How to Navigate the Digital Disruption in Logistics

The concept of digital disruption in logistics has been reshaping the business since the previous decade. It refers to the use of digital technology and platforms to increase logistics operations' efficiency, speed, transparency, and customer satisfaction.

‍

The digital disruption in logistics has also given rise to a new business category known as LogTech, encompassing companies that provide digital logistics solutions.

‍

According to a Research and Markets study, the worldwide LogTech market was worth 10.6 billion US dollars in 2020 and is predicted to expand to 28.2 billion US dollars by 2028, at a compound annual growth rate (CAGR) of 13.1%.

‍

How will you ride this wave and maximize the potential of logistics technology? Discover through this article!

‍

Innovations in Logistics Technology

The pace of innovation in logistics technology has accelerated in recent years, driven by the growing demand for faster, cheaper and greener delivery of goods and services. Some examples of such innovations are:

‍

The adoption of cloud computing and big data analytics allowed logistics providers to optimize their routes, inventory and demand forecasting. For instance, DHL uses cloud-based platforms such as Resilience360 and Saloodo to monitor and manage risks, disruptions and opportunities in their supply chain network.

The development of smart devices and sensors enabled real-time tracking and monitoring of shipments and assets. Logistics giants like Maersk use IoT devices and sensors to track the location, temperature, humidity and movement of their refrigerated containers.

The rise of artificial intelligence (AI) and machine learning (ML) enhances the decision-making and automation of logistics processes. For example, UPS uses AI and ML to optimize delivery routes, reduce fuel consumption and emissions, and improve customer service.

The proliferation of blockchain and distributed ledger technologies enables secure and transparent transactions and data sharing among logistics stakeholders.

‍

Embrace the Digital Disruption in Logistics

These digital technologies and platforms have given logistics providers, customers, and regulators new opportunities and difficulties. They must address some concerns and methods to handle the digital disruption in supply chain management.

‍

Customer expectations

Customers demand delivery services that are faster, cheaper, more convenient, and customized. They also want more control and visibility over their orders and shipping.

‍

Logistics suppliers must embrace customer-centric methods and deliver flexible and personalized solutions that address their customers' demands and preferences. They must also use digital channels to successfully engage and interact with their consumers.

‍

Amazon, for example, gives Prime membership, which includes free and quick shipping as well as access to additional services like movie streaming, music streaming, and cloud storage.

‍

Competition

The digital disruption in logistics has cut entry barriers while increasing industry rivalry. Digital platforms, startups, and IT giants are upsetting old business structures and bringing novel and disruptive solutions.

‍

Logistics providers must differentiate themselves from their competition by offering value-added services, strengthening core competency, and forming strategic alliances. They must also embrace digital transformation and innovation as a means of gaining a competitive edge.

‍

FedEx, by way of illustration, has invested in new technologies such as robots, drones, self-driving cars, and blockchain to increase operational efficiency and customer experience.

‍

Regulation

Because of the digital disruption in logistics, new regulatory issues and ambiguities have arisen. Data privacy, security, compliance, taxes, liability, and intellectual property rights are all difficulties that arise while using digital technologies and platforms.

‍

Logistics companies must adhere to the norms and requirements in their respective markets and locations. They must also cooperate with regulators and policymakers to advocate for regulatory frameworks that are fair and supportive of the growth and use of digital technologies and platforms in logistics.

‍

For example, Alibaba has worked with the Chinese government to create an electronic World Trade Platform (eWTP) that supports cross-border trade by streamlining customs processing, lowering taxes, and offering financial assistance.

‍

‍

‍

Talent

The digital disruption in logistics has altered the skills and competencies necessary. The use of digital technologies and platforms necessitates the acquisition of new technical, analytical, managerial, and interpersonal skills.

‍

Logistics providers must recruit, retain, and develop individuals capable of adapting to changing environments and capitalizing on possibilities provided by digital technologies and platforms. They must also instill in their staff a culture of learning, cooperation, and invention.

‍

Case in point, DB Schenker has developed a digital academy for their workers that offers online training in areas such as data science, AI, blockchain, and IoT.

‍

‍

Dirox Case Study: LogChain

Developed by Dirox, LogChain emerges as a game-changing ecosystem poised to transform the logistics industry through digital innovation:

‍

Digital Supply Chain: LogChain fosters seamless collaboration across all supply chain entities, harnessing the power of blockchain technology to digitally propel cargo movement.

Enhanced Efficiency: This innovative platform empowers chemical manufacturers and shippers to deliver shipments with remarkable cost and time savings while reducing risks.

Full Operational Visibility: By leveraging distributed ledger technology, LogChain provides all parties involved in a shipment with comprehensive visibility of operations, effectively managing trade data flows, cutting operating costs, optimizing inventory, and enhancing cash flow.

‍

‍

Conclusion

The digital disruption in logistics is an unavoidable truth that cannot be ignored. As much as it is a difficult task, it is also a chance for growth, efficiency and differentiation.

‍

Logistics providers, customers, and regulators may effectively manage the digital disruption in logistics by addressing the concerns and tactics outlined above.

‍

Trust Dirox to handle the complex and dynamic aspects of logistics, let us take care of your logistics needs and challenges with our expert solutions and services!

‍