2016 Trends in Logistics


As the New Year approaches, the logistics industry can look forward to advances. New technology continues to develop, supply chains will be even more influenced by consumers, and shipping costs will increase. Logistics operations have changed dramatically in the last few years and 2016 will bring even more changes.

Here are some trends you can expect in 2016:

  1. Real-time inventory management. Leading retailers will begin implementing mobile point of sale (POS) systems, beacons, sensors and other technology that will revolutionize inventory management and the whole buying experience. Customers will be able to pick up an item and simply walk out of the store, with the price of the item automatically charged to their card. Real-time visibility, both in the store and throughout the supply chain, will allow inventory to be replaced as it is moved, and items produced as they are bought.
  1. Retailers will make organizational changes. Omni-channel challenges will force retailers to look at the structure of their organization. Processes must be fluid. Departments have to work together – sharing short- and long-term goals and exchanging data quickly and efficiently. Logistics departments will be more involved with the entire organization as the fulfillment of e-commerce demand requires an enterprise-wide effort.
  1. Transportation rates will increase. FedEx and UPS rolled out 4.9% general rate increases (GRIs) at the end of 2015 that will be applied in 2016. This increase falls on top of two fuel surcharge increases in 2015. The entire motor freight industry will likely follow suit in an effort to increase revenue. For a long time, carriers scraped by on razor-thin margins due to high gas prices and high competition for freight. Now, the worsening driver shortage has made truck capacity a scarcer commodity, which drives up rates. Many carriers kept fuel surcharges the same or increased them, even though the price of diesel has plummeted and is expected to stay low. Truck prices will rise and are expected to continue rising for the next few years.
  1. Collaborative relationships. Many companies are working together in order to become a preferred shipper. Shippers will continue to turn to 3PLs to improve transportation operations and to secure reliable capacity. This has been a trend for years, but now, shippers are even collaborating with their direct competition to save on freight spend. For example, two industrial distributors in the same geographic location may decide to use the same freight carrier service in order to consolidate loads, acquire transportation data and provide carriers with backhaul opportunities – all in an effort to guarantee capacity and lower costs.
  1. Sustainability. Eco-friendly initiatives will become more important in every industry as consumers demand more social responsibility from corporations. The EPA is set to outline very strict emissions regulations in 2016, which much of the transportation industry sees as unfair. Freight transportation will be an area of focus for green-initiatives, as it is a pollution-heavy industry. It is up to logistics departments across the country to find solutions to these increasingly difficult challenges.

Want to learn more? Read about how shippers will meet growing demand in 2016.


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