There has been enormous transformation in the logistics space over the past several years. New innovations and technologies have made a lasting and irreversible impact on the workings of the industry. Logistics no longer remains just the flow of goods between the point of origin and the point of consumption. These changes, however, have swayed only a small section of the industry. Majority of logistics service providers have not shown any interest in new innovations and technologies and still believe in the traditional way of working.
The impact of growing consumerism has placed huge pressure on the supply chain, with changing buying patterns. Online stores are replacing brick and mortar ones as more consumers shop from their mobile devices at their own convenience. The diminishing boundary between e-commerce and traditional supply chain marks a new era of convergence with logistics.
E-commerce companies have started the trend of setting up their own logistics network to cater to market demands. Amazon has its own logistics network of freighter planes to fulfill its logistics needs, under the banner Prime Air. The company is also working on a system designed to deliver packages to customers in 30 minutes or less using unmanned aerial vehicles or drone.
In a logistics and ecommerce convergence, Maersk and Alibaba have teamed up to sell freight online. The move of Maersk to allow customers to book space on its vessels through Alibaba, shows the growing conjunction between e-commerce and logistics companies.
On the one hand, these developments show diminishing boundaries between logistics and e-commerce; on the other, it shows expanding horizons for both industries. Logistics companies today have never before had this much opportunity to expand their business. Logistics, already a crucial piece of the supply chain, will have an even greater role to play as the e-commerce business expands. This is especially so since logistics is the backbone of e‐commerce operations.
Logistics companies need to optimize their strategy in view of these new developments. Incorporating last mile delivery into their range of services will add to their business capabilities. Companies also need to turn to innovative approaches and technology to improve efficiency and delivery. The good news for logistics companies is that their expertise, and storage and distribution capabilities will be of great advantage.
However, only the smart use of technology will enable logistics companies to make the best of new business opportunities. New innovations and technology will also be key to the future strategy of companies in order survive and sustain operations in a rapidly changing ecosystem.