In the military, logistics hence refers to the movement of supplies and equipment in the war zones, which is derived from the French term ‘logistics’. Putting it simply, a freight forwarding company is dealing with the acquisition, storage, management, and transport of resources, including equipment, inventory, food, liquids, materials, and people.
In 2020, the logistics industry will have fallen to $5,200 billion from $7,641.2 billion in 2017. The COVID-19 pandemic slowed down global logistics activities in large part.
E-commerce’s unprecedented popularity has somehow led to increased demand for the 3PL (Third-Party-Logistics) and 4PL (Fourth-Party-Logistics) services.
Globally, the course of the 3PL market is yet forecast to reach a ratio of $1 trillion over the next six years, according to a report by Allied Market Research. It would be more in demand for 3PL companies to have multiple warehouse locations, making last-mile logistics more efficient.
The advantages of 3PL and 4PL include the fact that they are cost-effective, faster, and more responsive. There are disadvantages, such as lack of direct control over the logistics providers and increased reliance on them by the manufacturer.
Into the Freight Forwarding & Distribution Industry Future Forecast
For readers wondering what the future holds for the distribution industry, Robert Faletra talks about some of the future’s possible supply chain issues on CRN.com!
But for those of you who like to see numbers to back up their arguments, the distribution industry will be dominated by trucking rather than freight rail over the next decade.
U.S. freight tonnage and revenue are hence forecast to rise by almost 24 per cent and 66 per cent, respectively, within the US Freight Transportation Forecast to 2022 by the American Trucking Association, HIS Global Insight, and Martin Labbe Associates.
Due to those numbers, trucking is far ahead of rail in revenue and tonnage in the freight transport industry.
In terms of freight forwarding Company transport cargo, the report predicts trucking to gain 70 per cent share by 2022. The rail sector will drop to 14.6% according to expectations.
According to the forecast, intermodal transportation will benefit the most. From 2011 to 2016, the cargo of intermodal transport is expected to increase by almost 7 per cent a year. Intermodal transport revenue is expected to jump from $11.1 billion last year to $30.7 billion by 2022 due to that spike.
Supply Chain and Logistics Amazing Trends to Watch in 2022
It has been a challenging and historic couple of years for supply chain and logistics. In the years leading up to 2022, we continue to see high demand, short-staffed fleets and backed-up infrastructure, which cause delays and higher prices.
Most companies haven’t yet optimized their capacity, which is good. Regardless of the many challenges facing your company, you can position it for success by taking the right steps.
There is great potential for productivity and efficiency in each of these four trends in 2022.
1. Prepare for a prolonged shortage of talent
The current driver shortage is forcing everyone to do more with less. As a result, companies are yet looking forward to expanding their fleets or even increasing capacity will be delayed. Nearly a quarter of the trucking workforce is set to retire within just a decade.
Drivers aren’t just the only ones who are affected. Given that there are so many container ships waiting off the coast of Long Beach, a strike isn’t out of the question shortly. Experts in the circle of supply chain management who can even help organizations thrive during these challenging times are yet in higher demand.
Currently, the talent competition is so fierce that everything you do should be geared toward making the people around you feel loved: if you run a fleet, make sure your drivers feel loved; if you manage a brokerage, make sure your partners are treated with respect.
Additionally, consider how you can make the most of your time and resources. In addition to adding the staff, you may save hence drivers’ time and the usage of technology that allows supply chain professionals to make some strategic decisions.
2. The crunch for capacity willfully continue
The gap between supply and demand is too wide right now, a perfect storm that’s been brewing for years, exacerbated by COVID-19, causing shipping volumes to rise.
In 2020, Apple chartered around 200 private jets to ship the devices, which is a new record for the company. Ship rental costs can yet reach $200,00 a day, and some of the brands are paying a series of premiums to ship by air. It will take time for capacity to catch up with demand, so companies will need to prioritize shipments and keep an eye on asset utilization to make the most of their capacity.
3. Mergers and acquisitions will increase
The first half of 2021 saw deal value rise 86% year over year for global shipping firms and manufacturers alike through M&A. As a result of its technology and the ability to expand its network, UPS acquired Roadie, while Panasonic acquired Blue Yonder. This service employs artificial intelligence to manage supply chains end to end.
With talent and capacity shortages, situational awareness can help uncover opportunities for adding capacity and managing growth sustainably. In 2022, we expect more companies to acquire visibility capabilities, as visibility is now acknowledged as a strategic tool for driving efficiency and utilization.
4. Infrastructure investments could pave the way
We can alleviate a lot of the capacity crunch by building new ships, trains, planes and ports overnight.
Getting up to speed on the infrastructure we need takes time, and there is no magic wand. We can even start building out capacity if Congress passes the infrastructure bill to move past the entire deadlock. Until then, we’ll continue to find new efficiencies so that we can do more.
In logistics and transportation, what risks should be considered?
The pandemic has transformed freight forwarding Companies and Logistics, with many companies forced to cut transportation costs. This is forcing businesses to rely on fewer carriers or to ask for lower rates.
In the wake of Covid-19, it is critical to implement a contingency plan and learn from past errors. Even though we face new challenges, we must use them as a learning experience to become more adaptable as we move forward.
Let’s examine the most challenging aspects of transportation and logistics and suggestions for improving them in the future.
1. The impact of rising fuel prices on the economy
The environment of rising fuel prices affects the moods of consumers negatively. Flight prices skyrocket, and of course, this impacts the logistics industry as well (we know those freight fuel tanks don’t come cheap). This results in serious supply chain delays since decisions must be made about which trucks to fill. This results in a drastic increase in fuel costs for logistics, no doubt.
The logistics industry might feel like it faces an uphill battle, but technology can help us overcome our challenges. It’s possible to stretch a logistics budget far beyond its limits by consolidating shipments and using data to optimize routes.
Ultimately, reducing mileage will result in a decrease in fuel consumption. It’s also good for the environment!
2. Complicated government regulations
Governments now have to transform digitally because of unforeseeable circumstances such as Covid-19 and Brexit. Putting solutions into place without the “go ahead” from authorities is difficult due to long processes and bureaucratic regulations.
Our collective experience with the pandemic has highlighted one point quite clearly: we need to leverage technology to become more adaptable as a result of it.
Implementing automated solutions like PTV Map & Guide enables planners to immediately identify potential improvements in routes when a button is pressed.
3. Sustainability of various logistics operations is a lot important
In addition to the push for conscious consumption, the pandemic has led to changes in laws and regulations. These days, consumers and businesses alike are interested in knowing which brands they’re supporting and how they’re contributing to the environment.
As a result, sustainable logistics operations have become increasingly important. Technology, such as PTV Route Optimiser, can help logistics planners improve these elements. Software products we offer help reduce CO2 emissions by 40,000 tons a day and profits by an average of 17% every year.
In addition, sustainable logistics operations have the following benefits:
- Polluters have a greater chance of winning contracts
- Policies related to government flow smoothly
- With green vehicles, fuel costs decrease and profits skyrocket
Is the Future of Freight Forwarding Company Bright?
There will always be a need for talented people in the industry. Those with drive, determination, and ambition can make a rewarding career in freight forwarding.
Furthermore, freight forwarding Company is a growing industry, and there is no sign that it will slow down or be replaced by machines shortly. Importers and Exporters Benefit from Freight Forwarders’ technology, but technology replaces people. Our growth is a reflection of that fact. Our freight forwarding Company team now consists of 17 recruiting professionals in the US, more than double where we were before the pandemic.
The budget is fully expected to double in the coming 2022 year to service all existing client companies. Things are looking good. It looks very promising.