Disruptive Delivery: Is this the Future of Logistics?

The logistics market reached nearly $5 billion in 2020 and shows no signs of slowing as COVID curbs begin to ease and businesses get back on track. But, while some parts of our lives resume normalcy, we continue to face lasting supply chain disruptions, debilitating port congestion, and changes in consumer behavior that have fundamentally changed the way logistics service providers need to operate.

In modern times, it seems as though disruption is the new normal, and change is the only constant.

As a result, companies in the logistics sector must build in the capability to respond on-demand as changes continually occur. But what does this look like in practice — and how can logistics firms bridge the gap between existing supply chain management processes and evolving expectations?

 Key Takeaways

• Defined by PWC as the Physical Internet (PI), digital/physical hybrids like drones and industrial robots have become critical components of success — but making the most of these solutions demands both increased staff skills and improved business strategy.
• Despite diversified competition, PWC also points to increased collaboration among companies as they look to share the burdens of customer expectations and reduce overall complexity while simultaneously lowering total costs.
• Cloud-based solutions from Magaya can help logistics service provides capitalize on new trends and evolving futures by providing the real-time, on-demand operations and insight required to compete at speed in disruptive market scenarios.

Changing the Game: Four Key Trends That Are Disrupting the Logistics Industry 

A recent PWC report — Shifting Patterns, The future of the logistics industry — examines four areas of disruption that are fundamentally changing the way service providers operate. They include:

• Customer expectations

While pandemic pressures expanded product manufacturing, acquisition, and delivery times, customer expectations increased. Informed by the always-on connections of cloud-based e-commerce sites and the low- or no-cost shipping offered by retail giants, customers compelled the manufacturing industry to provide more customized product solutions. But, as noted by the PWC report, this created challenges for logistics firms, which are now tasked with providing ever-better service at ever-lower costs.

• Evolving technology

From drone delivery and automation to predictive analytics and improved information security, emerging technology is the cornerstone of digital logistics disruption. Defined by PWC as the Physical Internet (PI), these digital/physical hybrids have become critical for success — but making the most of these solutions demands both increased staff skills and improved business strategy.

• New industry entrants

Technology has also opened the door to new industry entrants in the form of specialized and online-only startups. These new businesses come with the benefit of reduced overhead and carrying costs but also introduce new competition into the market.

• Increased collaboration

Despite diversified competition, PWC also points to increased collaboration among companies as they look to share the burdens of customer expectations and reduce overall complexity while simultaneously lowering total costs.

Considering Future Outcomes for the Logistics Industry

Based on these disruptive global supply chain trends, the report speaks to four possible future frameworks that could emerge depending on how collaboration and competition evolve:

1. Piecing out the PI(e)

In this scenario, PWC sees collaboration as the driving industry force. Underpinned by advanced PI solutions, supply chain professionals may collectively choose to standardize shipping, labeling, and systems operations, in turn improving interoperability while allowing market leaders to retain their position at the front of the pack.

2. Shaking up the status quo

It’s also possible for startups to take the reins with new approaches to logistics. Consider the last mile, which is often the most complex and costly part of logistics services. If startups are able to apply cloud computing and crowd sharing models to last-mile management, they may be able to capture significant market share by collaborating with incumbents to offer specialized services.

3. Logistics-as-a-service

In this case, large industrial or retail businesses make the move into logistics using a combination of industry expertise and evolving technology. While this comes with the potential to force out smaller freight forwarder firms, there’s a more likely outcome: By leveraging the scale of their infrastructure, larger providers may be able to offer logistics-as-a-service solutions that complement the operations of smaller providers and help them stay on budget.

4. Success through scale

Here, big players get bigger by acquiring small startups and entrepreneurs. This is a common business model in the logistics technology industry, which often sees small companies with innovative products or solutions snapped up and absorbed by larger digital entities. Scale of service is created through the consolidation of multiple corporate entities, while innovation comes from the acquisition of forward-thinking startups.

How Magaya Can Help Logistics Service Providers Future-Proof Your Operations

Cloud-based solutions from Magaya can help logistics service provides capitalize on new trends and evolving futures by providing the real-time, on-demand operations and insight required to compete at speed in disruptive market scenarios.

Make the most of new logistics frameworks with tools such as:

• Magaya Digital Freight Portal

As customer expectations around delivery costs, scheduling, and accuracy evolve, logistics companies need on-demand tracking and visibility solutions that deliver critical insight anytime, anywhere. The Magaya Digital Freight Portal automates this data collection and delivery process, allowing both staff and customers to access key shipment data on their desktop or mobile device in a branded, interactive app, 24/7/365.

• Magaya Supply Chain

To make the best use of emerging PI frameworks, companies need supply chain solutions capable of automating key tasks for freight forwarding, warehousing, 3PL operations, and customs brokerage — all from a single, streamlined platform. This comprehensive solution is intuitive and easy to use and comes with expert support to ensure you gain the full value from your investment. The cloud-based solution delivers superior speed, efficiency, security, and scalability, and our open API framework lets logistics firms build custom Magaya extensions or connect third-party solutions as needed.

• Final Mile by Magaya

Master every step of the shipment, all the way to last-mile delivery with Final Mile by Magaya, a mobile app that gives drivers an efficient way to pick up and deliver packages and collect signatures, right from their phones. Drivers can scan packages and get signatures right on the screen, and all pertinent data about the delivery is synced back to the Magaya system, enabling shipment visibility and up-to-the-minute accuracy at all times.

• Magaya Rate Management

The faster and more accurate your quotes, the better your chances of landing high-profit logistics contracts and keeping customers happy. Catapult QMS makes it easy to keep up with the speed demands of the modern supply chain – search and compare your entire rate set in addition to managing margins, surcharges, and spot rates with ease. You can also quickly file tariffs, respond to RFQs, and offer on-demand quotes — all from a single control tower.

• The Magaya Network

As noted above, collaboration is now critical for success in the changing logistics market. Whether this means working with startups to integrate new ideas, developing new solutions in-house, or aligning with larger corporate interests, partnerships are now a priority to ensure ROI. Magaya customers automatically gain instant access to a global network of more than 2000 supply chain companies across 90 countries, in turn offering new connection opportunities along with the ability to instantly exchange documents and data with any partners also using Magaya solutions.

Change is Good When You Embrace Evolution

Informed by disruptive delivery expectations and underpinned by emerging digital trends, the logistics industry is undergoing substantive transition. And, while no future is set in stone, one thing is certain: connected, automated technologies form the backbone of success for any modern logistics service provider.

Discover how Magaya can help prepare your business for the future framework of logistics operations.