The logistics industry plays a vital role in supporting global trade. In 2023, the industry was valued at 8.96 trillion US dollars, a figure that is expected to grow to 21.91 by 2033. As customer demand increases, technological advancements are becoming essential in enhancing operational efficiency and customer satisfaction.
On average, a shipment travels through 12 touch points in a supply chain. While supply chains historically relied on manual processes and different systems, advancements in technology are enabling global supply chains to become more operationally efficient and provide greater customer satisfaction. In a report by EY, it was stated that the pandemic has been a major factor in contributing to the fragility of supply chains; consequently, there has been an increase in the use of digital systems and solutions. This includes technologies such as artificial intelligence, machine-learning and real-time tracking which have helped businesses respond faster to disruptions as well as being able to meet increasing customer demands. These innovations are essential for the e-commerce and pharmaceutical sectors.
Piece-level tracking, which enables the tracking of individual boxes as opposed to only tracking the shipping container, uses these innovations and, as a result, helps mitigate risks and increase customer satisfaction. This has been transformative in the logistic sector, especially in industries like pharmaceuticals and e-commerce. In the pharmaceutical sector, tracking systems are essential as many shipments require strict control of temperatures, meaning even the slightest change in temperature causes products to be unusable. Furthermore, as customer expectations increase, ecommerce businesses compete to provide an efficient and quick service.
An example given in the Financial Times is Cathay Cargo, a leading air cargo solutions operator, who upgraded its courier service to offer customers more logistical insight. Their solutions team work closely with customers to identify challenges while their tech team develops tools to help solve these challenges and meet the needs of customers. For example, its Ultra Track system enables the monitoring of temperature, humidity and light exposure.
Despite these technological advancements, fragmented systems, regulatory challenges, and disparities in the level of technology adoption pose challenges, leading to slow progress in the industry. Standardising across supply chains enables more streamlined communication between stakeholders, however, this is still yet to be applied throughout the whole industry.
Emerging technology, such as autonomous vehicles and robotics, will further increase operational efficiency, meaning in order to meet future challenges, investment is needed in sustainability and digitisation. In addition, the expanding middle classes of developing nations will mean there is heightened demand for goods and services, which will lead to an increase in global shipments. As the industry continues to evolve, innovation will be essential in ensuring logistic companies can meet increasing demand and face future challenges.
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