DC Velocity - January 2020

NEWSWORTHY

GET READY TO LEVERAGE YOUR connectivity in the New Year. Technology will continue to shape the logistics landscape in 2020, as companies experience greater connectivity and better access to data and make more widespread use of analytics and artificial intelligence, according to Brian Hodgson, senior vice president of industry strategy for logistics technology provider Descartes.

“Transportation and supply chain [companies are facing] continued pressure to be more agile and make decisions more quickly,” due to heightened customer expectations, Hodgson said, adding that such conditions are “driving a lot of change in our customer base—[among] shippers and on the 3PL side.” As these companies adapt to the shifting landscape, Descartes has identified three key trends to watch in 2020.

First, supply chain networks are connecting logistics parties more tightly, Hodgson said, noting that the industry is transitioning from legacy point-to-point EDI (electronic data interchange) networks to real-time, API (application programming interface) collaborative networks. At the same time, new “specialty” networks have emerged that connect parties and that also integrate into the larger networks. These include real-time freight visibility; Io T (Internet of Things) networks for tracking assets such as containers, pallets, and unit load devices; and capacity networks, he explained.

Second, the explosion of data available today creates a key question for organizations large and small: How do you consume data and use it effectively? “Data as a service” (DaaS) programs harmonize data and provide it as a service for downstream applications, generating data on truck locations, warehouse congestion, trading lanes, and port volumes, he said.

Third, the ability to analyze data with more sophisticated tools, including AI (artificial intelligence), will create a wave of better decision-making for many companies—the ultimate answer to the need for greater supply chain agility, he said. “New technology for visualization and benchmarking is making its way into operational teams to enable more agile supply chains. As the data quality [improves], artificial intelligence can further accelerate supply chains by using data to [enhance] carrier selection, identify new sources of products, classify products for global trade more quickly, [and so forth].” n

—Victoria Kickham

The U.S. economy is expected to sustain its long expansion in 2020, and the commercial real estate market will follow suit, according to a forecast from real estate services firm CBRE.

In its 2020 Real Estate Market Outlook, CBRE said it expects “tempered growth” in the U.S. commercial real estate market this year due to uncertainty over trade negotiations, weakness in the manufacturing sector, and the upcoming presidential election. Investment volume should be on par with the last two years, CBRE said—between $478 billion and $502 billion—making it one of the strongest years on record.

“[The coming year] will bring deceler-
ation on a few fronts, but this still is
an expanding economy and a flourishing
property market benefiting from a robust
job market, solid consumer confidence,
and low interest rates,” Richard Barkham,
CBRE’s global chief economist and head
of Americas research, said in a statement
announcing the 2020 report. “We’ll see
resilience across asset classes such as office,
retail, and multifamily as demand contin-
ues to buoy those sectors.”
In the retail sector, the researchers point-
ed to the conversion of malls into mixed-
use complexes as a growing trend in the
year ahead. As for the industrial and logis-
tics side, the researchers said it will be
tough to sustain the sector’s 38 consecutive
quarters of positive net absorption in 2020,
as vacancies remain tight. Supply is expect-
ed to outpace demand by 20 million to
30 million square feet, CBRE said, and the
vacancy rate should remain near historic
lows. “Overall, the market will remain sta-
ble as e-commerce penetration continues
to impact supply chains. As operations
become more complex for occupiers, there
will be a heightened focus on outsourcing,
paving the way for growth in the third-par-
ty logistics (3PL) sector.” n