What developments will we see in the logistics industry in 2016 and beyond?

Written on 23 Dec 2015

The logistics industry is changing fast. New technology, new business models and new entrants to the market are forcing established players to adapt in order to compete and survive – but those changes also bring opportunities. Osborne Clarke advises clients at all stages of the supply chain; below are the trends and developments which we see making an impact on the sector in 2016.

RFID

The dramatic fall in the price of “radio frequency
ID” (RFID) tags in recent years mean that their use in large-scale supply
chains is now feasible. Customers increasingly expect end-to-end product
tracking across the whole supply chain and RFID enables this with greater
effectiveness than ever before. Increased access to data will improve
real-time demand management and fulfilment monitoring. Which leads us to…

Data sharing

Logistics providers, aided by improved technology, have
access to enormous amounts of data regarding production, supply chain,
delivery and sales. Analysing and sharing this ‘big data’ will be an
important differentiator for companies which are able to package and market it
effectively.

Disruptive business
models

The ‘last mile’ area of the supply chain is seeing some of
the most innovative developments in the logistics sector. The entry of
players such as Uber into the market means that more established providers are
being forced to adapt to meet the increasingly demanding expectations of
customers regarding price and delivery timescales. Which in turn links to…

Next day/same day
delivery

Consumers’ increasingly expect short delivery times. A few
years ago, next day delivery was being offered as a ‘premium’ option; now
delivery within even a few hours is a relatively standard offer. The UK is a
world-leader when it comes to online selling; e-commerce accounted for almost
15% of all retail sales (almost £60 billion) in 2015 and the market continues
to enjoy double-digit growth. Providers who can meet these delivery expectations
are likely to enjoy a substantial competitive advantage. These developments
have led to…

Smaller hubs and
more of them

As demand grows for shorter delivery times, businesses are
moving away from the traditional model of large distribution centres. A
greater number of small hubs, placed nearer to cities and centres of demand,
is a growing trend.

The No-Man Van

Driverless vans are to be trialled in Greenwich in 2016 in
a government-funded trial.  Whilst
unlikely to transform consumer delivery patterns, if the trial proves successful
we could see deliveries between warehouses and distribution centres being
made by autonomous vehicles.

Collaboration
between providers

Logistics
providers at all levels are examining new models of innovative co-operation;
and these collaborations are providing opportunities. New entrants are working
with asset-heavy established entities which is providing the scope to upscale and
create new revenue streams. Meanwhile, more and more businesses are looking to
share overheads, data and transport costs. 

Sustainability

Apart from the significant and growing costs associated
with traditional carbon-heavy transport methods and business practices,
demand is increasing for businesses to minimise their carbon footprint on all
sides. The focus of consumers, regulators and governments (particularly in
light of the Paris COP 21 agreement) is on reducing waste and conserving
resources throughout the supply chain.

The logistics sector in 2016 and beyond faces opportunities
and challenges in and from the digital revolution, disruptive business models,
dramatically heightened end-user expectations and an unprecedented speed of
innovation. Adaptation, flexibility and customer focus will be central to
success in the sector.

Osborne Clarke  offers
valuable advice and assistance in the logistics sector; to discuss how we can help your
business, please do contact one of our experts.