This first post is part one of a two-part series on the future of logistics. In today’s post, we will cover the four emerging technologies which 3PLs must consider as a part of their service offerings. In the least, 3PLs must understand these emerging technologies so that one day they may integrate into logistics service providers‘ company practices to better serve customers.
The logistic industry is going through a time of rapid and unprecedented transformation. The future of logistics is paved with innovation and technology. It was not long ago that ideas like 3D printing, the Internet of Things (IoT), drone delivery, and augmented reality were things of science fiction. Today, the industry is cautiously adopting these technologies to provide faster, cheaper, more reliable and sustainable delivery. At the same time, their customers – primarily the manufacturers and retailers – are wasting no time urging their 3PL logistic providers to integrate these technologies into their service.
Here is a look at the cutting-edge technologies that are likely to have a lasting impact on the future of logistics and supply chain management, and what they mean to 3PL companies and their customers.
4 Emerging Technologies Shaping the Future of Logistics
3D printing as an idea is not new; it has been floating around for many years. However, it was only in recent years that the idea became a reality. This technology makes it possible for manufacturers, businesses, and individuals to print exact working replicas of parts and products using metals, plastic, composite materials, and even human tissue.
According to 3PL Selection and Contracting Survey conducted by EFT, over 40% of the manufacturers and retailers questioned expect their 3PL providers to have some knowledge/expertise on 3D printing. But what do people who run 3PL companies think about the technology? The EFT study revealed that 19.2% of manufacturers and retailers are already using 3D printing in their businesses. However, only 1.5% can provide expertise knowledge and services. Only 2.6% of those surveyed have comprehensive knowledge and know-how and plan to provide the services, 1.5% have complete knowledge, 12% have some knowledge, and 7.5% plan to have the knowledge and provide services.
The Internet of Things (IoT)
This revolutionary technology allows devices to communicate with each other within an existing internet infrastructure without human intervention. Its application in the future of logistics is expected to increase speed, decrease waste and reduce overall costs.
The study found out that 26.25% of 3PL companies are currently using machine-to-machine (M2M) technology and 46.62% plan to deploy them in the future. When asked about the impact of IoT on logistics and supply chain management, 47% said they believe it will have a tremendous impact while 49% said that it would have some impact. Only 3% said that it would have no impact.
Amazon caught a lot of attention when it announced its plan to use drones to deliver products to customers. Since then, many companies have announced their plan or are considering the idea. But skepticism is still widespread as this use of a new transportation mode in the future of logistics. The study found that a whopping 27.31% of people believed that the chance of drone delivery as a reality in the next 5 – 10 years is very slim. 5.88% think that drone delivery will never happen.
However, not everyone in the study by EFT is so skeptical of drone delivery. 27.31% of survey respondents believe drone application in shipping will occur only in highly specialized areas, such as delivering drugs to remote locations. 36% of respondents believe that there will be some form of drone delivery in 5 – 10 years and 6.3% believe that it will be commonplace in 10 years.
Without a doubt, drone delivery faces many challenges just as every new technology in its infancy does. A significant number of respondents (35.71%) believe that regulatory issues will be the main difficulty while 23.95% believe that it will be safety issues. 11.334% of respondents think that the cost of creating a network will be the biggest challenge, 10.92% believe that it will be reliability issues, 10.08% think it will be weight and size limitations and 2.94% think it will be technology issues.
Thirty-one percent of manufacturers and retailers want to see logistics companies use drones for product delivery. But are the 3PL companies ready to adopt the technology? The study found that only 1.5% of the companies can provide expertise, knowledge and service while 1.5% of businesses have comprehensive knowledge and know-how, and plan to provide the service.
Google’s vision of driverless electric vehicles has had a lot of people predicting that the future belongs to self-driving vehicles. Such a vehicle is equipped with electronic eyes and ears and capable of navigating without human input. Its application in logistics can make an enormous reduction in costs. But are 3PL companies ready for this cutting-edge technology?
The study found that 42% of manufacturers and retailers would like 3PLs to have some knowledge and expertise of driverless vehicles. However, 0.75% of the 3PL companies can provide expert knowledge and service while 1.5% of them have comprehensive knowledge and expertise and plan to provide the service. On the bright side, 12.78% said they have some knowledge, and 6.02% said they planned to have knowledge and services.
These statistics show that while manufacturers and retailers want to see logistic companies adopting emerging technologies, the 3PL companies themselves are taking a cautious step in that direction. However, many of them are willing to learn about those technologies and provide services. What are your thoughts on these four emerging technologies and how they will shape the future of logistics?