From A to B2B: Logistics Trends in 2021 (Part I)
We may live in a digital-first world, but we still need (or want), a lot of physical stuff.
That ‘stuff’ has to move vast distances to make it into our lives and homes, following established and well-trodden journeys. Such fulfillment we frequently take for granted, forgetting that most of the tools, clothing, furnishing, technology, and other products we use every day have no manufacturing capability in our home continent.
Recent events, however, from regional lockdowns to vaccine wars to a big ship getting stuck in a small waterway, have reminded us all just how complex global logistics actually is.
Everything from raw materials to finished goods has to be physically transported around the world, in big metal containers. Highly interdependent and contingent ‘just-in-time’ networks and supply chains depend on factors such as stability in geopolitics, economics, and weather conditions, as well as consumer behavior.
The technological innovations underpinning this complexity are subject to continual investment and evolution. Logistics is big business.
This series of articles outlines some important trends to keep an eye on. In part one, we look at green logistics and circular supply chains.
Green logistics and circular supply chains
Environmental changes wrought by climate change are already affecting the availability of materials and resources. With COP26 and the United Nations Framework Convention on Climate Change on everyone’s minds, we can anticipate growing emphasis on the greening of supply chains.
Global transportation inevitably contributes massively to greenhouse gas emissions. So, we're seeing a greater emphasis on solar and electric options - at least for local and last-mile logistics. For longer hauls, huge ocean vessels still guzzle highly polluting heavy fuel oil.
But going green saves money for enterprises. This trend is supported by improvements in smart technology for monitoring every stage via IoT devices. Avoiding waste in water, heat, and electricity—by using remote sensors to instantly adjust inputs everywhere from refrigerated containers to manufacturing plants—helps promote incremental savings that scale and support the bottom line.
As part of the green logistics trend, there is also growing awareness of the impact of raw material extraction, and the need to reuse and recycle. This is leading to an emphasis on circular, rather than linear supply chains. This encourages both consumers and manufacturers to refurbish obsolete products or at least recover elements like rare earth metals, which are costly and polluting to extract.
Disposing of post-consumer waste in this way, often by shipping used-up products like old electronic goods back around the world, can have cost issues—but all trends show that consumers don’t mind paying a bit more for genuinely sustainable products. People are also happy to get rid of things responsibly when it’s made easy for them to do so.
The ESR implications for supply chain go beyond environmental concerns, incidentally. A combination of citizen journalism and global awareness is driving zero tolerance of brands found to have human rights abuses in their products and raw materials. From blood diamonds to modern slavery to child labor, global businesses need to clean up their act fast when any malpractice is exposed.
The next article in this series will look at the Amazon effect.
About the Authors:
Ben Beeching is a marketing professional at enterprise architecture leaders MEGA International. Ben has worked in the technology industry for over 15 years. As a market research veteran and founder of NYC-based B2B market research consultancy firm, Adience, Chris Wells has worked with dozens of companies over the years.
Links:
https://assets.kpmg/content/dam/kpmg/xx/pdf/2021/02/pulse-of-fintech-h2-2020.pdf
https://www.marketdataforecast.com/market-reports/ai-in-fintech-market
https://www.ft.com/content/3fe905e7-8b9b-4782-bf2d-fc4f45496915