8 Supply Chain and Logistics Trends in 2022

8 Supply Chain and Logistics Trends
8 Supply Chain and Logistics Trends
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Staying on top of supply chain and logistics trends and news will be crucial for all logistics companies and retailers who want to remain in business and even be leaders in 2022.

The reality of COVID

In 2020, COVID-19 generated an imbalance between the supply and demand of merchandise, significantly impacting global supply chains. With the pandemic came lockdowns, which slowed production worldwide. Concurrently, the US government began stimulating the economy, and cash flowed into the hands of businesses and consumers spending it. This situation led to the US going through trillions of dollars of inventory while domestic and international production was shut down. With demand quickly outpacing supply, retailers went through their inventory to keep up.

Post-COVID

Currently, US eCommerce growth has reverted to pre-pandemic levels. However, delivery volumes are as high as ever. To increase supply chain efficiency, lower logistics costs, and maintain customer satisfaction with on-time delivery, companies must reassess their processes and adopt developing supply chain and logistics trends.

Top Trends for 2022

  1. Focus on driver retention and last-mile bottlenecks
  2. Supply chain localization for lightning fulfillment
  3. Utilizing innovative supply chain tech for agile supply chains
  4. Predicting inventory and delivery by using SCM technology
  5. Employing crowdsourced delivery and several logistics partners
  6. Moving to last-mile delivery solutions
  7. Returns supply chain management (SCM)
  8. Reducing carbon footprint for sustainability

Driver retention

Without drivers, goods can’t get from place to place, and supply chains break down. Once containers are unloaded at the port, trucking becomes the primary means of transporting goods. Limited trucking ability causes container volume to sit idly at capacity-restricted facilities, meaning goods and raw materials don’t move, and businesses cannot begin inventory procedures and sell or deliver to customers. Currently, trucks and drivers are in short supply. Forbes reports one qualified driver for each nine job listings. Moreover, small trucking businesses have almost zero incentives to boost capacity as rising prices prevent them from buying more trucks. The solution for companies is to adopt the trend of fighting shortages and investing in driver retention by offering incentives like paying per drop or last mile delivery to address current last-mile supply chain bottlenecks.

Localizing supply chains

Today more than ever, consumer behavior demands rapid yet reasonably priced fulfillment. In an incredibly competitive landscape, on-demand delivery – even same-day delivery, which was once unheard of, is becoming expected by consumers and, therefore, a key differentiator. According to Statistica, 40% of retailers shipped items directly from their stores over the last peak buying season. However, most supply chains find it challenging to provide such delivery. For this reason, localizing the supply chain has become very common in the market of quick commerce – or q commerce. Q commerce is about speed, and with 2021 global eCommerce retail sales hitting $4.9 T, consumers want speed and convenience, which for many is immediate delivery.

What is the solution? Faster fulfillment requires supply chains to shift to a local level. Supply chain leaders once managed shipping and inventory regionally; however, now, they are fulfilling orders from urban fulfillment centers or local stores. The benefits of this approach include using up local inventory as desired, fast and efficient delivery, enhanced consumer experience, and keeping up with the latest supply chain trends. Also, a major priority for 2022 will be opening more locations to stock inventory with an order management system that directs orders to those locations for fulfillment.

Multiple -fleet partners

Effective multi-fleet management is vital for saving costs, meeting consumer expectations, and maintaining the smooth operation of the digital supply chain. Multi-fleet management comprises in-house drivers and 3rd party providers delivering scheduled or same-day orders at scale. Optimally, to increase speed and lower costs involves automating which orders to out to which fleets — for instance, using a pool of drivers to deliver from fulfillment centers or several stores in one area.

Another trend is that retailers tired of relying on FedEx and UPS seek alternatives and turn to regional delivery or shipping carriers. There is much competition and choosing shippers is challenging. However, this brings us to the next trend – last-mile logistics providers standing out from the crowd by meeting consumer and regulator demands for green logistics, sustainable shipping, and reducing carbon emissions. By so doing, these providers are helping retailers do the same.

Supply Chain and sustainability

Pressure from consumers, activist NGOs, public policy, industry peers, and employees has ushered in a wave of corporate sustainability pledges that line up with the Paris Agreement’s goal of net zero emissions by 2050. According to a paper titled Net Zero: The Next Frontier for Corporate Sustainability by a Yale School of Management team, greenhouse gas emissions (GHGs) measured in metric tons of carbon dioxide is the world’s single most significant driver of climate change. The retail industry in the Consumer Discretionary segment is one of the biggest emitters, only trailing gas and oil. Furthermore, those companies that sell a high volume of products with pervasive usage have astronomically high carbon emissions from their supply chains and use of sold products.

A primary culprit is transportation, along with increased demand in eCommerce. Research by the World Economic Forum, The Future of the Last-Mile Ecosystem, says that increased demand for eCommerce delivery will generate 36% more delivery vehicles in inner cities by 2030, leading to a rise in emissions and traffic congestion without effective intervention. Furthermore, without intervention, city last-mile delivery carbon emissions and traffic jams are set to increase by more than 30% in the world’s top 100 cities. Among interventions analyzed for reducing emissions, congestion, and delivery costs for the “urban last-mile,” the report says that ecosystem-wide change could lower emissions and congestion by 30% and delivery costs by 25%, compared to the “do-nothing scenario.”

In sum, entrenching green logistics procedures throughout the supply chain – primarily through sustainable eCommerce fulfillment alternatives and delivery procedures – will help supply chains remain competitive and at the same time boost market share in 2022 and beyond.

To quote Daniela Perlmutter, SVP Marketing, BRINGG, “Solving carbon emissions isn’t something that brands, delivery and logistics partners, and tech companies can do separately. It has to be solved by working together, as an ecosystem.”

 

 

 

Learn more about logistics and supply chain in our blog

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