In the last couple of years, with the growth of online shopping and the impact of the global pandemic, the logistics industry has experienced significant strain. In 2022, huge changes are needed to combat UK supply chain issues, and adopt environmentally friendly working practices. In this article, we look at six logistics trends to watch in 2022.
1. Expect prolonged staff shortages
The UK supply chain has been stretched to the limit due to a lack of HGV drivers, leading to various shortages including empty fuel pumps and unstocked supermarket shelves. This driver shortage was triggered by several factors, including an ageing workforce, a pre-Brexit reliance on overseas labour, and the pandemic preventing HGV driving tests from taking place.
Due to a slow response from the government, experts predict that staff shortages will continue to plague the logistics industry. According to a transport minister, increasing the HGV workforce by 35,000 will take 14 months, meaning supply chain delays could continue to frustrate shoppers and businesses throughout 2022.
Aside from HGV drivers, the logistics industry is experiencing other labour shortages caused by Brexit. Being part of the EU, the UK benefited from ‘freedom of movement’, meaning EU citizens could move easily to the UK to find work. Since leaving the EU, non-UK jobseekers need a work visa, and the number of EU citizens looking for work in the UK has fallen by 36%.
2. Further supply chain delays
Due to shortages of HGV drivers and EU workers, supply chain delays are likely to continue throughout 2022, resulting in widespread inflation. These unprecedented delays are causing freight prices to skyrocket to record highs, while creating a shortage of shipping containers.
At shipping ports, congestion is likely to continue as ships will have to wait to be unloaded. The knock-on effect of this is a shortage of both finished products and raw materials. Some experts predict that demand for shipping may eventually exceed the logistics industry’s capacity, causing even greater supply chain disruptions and bottlenecks.
3. Rise of green logistics
Following COP26, all industries will be moving towards more environmentally responsible practices. The logistics industry is responsible for a huge amount of global carbon emissions, primarily driven by the transportation of goods, and will have to significantly adapt to facilitate the transition to a greener future.
How the logistics industry will change in 2022:
- More electric vehicle fleets.
- Energy-efficient warehouses.
- Greener supply chains.
- Increased adoption of technology to support reductions in carbon emissions.
- Increased use of biodegradable packaging.
If you’d like to learn more about how COP26 will impact logistics, click here to read our article.
4. Big Data Logistics
Big data is a growing field, focused on ways to analyse and make use of data sets that are far too large for traditional software to process. Used to inform decision-making and reduce inefficiencies in numerous ways, big data is set to become increasingly integrated within the logistics industry next year.
Big data is primarily used to optimise delivery routes and save money, enabling logistics companies to access both historical trends and real-time data, including fleet maintenance schedules, staff rotas, and weather data, to make decisions regarding the best mode of transportation to maximise profitability, and delivery performance.
Big data can also be used to:
- Create accurate forecasts regarding demand.
- Better understand customer buying cycles.
- Facilitate automated logistics functions.
- Increase transparency regarding delivery of goods.
- Improve the delivery process of perishable goods.
- Improve warehouse management.
5. Last Mile Collaboration
In logistics, the last mile refers to the last part of a product’s journey; the final stage in the delivery from the distribution centre to the recipient’s door. It’s frequently the most expensive part of the fulfilment process and often involves inefficiencies which reduce profitability. In 2022, last mile delivery will be a talking point for numerous eCommerce businesses and logistics companies who will be testing fresh ideas such as last mile collaboration.
Last mile collaboration could work in a similar way to Uber, but in a delivery capacity, with fleets of vans delivering orders from a number of different companies. It would allow smaller businesses to benefit from a larger delivery infrastructure that wouldn’t otherwise be available to them. Many eCommerce businesses will be exploring last mile collaboration options in the coming years, making it a key trend to watch.
6. Increased demand for order fulfilment
The eCommerce industry has boomed in recent years, with online shopping growing in popularity due to its simplicity, the wide range of products available, and attractive discounts. The global pandemic has played a pivotal role in accelerating this growth which is set to continue for years to come.
Experts predict that UK online clothing sales figures will exceed those on the high street in 2022, with 52% of all transactions expected to take place online. As many eCommerce stores continue to grow rapidly, order volumes will eventually exceed the maximum capacity of their internal order fulfilment infrastructure, leaving two possible options: to expand their order fulfilment capability, or outsource fulfilment to a Third-Party Logistics (3PL) company.
EC Group is a 3PL company that specialises in taking control of everything, from your inventory management to order fulfilment, and even response handling. During periods of supply chain disruption, when you need stock close to your marketplace, our logistics facility ideally located just outside London, can provide the type of fulfilment service that could transform your eCommerce business, and enhance the shopping experience for your customers.
If you’d like to partner with an experienced order fulfilment company, please contact us.