05 Jun 2020

Logistics trends beyond COVID-19

The COVID-19 pandemic has had significant and far-reaching impacts on the global economy. The logistics sector has experienced serious disruption related to restrictions imposed to tame the virus and the associated fall in production and consumer demand. Rapid adaptation to changing conditions will help logistics companies rebuild as many countries begin to reopen and restart their economies. However, lingering impacts from the pandemic will be felt across the global logistics industry for some time to come. COREX Logistics explores some of the major trends for the industry in the months and years ahead:


Trend 1. Dumping in the logistics market
Increasing competition for customers will lead to price dumping in the freight market, as the number of goods is reduced, and transport is idle. Many companies will not be able to withstand long-term dumping.


Trend 2. Withdrawal of weak players from the market
In the near future, small and some medium-sized players may be forced to leave the logistics market. Those who have managed to save money in the years preceding the pandemic and have not overburdened themselves with significant obligations may be able to weather the storm and increase their fleet and market share. There is likely to be a period post-pandemic marked by a series of bankruptcies, mergers and acquisitions.


Trend 3. Development of collaborations, cooperation, integration of services
Logistics and service companies are beginning to collaborate, develop unique integrated offers for customers and, as a result, strengthen their joint positions by combining their services.


Trend 4. Rejection of purchases
Increasing demand for fleet repair and maintenance services. 90% of logistics companies will decline to update their fleet due to currency exchange rate growth and the pandemic. This means that services related to repair and maintenance of fleets will be in demand.


Trend 5. Increasing demand for the "combined cargo" service
There is growing evidence of a trend to reduce the number of shipments and increase the number of shipments of combined cargo. Ongoing difficulties in air transportation will shift part of the demand from cargo owners for the transportation of combined cargo. The development of outsourcing will teach market players to fill vehicles and group shipments on mutually beneficial terms. Especially high demand is observed for combined cargo from European countries.


Trend 6. Introduction of the latest IT technologies
Optimization and digitalization of the logistics sector have long been touted as the future of the industry. However, adoption has been patchy at best. The pandemic may act as tipping point to greater utilization of innovative technologies to enhance efficiency and promote cost-savings.


Trend 7. Ordering transportation from a mobile device. The emergence of a separate industry "mobile carriers"
A highly automated logistics chain is now in high demand. Logistics companies need a full range of services that can be accessed via mobile devices. For example, for individuals, Russian Post has launched a new service for sending parcels via mobile app. The demand for mobile services is set to increase significantly in the years ahead. This will require companies to innovate and invest in digital offering which may be challenging in the short-term but is sure to result in lasting and long-term benefits.


Trend 8. Development of domestic cargo transportation and logistics chains
Until recently, most transport was directed at exporting or importing goods, neglecting domestic markets. The crisis has shone a spotlight on the importance of developing domestic production as an alternative to an over-reliance on imported goods. A renewed focus on domestic production will require more attention on intra-national logistics channels.


Trend 9. Increase in outsourcing
The trend of outsourcing non-core processes and services has been in evidence for the last decade. The pandemic and associated economic crisis will lead to a greater focus on outsourcing as a means of achieving cost and time-savings.


Trend 10. Contactless delivery
The pandemic resulted in a shift by many providers to contactless delivery and this trend is likely to last as concerns remain about the spread of infectious diseases. Logistics companies that effectively provide enhanced safety measures in the delivery process and execute fast deliveries will benefit as evidence shows that consumers are willing to pay premium prices for safe and efficient delivery.


Trend 11. Drone deliveries
Demand for drone delivery is likely to significantly increase across the world. Already in operation in regions across Asia and the US drone delivery will become commonplace.


Trend 12. Transferring most of the employees on a permanent basis to remote work
This will require optimization and automation of all business processes in the logistics sector. Involving employees in the company's development by creating platforms for exchanging ideas will help create transparent and well-established business processes in the organization.


Trend 13. Compliance with sanitary standards, disinfection of equipment, vehicles will become the norm and a requirement on the part of recipients
For security reasons, logistics companies will have to continue to comply with sanitary standards as the emergence of further infectious diseases, epidemics and pandemics is highly likely.


Trend 14. The rise of rail
Analysts say that due to the high volatility of rates on air and sea transport, there will be a redistribution of volumes towards land transport, especially on routes from Asia to Europe. Although the borders are open for international shipments, strict checks, quarantines, driver replacements, and other measures can slow down the speed of delivery by road. This opens up new prospects for rail transport and there is evidence that we are set to see a “renaissance” of rail transport as a reliable and stable method of freight movement.


Trend 15. Converting all global logistics events to an online format
The trend for holding most events in the logistics sector in an online format will continue, because this format of meetings, negotiations, webinars, conferences has shown high efficiency. It is likely that many companies will continue to use virtual formats to engage with customers, partners and employees.


COREX Logistics continuously monitors and evaluates developments in the industry to keep you up to date with the latest logistics news and trends. Follow us on social media to stay informed:

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