working conditions.

In the upcoming years, shipping businesses may deploy robots in warehouses to load and unload cargo. Self-driving delivery vehicles may also become a vital part of the supply chain. Furthermore, self-operating forklifts may also become operational for lifting and loading heavy equipment. 

Adopting remote work options

The COVID pandemic changed the global employee working pattern, leading to the demand for remote work. It was a popular option during the pandemic and is still essential in attracting more workforce. 

Whether it’s a shipping company in South Africa or the USA, the remote staff is putting pressure on logistics companies regarding employee retention and scaling teams.

But retaining the workforce was already challenging before the great resignation and pandemic. Now it’s even more difficult. The major drawback of a mobile and remote workforce is that the workers can quit even at the drop of a hat. 

Another issue is that companies invest a lot in training, and employee relocation strains HR as they are continuously looking for new talent. However, shipping companies are using many tactics like adopting off-shoring and improving workplace culture to retain talent. 

They also have to make more efforts, such as investing in benefits, incentives, and compensation to retain the employees and avert their relocation. 

Outsourcing to deploy newer technology

Other than the need for a remote workforce, shipping companies are deploying newer technology for data analytics, automation, and digital transformation. But this implementation requires skilled teams who can make the most out of technology to provide high-value services to customers. 

They must also have the skill to solve consumers’ issues. However, there is a severe lack of IT talent in the USA, so logistics companies usually outsource a consultancy agency to hunt for skilled workers. The agencies help in the implementation of newer technologies and the onboarding of new staff. 

Implementing AI for micro-training

Artificial Intelligence is the new norm for companies looking to optimize their employee training and professional development process. It is also the fastest-growing technology. A NewVantage report states that out of ten, nine businesses are using AI for their operations. 

In the upcoming years, AI will become crucial to the HR process of logistics businesses worldwide because of its time and cost-saving advantages. A Gartner report states that by 2025 Artificial Intelligence will write 20% of the employee training content.

Logistics firms always look forward to achieving resilience, quality, and speed in their operations. But as they are the busiest companies in the world, they don’t find enough time for upskilling and additional training. 

That’s why most of them wish to adopt micro-training technology in 2023, as it dramatically reduces time in onboarding employees and reduces operational inefficiencies.  

Sustainability for minimizing climate disruptions

From heat waves in Europe to a scorching summer in China, climate disruptions are evident. Governments across the world are emphasizing decarbonization in every wake of life. Logistics firms are feeling the impact of climate disruptions like inclement weather disrupting supply chains. 

According to the Sustainable Freight Buyers Alliance, ocean transport accounts for 8% of global CO2 emissions, which will increase to 42% by 2050 if not taken care of.

Therefore, the need for sustainability is becoming increasingly vital. Shipping companies are already adopting decarbonization-oriented approaches with the aim of reducing pollution and the emission of harmful gasses to the general public and consumers.

In the bid to achieve sustainability goals, logistics firms can shift to electric vehicles or alternative fuels for larger delivery vehicles. Also, the use of solar energy is another sustainable aspect to implement in logistics operations. 

Higher visibility in supply chains

Digitalizing operations also increases the ability for surveillance and to gain insights into logistics data. Supply chain laws are changing over the globe, requiring the shipping industry to provide higher visibility across its supply chains.

The laws also demand that logistics firms adopt sustainability and adhere to human rights regulations. For instance, the Supply Chain Law introduced in 2021 in the EU requires shipping companies with a workforce of 3000 to make efforts to avert child labor. 

It also obliges the companies to avoid inadequate labor protection, exploitation, and discrimination at all costs. Moreover, the bill’s prerequisites cover environmental protection such as air pollution, water contamination, and inappropriate pesticide use.

As pressure is mounting to provide higher supply chain visibility, sharing data has become a requirement. In 2023, the need for transparency will push the shipping industry to integrate real-time data in its end-to-end operations.

Shipping patterns are getting regular

The logistics industry is volatile and requires adjustment to keep the business consistent. During the pandemic, it was pretty challenging to find vessels for shipments. Shipping cycles were also hard to predict. 

For instance, the closure of many ports in South Africa made sending machinery to this region very difficult. Therefore, shipping companies rerouted heavy equipment shipping to Namibia, deciding to send all the region’s designated shipments to the Port of Walvis Bay.  

Strategically located along the coast of Namibia, this port acts as the gateway to international trade. It is also expanding over the recent few years, with the Namibian government adding more terminals to increase its container handling capacity. As of now, the Port of Walvis Bay can support 750,000 TEUs annually.

Though the global economy is still in shambles, shipping patterns are returning to normal, and now brokers and shippers have more choices in carriers. The pandemic brought an influx of smaller carriers whose quality was dubious. 

But as there was a shortage of vessels, the brokers and shippers were forced to hire lesser-quality carriers. However, this is not the case anymore. With stabilizing capacity, brokers and shippers have regained the ability to be more selective about their choice of vessels. 

Ports are also becoming better at handling backlogs so customers can expect to receive their deliveries faster. Compared to the pandemic days, the average cost of container shipping is also falling. 

Though supply chain disruptions can still affect maritime transport, consumers can now benefit from lower shipping costs. This is due to the declining container shipping costs and port backlogs. 

Working with third-party logistics suppliers

In 2023, shippers look forward to partnering with third-party logistics suppliers (3PLs) to scale up their businesses. According to Grand View Research analysis, third-party logistics services may grow at a compound annual rate of 8%, especially in the Pacific Asia region. 

Shippers are hiring 3PL services because it saves time, and they can enjoy lower rates due to pre-negotiated contracts. The third-party logistics suppliers help accommodate frequent and longer route deliveries and mitigate the risk of shipping amid economic unpredictability. 

They also prevent shippers from accumulating surcharges because of their partnership with numerous carriers. Shippers and businesses will continue to outsource their internal logistics with 3PLs for the upcoming years. This partnership allows them to test new areas and learn foreign market rules without putting in any effort.

Logistics Trends in 2023: The Bottom Line

Logistics Trends in 2023

2023 is beginning, and the logistics industry is coming out of the predicament COVID and the Great Resignation pushed it into. The shipping industry is striving to adopt smart solutions that adapt well to different working conditions and sustain their operations in the long run. 

Many trends are coming to the forefront with the logistics trends to watch for in 2023, including increased mergers and acquisitions, outsourcing, and off-shoring. The logistics industry is adopting digitalization to provide better supply chain transparency and AI to reduce its workload. 

Moreover, the shipping patterns are normalizing, and port congestions are clearing, leading to lower transportation rates. Individual shippers and businesses are also partnering with third-party logistics suppliers (3PLs) for faster and more secure shipping services. 

As a 3PL service provider, AFL holds an NVOCC license that simplifies the entire logistics process. Our company offers customized shipping options and can book the best carrier for you at competitive pricing. 

We believe in open communication, and our digitized operations further enhance our transparency by offering real-time shipment tracking. Our experts can handle your shipment, customs clearance, and documentation processes, leaving you with no burden to bear. 
We adopt only the latest technology and smart solutions to provide better and faster shipping services. You can contact our customer service regarding any query related to ocean and inland transportation. Get your free shipping estimate today!


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