As the transportation and logistics industry recovers from the global COVID-19 pandemic and the damage it caused to the supply chain, we are now confronting new challenges and an unpredictable economy in the coming year.
The article below are 6 predictable trends in 2023.
1.Merger and acquisition activity will continue into the new year
The pandemic caused the number and revenue of logistics companies to reach previously unheard-of heights. Private equity firms willing to invest in businesses that were growing quickly as well as business owners looking to sell at record high valuations were interested in this. However, there were other factors, such as the state of the economy, that affected merger and acquisition activity.
The high level of M&A activity in the transportation and logistics sector is expected to continue in FY 2022, according to a PwC mid-2022 study, as companies address a number of challenges. Due to the uncertainty surrounding new COVID-19 versions, the war in Ukraine – a lack of supplies and equipment, as well as normal supply chain disruptions, and other factors, many businesses are considering near-shoring opportunities and working to increase their supply chain control.
Even though M&A is slowing down, many businesses are still looking to be acquired or bought. Private equity investors pulling back from logistics investments will lead to an increase in strategic acquisitions, where a larger company buys a smaller one that offers a new clientele or service offerings.
A good opportunity to assess your entire people strategy is workforce optimization, which is connected to M&A activity and may involve outsourcing.
- Logistics companies are expanding offerings and investing in smart implementations
Customer expectations are the most significant driver of change in the logistics sector, according to an Accenture poll of logistics executives. Logistics companies are expanding the services they provide and investing more to gain a competitive advantage. The World Business Council for Sustainable Development refers to this as eco-efficiency since it enables you to generate more goods and services while consuming fewer resources.
Logistics providers believe that their clients want them to provide a broader range of logistics services, “either by expanding their service portfolios to include upstream and/or downstream solutions, or by diversifying their current services across more geographies, industries, or modes of transport,” according to the study.
3.Carrier cycles are normalizing
Since the pandemic’s cycles were peculiar and impossible to predict, finding a carrier to carry a load was typically a last-ditch effort. Despite the current state of the economy, anticipate a return to more regular cycles and the chance to choose carriers more carefully.
Brokers and shippers had to bring on new, little players, regardless of their skill level, because of a carrier shortage during the outbreak. Brokers and shippers who joined the market during COVID-19 are only just beginning to understand how it actually functions and are not familiar with its typical cycles. Because capacity is stabilizing, brokers and shippers may now be more selective when selecting the best carrier for the load.
The market can be highly cyclical and turbulent. While your volume and margins may rise one week, you never know what will happen the following week. Finding clients and suppliers is essential to the survival of any business.
4.Companies will continue to embrace remote-work options
Transportation and logistics professionals are in high demand. The term “silent quitting” has been used throughout 2022, and many organizations are still figuring out the best ways to keep job opportunities in the face of these workforce shifts.
Important questions to ask are “what is the employee experience?” and “what is the future of work?” The ability to anticipate personnel needs and support the hiring of new groups across numerous industries will be crucial for business success in 2023.
But what options do supply chain leaders have?
Companies employ a range of tactics to draw in new employees and keep the ones they already have, such as clear career paths, growth possibilities, and flexible scheduling. Additionally, there is a potential to put automation technologies in place that allow for remote labor and continuous operation of ports and warehouses.
Businesses can also outsource supply chain jobs by using managed solutions from qualified logistics service providers. This enables you to manage logistical operations effectively without having to recruit and train staff for such tasks.
5.Outsourced consultancy and IT talent will grow to implement new technologies
In addition to the pressing need for better educated, more tech-savvy individuals in the workplace, corporate executives’ top priorities today include automation, digital transformation, and data analytics. But along with it comes the need to recruit more experienced workers who excel at getting the most out of these freshly adopted technologies. After all, a computer cannot resolve a delivery issue by properly communicating with a client.
Advisory firms are increasingly being used in the sector to guide the strategy, implementation, and deployment of these technologies. Due to the significant lack of IT development talent in the United States, these engagements also commonly involve hiring outsourced IT talent, especially for customizing and onboarding platforms.
6.Companies will increasingly adopt advanced technologies for employee training
Artificial intelligence is one of the data-driven technologies that is altering business the most quickly. According to a NewVantage study, nine out of ten businesses continue to invest in AI.
One area of company where process improvement has occurred is employee development. Each company’s hiring, onboarding, and professional development procedures must incorporate AI. According to a Gartner prediction, 20% of training content will be written by AI by 2025.
More firms are considering micro-training options because they greatly speed up new hire onboarding and result in significant efficiencies. Micro-low training’s cost and proven effectiveness may enable workers to be more productive and engaged at work.
In conclusion, no matter what happened during the pandemic, we are now in the new normal and need to continue to be vigilant for changes that may happen shortly. Recognizing supply chain trends, technological innovation, adaptability, and flexibility are necessary for success. Although the market is continuously changing, you may anticipate consequences by understanding new trends and how they might impact your company.
Reported by Kylie @WeDo 2022-12-26
