Changing buyer behaviours, increased demand, economic pressures – to say that 2020 was a challenging year would be a tremendous understatement. But will 2021 be any better than 2020? As we kick off the New Year, Chris Jones, EVP Marketing & Services, Descartes, outlines some of his key supply chain and logistics predictions for 2021.
Another year of the delivery economy
COVID-19 is going to be with us a lot longer than we all want; it has accelerated ecommerce adoption and permanently changed buying behaviour. Companies have struggled to keep up with the demand through their own efforts or with carriers. In one respect, 2020 was a tremendous accomplishment considering the volume of shipments that were handled; however, it was also a step backwards in terms of delivery timeliness and reliability. In 2021, retailers will focus on improving home delivery scale, service quality and, most importantly, differentiated delivery service offerings. Distributors and other B2B companies will also see customers demand more from their last mile capabilities as consumer expectations continue to bleed into the B2B markets.
The great vaccine distribution stampede
We’re about to see the greatest surge in pharmaceutical shipments in history starting in 2021, which will put extreme pressure on cold chain logistics operations, particularly in the air cargo industry. Not only will it be large (tens of billions of doses), it will also be demanding in terms of shipment locations and efforts to ensure product efficacy as governments push to maximise the number of people vaccinated to quickly eradicate the virus. Governments will insist that vaccine shipments be given first priority to capacity in what is an already tight air cargo market. The air cargo industry will also be pushed to provide real-time, end-to-end shipment location and condition visibility to demonstrate its ability to help keep vaccines as effective as possible.
The digitisation of the LSP community
Digital reinvention will be a key component of logistics service providers’ competitive and financial performance improvement strategies in 2021. The move to work from home was the tipping point for those LSPs that still relied on manual processes, close proximity to other workers and high touch customer engagement. Customers are expecting B2C self-service processes from their LSPs as they do not want to have to talk to someone on the phone to book a shipment or track it. It’s clear that digitisation streamlines LSP operations, reduces costs and provides a better customer experience. From booking to back-office operations, the mantra for LSPs in 2021 will be “do what you do best, automate the rest” as LSPs move their scarce resources to higher-value work.
If 2020 could be characterised for logistics professionals, it would be as an accelerant of change. For those who were on the fence about digitisation, the pandemic pushed them to modernise operations to adjust to the radical changes in business models and customer demand. For the early adopters of advanced technology, 2020 demonstrated that their investments in logistics technology to become more agile, cost-effective and customer-centric were worth it. We should expect these themes to continue to dominate in 2021 as businesses continue to adjust to the new normal and set their sights on success in the post-pandemic era.