If there was ever an industry that was the poster child for, “the only thing constant is change,” it’s the logistics industry. In the last two decades, the world of freight management and 3PLs has undergone a transformation that no one could have imagined 20 years ago. What the future holds in the next decade will be both exciting and transformative.
Fluctuating market pricing: Will we see the record high rates again this year like we did in 2018? There is buzz about an expected down economy in 2019 – many, however, debunk the idea, but either way, the economy will be, as always, a market influencer. Is a fluctuating market really a trend? Maybe not, but it does seem to be of note during the first few weeks of this new year. In the first week tight capacity produced a three-cent price increase across the board for vans reefer and flatbeds, but fuel prices keep dropping, so what increases we may see could be counterbalanced by the dip in fuel costs. Some of the highest volume lanes also saw price drops, according to Rate Trend of the Week from DAT.
This trend of fluctuating prices and uncertainty in the logistics marketplace is likely to continue with so many factors in play this year. Cross-border trade with NFTA, tariffs and economic sanctions constantly making headline news are all prime suspects in shaping our 2019 supply chain trends.
Technology, but which ones? From driverless trucks to blockchain, warehouse automation, predictive load matching and full transparency, the digitization of America’s supply chain is imminent. When we think about aggregating all the working parts of a 3PL transaction, from communication, automation and the accompanying software platforms like TMSs, CRMs and GPS, we can only imagine all those things harnessed into one main interactive and collective brain. It’s not “if,” it’s “when” these things will revolutionize logistics.
Blockchain will prove, most likely, to be a forerunner in the industry. It is already being used by Walmart to trace its pork sources from China. (See the Top 10 Companies That Have Already Adopted Blockchain). An article on Forbes.com's website, by Bernard Marr, explains it well by saying, “Blockchain provides consensus—there is no dispute in the chain regarding transactions because all entities on the chain have the same version of the ledger. Everyone on the blockchain can see the chain of ownership for an asset on the blockchain. Records on the blockchain cannot be erased which is important for a transparent supply chain.” There is a lot of excitement surrounding the technology and its ability to drastically improve the currently disconnected global supply chain. It will be, no doubt, a game-changer.
Just last week, Freightliner announced its first release of an electric truck, made available to the press to drive at the Consumer Electronics Show. It is the first of 30 electric trucks Daimler will produce and put on the road in coming months.
Driverless truck technology is still a long way from happening with some predictions saying it will be another several decades before we see anything close to a level 5 vehicle on the full-scale of autonomous trucks. (Read about the challenges of replacing human drivers). We will have, however, some form of autonomous trucks sharing the roads with our passenger cars much sooner than the driverless version. Here are the current five levels of autonomous trucks.
Level 0: A human driver controls it all: steering, brakes, acceleration, and power.
Level 1: Most functions are still controlled by the driver, but a specific function (like steering or accelerating) can be done automatically by the vehicle.
Level 2: At least one system is automated, like cruise control and lane-centering. The driver is disengaged from physically operating the vehicle by having his or her hands off the steering wheel AND foot off the pedal at the same time. The driver must still always be ready to take control of the vehicle.
Level 3: A driver is still required but can completely shift safety-critical functions to the vehicle, under certain traffic or environmental conditions. Driver can intervene if necessary.
Level 4: The vehicle performs all safety-critical driving functions and monitors roadway conditions throughout the trip. This is limited to the operational design domain (ODD) of the vehicle, which means it does not work for every driving scenario.
Level 5: Fully autonomous, meaning the vehicle's performance is equal to that of a human driver, in every driving scenario—including extreme environments.
Smart warehouses – Smart warehouses are already in existence and will only become smarter and more efficient with the advancement of robotics and sensor technology. This worries some Americans in the job market but according to Rosen Dlankov, a robotic warehouse expert and CTO of the world’s first humanless warehouse, he contends that, “Introducing robots creates more jobs, and history has shown that's been the case," he said. "Companies that have embraced automation, like Toyota — it's the biggest car company in the world now."
Customer-Centric distribution – We are already seeing a changing landscape in the way our nation’s food is distributed. Local farmer’s markets and small shops are on the rise, replacing some of the volume in supermarket produce aisles. There is good reason for this. One of the biggest battles produce growers face is the time it takes to transport the food to market. It can take up to 10 days of transit time to ship and deliver produce which degrades the product’s nutritional value up to 60 percent. It also has less taste because it is often harvested prematurely to account for the transport time. As a result, we will probably see farmers trending towards moving their growing facilities closer to higher population areas and distribution centers to combat the problem.
There are always new challenges in the logistics industry and 2019 is bound to deliver its share. That’s what we love about being a 3PL… finding solutions to everyday problems. Need help with your freight?