The Various Factors Involved in the Transformation of the Logistics Sector

Thao Nguyen, Head of Supply & Logistics, DECATHLON

Thao Nguyen, Head of Supply & Logistics, DECATHLON

Logistics activities–a crucial part of today’s global economy is now at the stage of transformation with unprecedented pace accompanied by new technologies in order to serve different changing needs of business. Traditionally including transportation, customs clearance, and warehousing, nowadays with development of online economy, e-logistics including ecommerce fulfillment warehouse, last mile delivery, and reversed logistics are extended activities of logistics but are becoming more and more important.

Regarding transportation and shipment, end-to-end visibility has been provided to stakeholders atthe maximum level that allows them to easily track and trace the cargo. For example, at container level, there is “smart container” with external device connecting GPS generates a wide range of data in real time such as position, movement, ambient temperature, door opening, and shock. Some leading shipping container companies such as MSC, CMA-CGM already co-operated with Traxens (technology start-up specialized in Supply Chain Monitoring) to increase the benefits of Supply Chain by bringing accurate door-to-door visibility. Strong connection set up among different concerning parties based on cloud based systems and blockchain enable us to have both overview and detailed look of our shipments. Booking once placed on the shipper system is immediately linked to carrier/ trucker system. All the milestones are recorded in the system, and this later helps shipper/ consignee to collect the data base for reporting and data analysis.

Optimization of vehicle utilization is also going to higher levels, with platforms and applications allowing shippers to easily and directly place booking without brokers, hence clients have more control of transportation route, cost, and inventory. On the other hand, carriers are eligible to utilize their vehicle capacity to maximize their profit.

"Regardless of the type, transportation and logistics activities have many options in terms of advanced technology"

Traditional taxi business were shaken by the arrival of ride sharing applications, which worked really well recently; it is happening to trucking business too, uber-like services as well as apps have been developed and have started to be used widely.

There is also significant change/transformation in warehousing activity; we have been experiencing different stages in advancement of warehouse management such as information management by warehouse management systems, then mechanization in warehouse to smooth operations by putting into place different machines, conveyers, and facilities. Now we are at the stage of internet of things and robotic automation, warehouse activities can be very much more automatized and standardized. Using robots in a warehouse for picking and inventory helps to reduce a lot of dependency on humans, and hence increases efficiency, reduces space rental, and labor in many countries since the first day of implementation and increase accuracy significantly. “The average order picker can pick between 60 to 80 picks per hour, compared to a pick rate of up to 300 picks per hour when leveraging sorters and conveyors. Automated Storage and Retrieval Systems (AS/RS) have the potential to increase order accuracy levels to above 99.99 percent” (20 warehouse automation statistics that’ll blow your mind – CEL consulting). With these advantages, robots like Automatic Guided Vehicle are used more and more in pieces picking warehouse. It leads to the change of human’s role in this industry. Instead of simple and repeated tasks handling which are now replaced easily by robots, logisticians are expected to work on more added value tasks such as setting, controlling and improving procedures, machines and robots.

Growing environmental concerns now raise issues that concern everyone, logistics sector is definitely not out of that trend. New regulations related to sulfur emission of marine section will take place beginning of 2020 and this is the latest change in the industry that impacts carrier shipper and customers by forcing lower global sulfur cap on fuel content from 3.5 percent to 0.5 percent. Some carriers have started to install scrubbers on their ship—the cleaning technology becomes more potential in shipping industry, from the very first commercial system even in 2006. Consequently, it’s a trade-off that increases the eco-friendly level, but transit time is forecasted to increase, which impacts the business environment. In addition, new and/or more eco-friendly transportation mode is increasingly popular such as drone, electronic truck, car, among others. Usage of packaging material is also moving toward the trend of reduce, reuse, and recycle to minimize impact toward the environment. For example, single used plastic is replaced by eco-friendly multiple used plastics, carton box is replaced by plastics foldable box.

Logistics cost nowadays is about 8 percent-25 percent of a country’s GDP and the logistics industry is changing positively and profiting from advanced technology. Hence, optimization in logistics activities will definitely help increase competitiveness of economy. Regardless of the type, transportation and logistics activities have many options in terms of advanced technology so improving performance in three aspects of profit, people, and planet, and keeping up with modern technology is essential.

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