This article was written by Amadou Diallo, CEO of DHL Global Forwarding, Middle East and Africa. The original article was published by the African Logistics. You can find the article here.
Over the past two years, the global logistics industry has been adversely affected by unprecedented supply chain disruptions, ranging from port closures to high freight costs, material and staff shortages, and geopolitical crises.
These challenges have exposed supply chain vulnerabilities and highlighted the need for built-in resilience and adaptability.
To succeed in the year ahead, logistics operators must use the tools and technologies available to anticipate and overcome sources of disruption, such as oil price fluctuations and geopolitical tensions. Here are the top five trends that the industry needs to be aware of:
The big data boom
The pandemic has demonstrated the vital importance of data and transparency to supply chains. A robust data system enables businesses to identify issues and disruptions quickly, take countermeasures, and create forecasts for the future.
Industry is embracing sensors, dashboards, and other data-collecting devices and technologies to harness structured and unstructured data streams to improve end-to-end supply chain visibility.
By collecting and utilising the right data, logistics companies can build and deploy optimised strategies along supply chain segments, gain greater visibility and improve service levels. Relatedly, big data analytics is expected to be the norm within five years.
Blockchain technology rising to prominence
According to Rand Merchant Bank (RMB), Intra-African trade could rise by up to 30% within the next five years due in part to digitisation and blockchain. Today, the logistics sector in Africa is still quite paper-heavy when it comes to documentation. By adopting digital alternatives for customs clearance and other processes, trade can be streamlined, lowering administrative costs and increasing efficiency.
As the African Continent Free Trade Agreement (AFCFTA) enables goods, capital, and information to flow freely and easily across borders, blockchain technology can also assist in alleviating many of the bottlenecks in global trade.
These include procurement, transportation management, track and trace, customs collaboration, and trade finance. Such benefits significantly reduce barriers to trading, providing a financial incentive to implement it sooner rather than later.
Continuing focus on sustainability
It’s estimated that supply chains generate around 60% of all carbon emissions globally and about 90% of a product’s emissions derive from its supply chains. As more customers demand sustainable products and services, transparency legislation comes into force, and countries pursue Net Zero by 2050, there is clear pressure for more sustainable supply chains.
To accomplish this, the logistics sector will need to embrace new technologies and approaches. We will see circularity emerge as a key trend in the year ahead. Currently, only 8.5% of society’s total material consumption is recycled or reused.
Logistics organisations will look to leverage opportunities in all supply chain segments to improve their sustainability effort with circularity principles, to meet customer expectations and ambitious sustainability targets.
Improved human-machine collaboration
It is still early days for robotics and automation in the African logistics sector. However, the technologies are already demonstrating their potential. We will likely witness a shift from all-human facilities to collaborative human-machine facilities in the next few years.
In South Africa, for example, we are looking at introducing additional technologies that are being trialled in other warehouses abroad, including robots to help employees lift heavy cargo and wearable eyeglasses that help employees automatically scan parcel barcodes simply by looking at them. In these future logistics warehouses, people and robots will work together to deliver speed and efficiency.
These collaborative robots will be critical to improving worker safety, productivity, and customer satisfaction. Machines won’t replace the human workforce but will complement them – especially in manual work and repetitive tasks. In turn, this is expected to make jobs safer and more focused on higher-value tasks. These roles are more attractive, encouraging more employees to join the workforce, which is a win-win for employers and employees.
Great potential in the years ahead
Various factors taper the economic growth opportunities for the African region, and the logistics industry has limited influence over several of them. However, the sector has enormous potential to catalyse economic growth if it takes steps today to future-proof its supply chains.