Shipping & Logistics in 2025: 4 Trends You Need to Know

The impact of the pandemic on the shipping and logistics industry has been far-reaching, with enterprises compelled to re-visit their supply chain strategies. Fresh COVID-19 outbreaks continue to further jeopardize already strained global supply chains. China’s efforts to curb the spread of Omicron resulted in the closure of shipping terminals, in turn, leading to a logjam of container ships. Similar scenes were witnessed across US and European ports that experienced congestion arising from a massive cargo surge. Furthermore, the severe labor shortage in the US has exacerbated these challenges. While job openings have exceeded pre-pandemic levels, the labor force has contracted by about four million.1 Problems aside, the pandemic has triggered a mindset shift among enterprises that are now looking to adopt digital innovation to improve internal efficiencies and navigate through a difficult external environment. A research report from WNS and Corinium Intelligence, evaluating the state of digital transformation, reveals that 60 percent of shipping and logistics companies have accelerated their automation projects by at least two years due to the pandemic. At the same time, 50 percent believe client-facing business processes will be fully digital within the next two years. With funding for digital solutions in shipping and logistics only set to increase, the period through to 2025 will see capabilities grow even further. Here, we explore four trends that will define how global shipping and logistics companies function in 2025 and beyond. 1 Real-time Visibility Driven by Big Data & Digital Twins Consolidating and centralizing globally Connectivity also sits at the heart of this future. dispersed operations while maintaining As more elements of the infrastructure are country-specific nuances represents a brought into the Internet of Things (IoT) fold, significant challenge for the shipping and shipping and logistics companies can begin to logistics industry. However, it’s a challenge that achieve real-time visibility into their operations. enterprises, led by digital and automation capabilities, can meet. Armed with digitization and automation, one of the leading shipping companies gained a Big data analytics is a case in point. It can, real-time view of all operations, reduced costs amid increasing complexity and accelerated and eliminated errors. Shipping and logistics change, help logistics companies achieve enterprises will take such innovations further increased agility, efficiency and profitability. and build hyper-immersive digital twins of their wns.com 01

operations that offer a real-time view of the their orders and to-the-minute accuracy on entire value chain and an understanding of the when they can expect to receive deliveries. impact of each action. The Port of Antwerp is digitizing its radar infrastructure to complement Last-mile innovations such as self-driving trucks its digital twin technology. This will see and drones will contribute to this future, capabilities evolve from situational awareness generating real-time data that will be directly about the port to predictive behavior.2 communicated to relevant customers. Meanwhile, freight tracking software, devices As connectivity enables real-time visibility across and sensors will do the same, creating greater the entire value chain, enterprises will soon supply chain visibility and transparency for both deliver relevant insights to their customers too. enterprises and customers alike. By 2025, each customer will be provided with seamless, real-time updates on the status of 2 Human-Machine Collaboration for Automated Planning While Artificial Intelligence (AI) has been close analysis of several hundred routes and leveraged to smartly transform transportation schedules.4 AI can automate the analysis to and route planning, we expect to see an identify the ideal candidates and pass this on increase in the application of augmented to human planners to finalize. The integration intelligence in logistics planning. Gartner of human intelligence and AI can help predicts that by 2030, AI augmentation or eliminate manual errors, improve efficiencies augmented intelligence will leapfrog other and reduce costs. kinds of AI implementation to constitute 44 percent of the overall AI-derived value.3 One of the biggest advantages of augmented intelligence is predictive alerting. Human A highly specialized activity such as logistics planners can use predictive analytics-based planning requires the inputs of experienced intelligent alerts to accomplish a number of human planners while being backed by the important activities, including calculating the ability of AI to automate manual and repetitive arrival time of vehicles, anticipating equipment tasks. For instance, carrier selection is a repair and goods damage, and planning for a repeatable but complex process that requires a spurt in demand. wns.com 02

3 Hyper-local Logistics The next five years will see enterprises shrink and develop in-house sourcing and delivery options onshore their supply chains, welcoming a new moving forward. era of hyper-local logistics. It’s a shift driven by two converging factors: the need to build At the same time, consumer expectations are on resilience in the face of global disruptions and the rise. The global same-day delivery market growing consumer demand for same-day — and had a valuation of USD 5.78 Billion in 2019 and is even faster — delivery. expected to reach USD 20.36 Billion by 2027, registering a compound annual growth rate of The unavailability of suppliers during the 21.1 percent over the said period.5 In line with this pandemic forced companies to look for local change, a new generation of hyper-local logistics supply chains to augment shipments from services is emerging. For example, a Swedish overseas. To eliminate single-source retailer recently invested in a logistics platform, dependencies, product integrators, sub-system Urb-it, which provides last-mile deliveries across suppliers and component suppliers will have to Europe from hyper-local hubs.6 4 Sustainable Solutions Underpinning the next five years of digital recently launched a Greenhouse Gas (GHG) transformation in the shipping and logistics emissions tariff, ensuring that sustainability is industry will be a shift towards sustainability. placed front and center of the shipping Next-generation connectivity will enable industry in the years to come.9 Similarly, improved decision-making, helping enterprises Maersk is one of the 60 commercial groups to strike the right balance between humans and have launched an initiative to achieve zero machines for ultimate efficiency. carbon emission by 2030.10 Already, innovations are helping this era emerge. The turbulence caused by the pandemic has Amazon recently co-founded The Climate compelled shipping and logistics companies to Pledge, a decisive step in its pursuit of achieving fast-track their digital adoption and build net-zero carbon emissions by 2040.7 A North resilience through insights-led innovation. American freight company recently invested in a Companies are now gearing up for the future by battery-powered locomotive as a part of its building real-time visibility, harnessing 8 sustainability strategy to reduce emissions. collaborative intelligence, embracing hyper-local logistics and enhancing sustainability. Within shipping specifically, the need for sustainable innovation is growing, with several ports launching initiatives to encourage companies to reduce the carbon footprint of their passages. The Panama Canal, for example, wns.com Know more about WNS’ digital solutions for the shipping and logistics industry 03

REFERENCES 1 https://www.mckinsey.com/business-functions/operations/our-insights/navigating-the-labor-mismatch-in-us-logistics-and-supply-chains 2 https://www.freightweek.org/index.php/en/latest-news/6335-port-of-antwerp-invests-in-radar-infrastructure 3 https://www.information-age.com/ai-augmentation-trillions-business-value-2021-gartner-123484535/ 4 https://www.forbes.com/sites/insights-penske/2018/09/04/how-artificial-intelligence-and-machine-learningare-revolutionizing-logistics-supply-chain-and-transportation/?sh=bad718858f5d 5 https://www.globenewswire.com/news-release/2021/06/07/2242542/0/en/Same-Day-Delivery-Market-to-Garner-20-36-Billion-by2027-Says-Allied-Market-Research.html 6 https://apex-insight.com/ikea-owners-invest-in-urb-it-sustainable-urban-logistics-platform/ 7 https://sustainability.aboutamazon.com/?utm_source=newsletter&utm_medium=ofd&utm_campaign=ec&utm_term= sustainability092019use 8 https://electrek.co/2021/11/04/cn-purchases-battery-electric-freight-locomotive-from-wabtec-to-support-sustainability-goals/ 9 https://www.plenglish.com/news/2021/12/01/panama-canal-to-encourage-sustainable-shipping/ 10 https://www.reuters.com/article/us-climate-change-un-shipping/shipping-sector-sets-course-for-zero-carbon-vessels-fuel- by-2030-idUSKBN1W81B8 wns.com 04

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