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International Forwarding Association Blog » European logistics companies » Logistics Sector Adapting to a Challenging Environment through Digitization
supply chain

Logistics Sector Adapting to a Challenging Environment through Digitization

Many industrial sectors have been on the losing side on a global scale, either struggling to stay afloat or failing. Some companies do not have the strategies, capabilities, capacity, and cash reserves to continue operations while others stayed open to hardly break even.

 

Logistics Sector Digitization

 

The good news is that the logistics and distribution sector somehow managed to adapt despite the devastating impact of the global pandemic.

Problems That the Logistics Sector Faced

For the majority of operators, the sector has been operating under pressure and in a very challenging environment due to reduced output and demand, which have a strong impact on the global supply chain. In addition to preventing Covid-19 infection onboard, other issues have been the lack or shortages of basic and medical supplies, slower operations and restrictions in ports, staff exhaustion, and crew not being able to board or disembark because of port and airport restrictions.

How the Sector Adapted

With China on the way to economic recovery and demand for exports on the rise by mid-April, economic experts point to an upturn in the logistics and distribution sector. As the pandemic is here to stay for the foreseeable future or at least in 2021, many operators chose to modernize their systems through digitization. With employees working from home, many companies realized how important it is to adopt digital solutions.  Experts also note that increased automation is a positive development that will result in improved transparency and efficiency, reduced risk, lower costs, and reduced carbon dioxide emissions. In fact, digitization was seen as crucial even before the onset of the global pandemic. In case of loss of coverage or signal, operators may not only be unable to ensure crew safety but risk incurring significant losses. Given that seaport operators load and unload huge amounts of cargo on a daily basis, secure and guaranteed connectivity is simply a must.

Other tools that can help improve efficiency include digital solutions for reduced energy consumption, including data collection, machine leaning, and deep learning. Smart maintenance can also be carried out with the help of sensors and condition-based monitoring. Remote inspections have also been proposed as to reduce the costs associated with dispatching staff to conduct onsite inspections. In addition, digitization also involves centralization of staff to avoid the risk of crew exhaustion on board. Operation control centres can be tasked with remote control, data processing, and monitoring.

Experts also stress on the fact that human error not only compromises crew safety but can cost a lot of money, resulting in lost revenue and profits for operators. When email attachments are missing or containers are wrongly labeled, problems occur. When staff in one country is unable to access information in another because of time zones, problems also occur. International freight forwarders can no longer afford human error, especially in light of the ongoing global pandemic and economic crisis. Digitization is increasingly about risk management through improved transparency.