What are the major digital transformations in the logistics business in 2022?

The process of digital transformation has been accelerating across the business landscape in the last couple of years thanks to the urgency generated by the Covid-19 pandemic. The logistics industry which was quite slow to adapt to new-age technologies is in a hurry to join the bandwagon. The benefits of switching to digitization are so huge that no enterprise can afford to ignore it, except at its own peril.

There are a few digital transformations that are anticipated in the supply chain and logistics segment in 2022. These technologies are expected to improve operational efficiencies and enhance the customer experience.

AI, ML, Data Analytics

Artificial Intelligence can be used to derive useful, actionable insights from Big data by identifying patterns and forecasting demand. This can improve efficiencies by controlling overproduction and excess inventory issues

● Robotic Process Automation in collaboration with AI helps in process automation and reduces repetitive back-office tasks freeing up resources to handle critical tasks.

● Data analytics helps in the optimization of vehicle routing which is critical for logistics. Analysis of live traffic data helps in scheduling routes and reducing the carbon footprint.

● Process mining helps to identify the root cause of delays and address the issue. This is crucial for logistics as the motto is timely delivery to the customer.

Process Automation

● The Robotics Process Automation is a boon for warehousing solutions. It eliminates human errors and improves operational efficiencies. This market is expected to grow to a staggering $ 50 billion by 2030.

Internet of Things

● The Internet of things offers multiple solutions to solve issues along the supply value chain

● Sensors at nodal points can help to track consignments and provide real-time updates.

● Radio Frequency identification technology is being used by many logistics companies to improve end-to-end visibility.

Blockchain Technology

● Blockchain technology offers complete transparency in the supply chain where information can be accessed by everyone in the chain but cannot be tampered with. This trend is likely to pick up in 2022.

● Investments in this sector are expected to pick up as people understand the extensive benefits that this technology can provide.

● The global blockchain market is expected to grow 100x to reach $163 billion by 2027.

● The increased transparency in the supply chain due to the use of blockchain technology will lead to better carbon emission disclosures from stakeholders in the supply chain. This will help to achieve the environmental and social aspects of the sustainable development goals.

Cloud Computing

● Cloud computing is fast becoming the most popular technology as it provides uninterrupted access to data which is critical for the logistics industry. Cloud computing reduces heavy server installation costs.

● Collaborative working by business partners becomes feasible on the cloud with data sharing in a safe environment.

● A switch to cloud computing can help to reduce the company’s carbon footprint.

The logistics sector is poised to undergo a radical digital transformation in 2022 if it has not already done so. The use of technology will help logistics providers to provide real-time quotes, reduce paperwork by automating the back-office, real-time tracking to monitor consignments and redeployment of resources to handle more critical tasks. With e-Commerce on an explosive growth trajectory, the logistics sector which is the lifeline of e-Commerce cannot afford to ignore cutting edge technology to stay ahead of the curve. Exciting times are surely ahead for the logistics sector as they shed their traditional mode and switch to modern digital technologies to improve efficiencies and offer a superior customer experience.

We have always been a firm believer in owning and operating the fleet vs the aggregation model for operating in the organised sector as it allows complete control over the E2E operations. Further, with RBI keeping the repo rate unchanged & the borrowing cost at an all-time low, it is more lucrative to own and operate. The other aggregators are moving to this model or relying on large players like us for the deployment of the vehicle because of accountability and reliability factor.

 (Author of the article is Manish Bindal - CEO of Trans Cargo)