Predictions for the logistics industry in 2023
In many ways, COVID-19 worked in the industry's favor. Global News Wire reports that the logistics market's worldwide value rose to $4.92 trillion in 2021 and it's expected to continue growing until 2027 for many reasons. More countries, for example, are signing major trade agreements. The continued automation of various logistics processes is also contributing. E-commerce, meanwhile, is enjoying more popularity and driving logistics growth.
Below are a few industry experts' predictions for the remainder of 2022, leading into 2023:
1. A sustained escalation of freight prices
As Transport & Logistics Middle East explains, freight rates increased sharply throughout 2021 due to a miscellany of factors such as shipping container shortages and problems with supply-side capacity. Other causes such as surging truckload rates may lead to rising shipping costs. Sobel Network Shipping believes that ship charter rates and port congestion will remain high next year.
2. Global labor shortages
International lockdown led to companies laying off large numbers of their workers which resulted in a marked labor shortage in shipping ports across the globe. Logistics companies found themselves with more demand for transported goods, but diminished labor supply. There may be continued labor shortages as governments and businesses recover from the pandemic.
3. Ongoing automation
Technological advancements and improvements are going to affect every industry and logistics is no exception. Many logistics-related processes have already been automated, such as digital monitoring of the theft or loss of goods during transportation. As Finances Online explains, it's believed that this automation, with a particular focus on artificial intelligence, will continue in 2023.
4. Focus on sustainable shipping
As climate change continues to worsen, more governments and companies are paying attention to their carbon footprint and how they can offset it. Various stakeholders within the logistics sector are aiming to implement more sustainable and eco-friendly logistics processes. Apart from stakeholders directly related to the logistics industry, climate change advocacy groups are helping consumers to become more aware of their environmental impact.
A survey conducted recently by Sensormatic Solutions in the United States found that approximately 70% of consumers are willing to pay up to 5% more on goods that are sustainably transported throughout the supply chain. Consequently, logistics companies will need to dedicate themselves to developing sustainable practice strategies in order to remain competitive in the market.
5. Increased use of IoT and blockchain technology
Logistics companies looking to make their supply chain processes more transparent are integrating greater amounts of blockchain technology. By using blockchain tech, these companies are providing other companies and consumers with valuable updates on the product's journey from the manufacturer to the customer's hands. Many of these companies are also implementing more IoT (internet of things) technologies for the same reasons, and this trend is expected to continue for many years to come.