About the Logistics Industry
Logistics is the movement of products along the supply chain, from the resource’s origin to the finished good’s destination. This chain should operate efficiently and timely for maximum customer satisfaction. Companies in the logistics industry track orders, inventory and distribution. Through the supply chain, different parties can handle various components of the logistics process, including:
- Product and goods sourcing
- Handling and sorting
- Storage and warehousing
Some trends influencing the logistics industry are:
- The rise of e-commerce and online ordering contributing to the growth of the logistics industry
- Artificial intelligence (AI) and machine learning for accurate forecasting and better order management
- Autonomous vehicles and drones as faster, more efficient delivery vehicles
Challenges the Logistics Industry Faces
Supply chain companies seek to cut transportation costs while implementing new technology innovations to boost productivity. Some challenges the logistics industry must face include:
- Customer expectations: When customers place an order online in an e-commerce store, they want reliable package tracking to know where their delivery is. Many customers expect expedited shipping at the standard rate — most are not willing to pay extra for faster shipping.
- Business process improvements: Many supply chain companies struggle to keep up with business process improvements. Though new processes improve the business, adoption and onboarding can be cumbersome.
- Environmental regulation compliance: State and local governments have regulations that affect logistics, such as anti-idling and emission reduction. Complying with these regulations has a cost and can become overwhelming.
- Fuel costs: As fuel prices increase, fuel surcharges — and transportation costs as a whole — increase too. The high fuel costs work against the logistics initiative to cut transportation costs.