2020: a year of challenge

London, UK: Global Cold Chain News is back after a its short Christmas break and welcomes returning and new readers.

Looking ahead, 2020 has the makings of a challenging year for UK coldchain operators. International tensions centred on the middle east are likely to drive up fuel prices and with little to no growth in business investment, the UK economy risks dipping into a recession. Still causing uncertainty is Brexit and despite government rhetoric we are not clear on what deal will finally emerge.

On top of these challenges are the changes that new technologies have already brought to third party logistics. Emerging ‘smart’ working practices and mobile technologies are already key methods of competing. Competition will intensify with food retailers – which account for a significant chunk of the cold chain industry – under enormous pressure to cut costs and maintain margins.

Accurate and efficient 3PL processes geared to decrease costs while providing 24/7 services will be crucial for owners to adopt for future success.  The costs-reduction goal of operational and employee hours will be attained by more partnering between 3pls and customers.

Emerging technology adoption will be key to that goal’s success. Electronic data exchange will be critical, not only for the performance and integrity of the data, but the flexibility and speed of change. Vendor managed inventory, where the supply chain vendor monitors the buyers inventory and makes periodic resupply decisions, will be common in even the smallest 3PL via web-based portals and access to the systems of the 3PL.

2020 will see fewer paper records as third party logistics companies opt for mobile technology. The RFID enabled devices’ potential to keep and store data for easy transport will simplify tracking and identification of products. Plus, freight shipments ordering and processing will be possible 24/7 by buyers from anywhere.

Smarter software and technology systems investments will be pursued and achieve ROI quickly. Transportation Management Systems type software solutions will lower inefficiency and costs while saving valuable time. Standards will elevate to voice prompting and commands for supply chain processes like inventory inquiries and tracking freight. Improvements in speech recognition software for direct Warehouse Management System communications will help inventory records and order turn-round – not to mention reduce employee-training requirements.

Cloud-based technology adoption will happen in most third party logistics companies.  By embracing this new ‘Big Data‘ age, 3PLs will respond to demands by recognising the need for customer access. With increased transparency, clients can better serve seasonal trends efficiently and meet flexible operation demands. This sharing of information will help item tracking throughout the supply chain.

In 2020, world economy integration and 3PLs will be expected to work on a larger scale with a distinctly global outlook. Global distribution will open markets worldwide with increasingly complex supply chains, cost variations and processes which will give rise to expert 3PLs. By 2020 many challenges will be faced down to increase growth dramatically, largely due to emerging and expanding global markets on a massive scale. Swift change will occur with mergers within the third party logistics industry. along with standardisation in shipper and supply chain management expectations.

Another common sight will be the use of continuous replenishment and inventory management.  3PLs will employ holistic approaches for their supply chains and emphasise external visibility by collaborating with manufacturers on production schedules with suppliers. They will work to ensure raw materials are available and to connect demand to supply within the sale channels.

Data will become more automated and system-generated, flowing out of advanced sensors where inventories will self-count and containers are equipped to report their own contents. Pallets using GPS technology will even self-report delivery errors to achieve in-transit corrections.

And sitting on top of all of this is the growing awareness and demand from customers for environment sustainability. By finding novel solutions to reduce inefficient processes, the big focus will be on sustainability. Buildings and equipment will be purchased based on green-friendly cost-reductions in energy use and transportation. To lower overheads, businesses, even some competitors, will combine their transport of goods to cut overall maintenance and fuel costs.

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