Following on from our analysis of how the packaging industry will evolve over the course of 2018, we set our eyes towards warehousing and logistics to review the predictions and evolutions we can expect to see in the industry.
In the following feature, we identify the key trends that the industry experts believe will be shaping the future of warehousing and logistics in 2018.
Turnaround Times Reducing on Last-Mile Deliveries
Businesses are increasingly looking for ways to satisfy their customers; in 2018, companies will make it their mission to decrease the turnaround time from the moment of ordering to the parcel delivery. Customer demand sees consumers wanting their products within a 48-hour period, or even as early as same day, and these customers are willing to pay extra in order to receive this service.
However, with companies such as Amazon making same-day and two-day delivery charges cheaper than ever, it is on retail businesses to work proactively with suppliers in ensuring they can follow suit, or risk losing vital business. Obviously, this will put increased pressure on warehousing and logistics industries to ensure orders can be completed on time. Some businesses are even turning to last-mile logistic companies to uphold the promise to their consumers, whilst others are trying to attempt their own ‘DIY’ last-mile delivery service to ensure they have more control.
Insourcing can be a huge demand on resources, and whilst you may initially think you are saving on your retail operating costs by not outsourcing, the costs (insurance, employee costs and training, equipment and resources, for example). Meanwhile, the risks associated with taking this operation on yourself could far exceed the costs if you were to pass the business onto a more experienced third-party company.
Automation
In the quest for quick turnarounds, companies are looking towards automated and semi-automated warehousing solutions as a viable option. This could be down to a number of reasons, such as skill shortages in the UK, the need for optimised operations and, again, the next-day delivery demand. Despite their use for high-end businesses, 2018 could see smaller warehouses incorporating automation, or at least semi-automation, to keep up in the marketplace.
Experimentation in Unconventional Logistic Methods
We’ve already witnessed a few unconventional logistic methods over the past couple of years, and nothing is set to change for 2018. With drones delivering parcels, deliveries by driverless vehicles and even robot staff, the experimental phases in both warehousing and logistics is not over just yet.
However, these methods come with their issues. Drones have to abide by airspace rules and also have their weight limitations. Driverless vehicles are still in their testing stages, and whilst they may be a solution to staff shortages, they most certainly are not the answer in their current state. Robots also take away the human element of customer service and replace worker wage jobs with higher-paid technician roles.
Whilst we embrace innovation, if the solutions are impractical, full of holes and unproductive for business success, it could prove problematic for businesses who want to move forward in experimental logistic methods.
Whilst there will always be inventions, perhaps we’ll see a few released this year, we just don’t see these ideas catching on until they are fully established and seen to work on a bigger scale!
Safety
As companies look towards decreasing their turnaround time, there will be a need for more consideration on workplace safety as a result. Health and safety issues could be derived from a number of factors, from an increased need to meet demand, to untested automation or untrained employees.
Considering the focus on warehouse health and safety after HSE (Health and Safety Executive) figures in 2017 saw the fatalities from workplace accidents in the UK rising, extra measures are needed by employers to reduce the risks. Employers will need to communicate with their equipment suppliers to ensure that they know their responsibilities, as well as ensuring proper risk assessments and safety systems are in place to provide reasonable measures to protect employees. The legal implications of improper and ineffective health and safety policies will be the driving force of improvement in industry standards.
Safety in 2018 will also encompass cybersecurity, as businesses across a wealth of industries look to protect themselves and their customers from data breaches.
Warehouse Locations
Warehouses are not cheap, so much so that most companies will not obtain a new warehouse until a contracted project is considered 80% full. A global phenomenon, however, is seeing large-scale companies investing in more regional warehouses rather than fewer, major warehouse hubs. This means that the products are closer to the customer and helping to limit the time on delivery.
It is important that businesses understand how to develop to keep up with consumer demand and industry expectations. If you would like to discuss more about your warehousing and logistics and discover how your business can save money as well, get in touch with our specialists today.
Article by: Craig Warhurst