Challenges and Trends 2022 in the Supply Chain

The year 2021 was once again a challenge for the entire logistics industry. As it picked up exactly where the previous year left off, we started 2022 with significant disruptions and challenges for shippers, carriers, and logistics service providers. Jesper Bennike discusses the challenges and trends in the supply chain.

By Jesper Bennike

(Wien) In addition to the ongoing complications related to the Covid-19 pandemic, such as travel restrictions and transport delays, the widespread shortage of labor and materials tested supply chains worldwide. Estimates suggest that the number of truck drivers alone in the United Kingdom fell by almost 70,000 in the second quarter of last year. This left the logistics industry with around 90,000 fewer drivers than would be optimal for smooth business operations. In Poland, the situation is even more drastic: it is estimated that the Polish economy will lack up to 200,000 truck drivers in 2022.

Furthermore, major corporations Volkswagen and Apple recently announced that they had to forgo profits of 500 million euros (VW) and 6 billion US dollars (Apple) due to the global semiconductor shortage. This highlights the enormous financial impacts that disruptions in the logistics industry can bring.

The restructuring of global supply chains is therefore becoming increasingly important. A special role is played by the use of digital tools and platforms to make the industry more resilient, flexible, and efficient.

In fact, companies in the logistics industry have had little control over the processes within their supply chains over the past two years. For them, 2022 offers the opportunity to regain control and be back in the lead – even though the current disruptions are expected to continue into the coming year. The following three trends could have a decisive impact on the development of the industry in the next twelve months.

Leveraging AI and Machine Learning

Companies that have already implemented Real-time Visibility (RTV) in the past twelve months will now take the next step towards digital transformation. By integrating AI and machine learning into their processes, companies can derive the greatest benefit from their RTV data. Furthermore, they can use these technologies to optimize and automate decision-making processes.

Additionally, companies utilizing AI-based platforms benefit from real-time recommendations. The platforms can predict situations and make autonomous decisions based on set parameters. But that’s not all: the applications also enable dynamic rescheduling of delivery windows, assigning specific orders to the most suitable carrier, and seamless integration of payment processes.

The result is predictive logistics, where processes within the supply chain are altered to create added value for the entire ecosystem of suppliers, retailers, shippers, and carriers. This increases both the flexibility and resilience of operations within the supply chain. The outcome: companies can quickly respond to any type of disruption.

Predictive Transportation is already having a significant positive impact on the way companies operate and succeed, especially those brave enough to embrace digital transformation. In 2022, the use of AI-based platforms will continue to rise and come into focus for the entire industry.

Utilizing Technologies to Support Employees

Given the ongoing labor shortage, companies in the logistics industry will have no choice but to relieve their employees with the help of technology. The application of technologies can assist employees in performing their work more productively and efficiently while reducing repetitive tasks. This will be crucial in meeting customer demands and retaining existing employees.

At the heart of these efforts is process automation. When implemented correctly, it can lead to significant efficiency gains. For example, optimized transport monitoring that incorporates RTV data can reduce the number of required check-in calls by up to 80 percent. Since the status and location of a shipment can be retrieved in real-time, no further inquiries need to be made with the driver. Therefore, it is worthwhile to automate traditionally labor-intensive, repetitive tasks like these. This way, companies can manage their resources more effectively and enable their employees to focus on strategic tasks.

And this is just the tip of the iceberg: companies can also take it a step further by integrating RTV data into broader planning processes. This allows employees to make decisions better and faster while working as efficiently as possible. Regardless of which approach companies choose, it is already clear: employee empowerment will take on a whole new meaning this year.

Sustainability Will Be at the Forefront

As in the previous year, building environmentally friendly supply chains will gain increasing importance. The pressure on companies to reduce their CO2 emissions and promote sustainable processes is rising.

Today, environmental awareness and sustainability are more important to consumers than ever before. It is therefore no surprise that meeting customer demand for eco-friendly products now has the second largest influence on sustainability efforts in the planning and implementation of supply chains.

Companies must now pay increased attention to the environmental impacts of their supply chains and take measures to reduce their CO2 footprint. RTV data can assist in this as well. By using RTV data, companies can reduce empty miles and better align capacity and demand. Furthermore, integrating tools for precise measurement of emissions across the entire supply chain and all transport modalities can help control and reduce future emissions.

Logistics companies can no longer afford to treat sustainability as a secondary issue. This year, sustainable initiatives will be integrated into the core of supply chains to achieve visible progress towards climate-neutral transportation worldwide.

Jesper Bennike is Executive Director at Sixfold, Europe’s leading service provider for Real Time Visibility in the supply chain. He worked for over a decade in the global semiconductor industry for world-leading companies such as Texas Instruments, Lumileds, and Seoul Semiconductors. In 2015, Jesper co-founded GateHouse Logistics and built the company into one of the leading visibility providers for full loads in Europe. Jesper has a passion for the transport technology business and works on technologies that not only improve customers’ EBIT but also create a better working environment and genuinely impact carbon emissions. Jesper’s team at Sixfold focuses on building and operating the world’s largest real-time data connectivity network, providing all stakeholders in the supply chain with a single data platform.www.sixfold.com

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