Future of Logistics Companies

Gartner, Inc. the world's leading information technology research and advisory company, published predictions that would affect logistics companies around the world over the next four years. Logisticss and supply chain management is vital for all businesses as it helps products and services reach the end customers.

This article enumerates the factors that Gartner indicates will affect the logistics companies.

Sustainable logistics

C. Dwight Klappich, Vice President of Research at Gartner, believes that governments will frame laws based on environment that will have a considerable impact on logistics companies. More than 50% of the global 1,000 logistics companies will have to record emission levels, and substantiate it with proof. They will have to also report the effect of their business activities on the environment, and will have to record environmental data and greenhouse gas emissions information. Thus, in future, the focus will be on sustainable logistics.

Compliance and risk management

Supply Chain Management (SCM) is getting complex and risky day by day. The reason for this is many companies are not concentrating on areas such as compliance, risk management and security. This is taking place depsite the fact that they are the most important and integral part of SCM. In fact, less than 16% of logistics companies will have a chief logistics and risk management officer. Government laws are increasingly making an impact on the logistics business. But, the authority of understanding as well as managing these legal issues is spread over a business, and no single authority is assigned this responsibility at an executive level.

Application convergence

Logistics service providing companies will have to opt for application convergence, as there will be a need to synchronise processes. In fact, 35% companies surveyed by Gartner showed the inability to do so. Processes are not synchronised because organisations buy standalone applications for only a part of the process. The applications are not integrated with the rest of the process. This is where supply chain execution convergence plays an important part, where the SCM organisations incorporate a platform that will help integrate and synchronise the logistics processes.

Optimising international flow:

Global trade as a percentage of global GDP is decreasing. In this scenario, the focus of international flow will shift from proliferation (spread of trade) to optimisation. Shippers will compare the different global sourcing options and manage the risk involved in them.

According to Gartner, 60% of current multinational manufacturers will organise their logistics in such a manner that they will benefit from economies of scale. They will be able to manage risk associated with fluctuations in currency exchange rates, taxes and profit marigns. Logistics and supply chains Management services will be managed globally, while sea and airfreights contracts will be managed centrally.

Logistics companies need to delve into these issues and proactively work on the recommendations for their business growth.