4 major trends that are going to impact supply chain in 2020.

It is the last month of the year and as all may agree the year 2019 has been an eventful one. The year has seen many strong domestic economies emerging in certain countries across the world and also many having political turmoils.

As far as technology goes the supply chain and E-commerce logistics industry has been witness to the emerging artificial intelligence and blockchain. With companies like Amazon, Flipkart having a cut-throat competition the year was also dominated by two-day deliveries as it was the talking point on many supply chain discussions.

It is time to bid adieu to this year and look forward to the coming year 2020. Let’s have a peek look at what’s in store as far as the logistics industry is concerned and try to evaluate some of the major trends that are going to impact the supply chain in 2020.

Circular supply chains to rule the market:
It is going to be a think of the past for linear supply chains and the same will be replaced with circular supply chains. The idea of refurbishing discarded products to be able to resale it is going to go off completely.

The rising costs of raw materials will see many companies opting to break down the products turning them back to raw materials. With the help of circular supply chain method companies will be able to save on the cost of raw materials and also be able to enjoy the reduced risk of price volatility. This in a way will also help companies to reduce waste that will also help in reducing the overall impact on the environment.

Uncertain global trade policies:
Changes in trade policies across the globe by countries have always been a thing of concern for the international logistics sector. The introduction of new policies and changes in existing ones can hamper the forecast and assessment of resource allocations in a big way.

Moreover when you have to consider the global scenario the never-ending trade war between the U.S and China continues to affect the supply chain as well as the global economy and is a matter of concern.

Shippers are not certain of the adjustments they may have to make to their supply chain operations which invariably is happening in short notices. Hence fleets have started ordering for short term requirements putting off long term plans of investments. This is going to affect forecasting and budgeting for shippers in the coming year.

Dwell time is showing back:
For those who need to have a refresh of the term Dwell time, is the ratio of time that an asset sits idle to the time required to satisfy its designated supply chain mission. This was a major issue in 2018 as it was a key focus to reduce the dwell time when the capacity was tight. But things had changed for good this year thanks to the strong economy and increased capacity.

As uncertainties are part and parcel of the logistics industry in the coming year will see the Dwell time problem creeping back. This is quite frustrating for drivers and carriers and more for the shippers as they will have to bear the burden.

Carriers pass on the excess costs back to the shippers via higher rates. Hence to avoid this problem shippers have to see to it that they improve communications with the drives and also equip 3Pl’s with better real-time visibility that will warn carriers of any bottlenecks.

Major 3E’s to play a factor:
The three major E’s in the shipping industry is the E-Commerce, Energy and the Electronic devices are going to impact the supply chain in a big way. The industry is governed today by the growing demand for fast and last-mile deliveries in the E-commerce sector. E-Commerce is going to be the driving force that will reshape the logistics sector. Also, efficient energy-saving production of flatbed trucking and with increased investment by large scale production houses have shown a greater long term demand. ELD’s or electronic logging devices have been increasing in use and it has started to be mandatory for truckers to implement and get trained in using it.

Final Thoughts:
The supply chain sector is constantly changing but with the growing advancement in technological implementations business owners have many beneficial ways to optimise their supply chain. This in a way will ensure that the supply chain operations run smoothly and businesses stay ahead in their game.

Leave a Reply

Your email address will not be published. Required fields are marked *