Our predictions for 2019 in the logistics industry
On this last day of 2018, we wanted to share our predictions for what we foresee will happen in our industry in the new year. The logistics and warehousing industries are in constant flux, and we see many trends emerging that will drive the industries moving forward.
Warehousing space shrinking, becoming more urban
It should come as no surprise that e-commerce continues to reshape the logistics industry as we know it. Companies such as Amazon and Wal-Mart have set the bar high for fast delivery. The want for same-day delivery has now become a need and both the e-retail giants as well as smaller retailers worldwide are striving to meet those demands.
Part of meeting this need has meant that companies have had to get innovative to create new warehouse space and higher efficiency. Gone are the days where warehouses are giant buildings on the outskirts of town. We already see that warehousing will include smaller spaces in more urban locations than ever before.
Material Handling and Logistics says, “Owners and investors are finding opportunities to repurpose overlooked or under-utilized urban infill industrial facilities – and sometimes other types of real estate – in key locations for last mile deliveries.”
Distribution centers must be placed in these high demand locations, but space is very limited. In Chicago, they are transforming unused space in parking garages to urban distribution centers (MHL). You can see these sorts of transformations across the country.
Multi-story warehouses are also becoming more common. “In markets with high land values, such as New York City, Seattle and the San Francisco Bay Area, multistory distribution centers are coming to life (MHL). These buildings help create more space in an area that may be lacking.
Truck driver shortage will grow
The demand for truck drivers continues to rise, but as it does, so does the shortage for qualified drivers. Forbes states that the main cause of this shortage is demographics.
Fewer people are applying for these positions and the ones who do often do not meet one or more of the qualifications needed.
Forbes says, “According to the Bureau of Labor Statistics (via NPR), the average age of a trucker in the U.S. is 55. These truckers want to retire and exit the workforce within 20 years.” With this aging workforce, the number of drivers continues to drop while the demand for drivers continues to rise.
It is unlikely this problem will go away anytime in the foreseeable future. We are experiencing this in our own company even though we do not require overnight or long trips for our deliveries. Finding enough qualified drivers continues to be something we face and we are finding creative ways to continue meeting customer demand.
Drones’ impact on last mile delivery
As we know, the use of drones in the supply chain is a growing trend. But how effective is it? Would customers really prefer a drone delivering their package over a person?
Although companies like Amazon and Wal-Mart have experimented with drones, as we predicted last year, there are many complications. The drone can only carry light-weight packages and can only go as far as the person operating it can see.
While a drone can quickly deliver a package to a customer in a nearby area, it does not give the satisfaction of that personal customer service aspect that comes with a delivery driver dropping the package off at your door.
We believe that the battle between drone usage and providing quality, personalized service will continue. At On Time Logistics, we prefer the ability to safely and securely deliver your packages ourselves. Our white glove delivery services are in increasing demand as our client’s end customer prefers that extra level of customer service.
Fleet maintenance and the automotive industry
Keeping trucks in good conditions is a necessity as the need for fast delivery and efficient vehicles is at an all-time high. Automotive World states, “The final leg of an online order is perhaps the most challenging, as delivery companies balance the need for speed, efficiency and cost control with the challenges of ever-stricter congestion, emissions regulations and noise restrictions.”
Logistics companies and automakers alike are working hard to ensure that the vehicles used for last mile delivery are both efficient and environmentally friendly. Robots, drones, and electric scooters may help bridge the gap between high consumer demand and fast last-mile delivery in some areas, but we don’t see that catching on just yet in areas like Northwest Arkansas and Little Rock just yet.
Let us help
On Time Logistics provides safe, efficient, regional, and professional warehousing and delivery services. Are you wanting to reduce your costs but maintain a safe and customer-friendly operation in 2019? Let us help! Contact us today to help with warehousing or logistics in Little Rock, Tulsa, Northwest Arkansas, and the surrounding areas.