June 18, 2021

What comes to your mind when you think about the future of logistics? How will our supply chains look like in future? Have you ever wondered how did the logistics industry operate during the pandemic to transport essentials and medical supplies? What was the impact of the pandemic for the industry?

For instance, we know the demand for logistics rose significantly during the pandemic for pharmaceuticals, essential commodities, FMCG, agriculture and e-commerce; At the same time, supply chain disruptions caused delays and backlogs at the warehouses or while in-transit. The global logistics market size is expected to grow by more than 17% year-on-year for calendar year 2021. While the estimations are lower as compared to the pre-pandemic estimations, it still requires companies to transform their operations to meet the high demand and customer expectations.

An imperative need that has come to the fore for logistics’ companies is supply chain visibility or in-transit visibility. However, mere usage of digital technologies will not help in creating a digital and autonomous supply chain; there needs to be a connected ecosystem that routes data in real time through cloud. It is needless to say that the adoption of cloud has hit the priority list for a sustainable future of the logistics industry. Many leading logistics and delivery players had already started investing in smart technologies even before the pandemic to keep up with the rising demand for speedy deliveries as well as the growth of e-commerce. However, the pandemic has exposed weaknesses in the current supply chains with sudden lockdowns and international border closures. There has been a lack of traceability of goods across the supply chain in real-time leading to unwanted delays. As shipments leave the warehouses, the end customers have a limited visibility with respect to their packages. End-to-end real-time supply chain visibility can address these challenges and also prove to be a significant differentiator for the logistics players globally. Though the implementation of cloud technologies is top of the mind for leading technology leaders, the urgency to speed the implementation has increased amidst the COVID-19 health crisis. As per leading analyst and consulting firm Gartner, more than 50% of product based organizations plan to invest in real-time supply chain visibility platforms.

As organizations look at solutions for thriving in the new beginning, the concept of supply chain visibility would include static as well as in-transit goods. One of the largest global package delivery organization has deployed a smart solution to monitor its network volume, enabling real-time assessment of external environment, routes, and demand volumes. This helps to respond quickly to any sudden changes in volumes in lieu of any disruption or crisis.

As for micro, small and medium enterprises (MSME’s) that have been hit by the pandemic and might not be willing to invest heavily in digitization technologies, how do they mitigate the challenges? This is where logistics software-as-a-service (SaaS) is expected to see a rise in adoption and MSMEs will prefer to pay-as-they-go in a drive to adopt digital technologies for seamless deliveries.

Moreover, there is a buzz around multi-cloud strategy among the logistics’ organizations. We also predict that cloud logistics might gradually move towards edge computing logistics where the data processing will take place at the location rather than in a centralized system, saving significant amount of time and bandwidth.

There is no doubt that the pandemic has accelerated the use of technology from being an option to be a mandate. To what extent will companies adopt and how will it play out, is yet to be seen. The winners will be companies that use their imagination and have the ability to take risks.

Romil Shah is a Research Analyst with TCS’ Corporate Marketing Research. He has close to seven years of experience and is engaged in strategic research for transportation and hospitality. He has completed his B.E. in electronics and communication and MBA in marketing.