BY BEN AMES, SENIOR NEWS EDITOR
2020 MARKET OUTLOOK MARKETTRENDS
Going into the new year,
the logistics sector faces
fierce headwinds that include an
ongoing labor shortage, freight-rate
volatility, and economic uncertainty.
New technologies and strategies may
be key to weathering the storm.
What does 2020 hold
for logistics leaders?
THE ONGOING LABOR SHORTAGE IS ONE OF THE
most pervasive trends to sweep the logistics industry in
years. With the U.S. unemployment rate at its lowest point
in half a century, businesses are scrambling to stay fully
staffed even as they search for ways to scale up and cope
with new challenges.
That balancing act gets even harder in tricky economic
conditions. Heading into 2020, the market faces headwinds
like a global manufacturing slowdown, shifting tariff rates,
red-hot e-commerce growth, and the “Amazon effect,” as
online shoppers seek ever-faster and cheaper home delivery. So as logistics leaders prepare to navigate those dangerous waters, they are increasingly turning to new strategies
and technologies.
To better understand how this will all play out in 2020,
we consulted with experts from different corners of the
industry. Their overall advice for the new year? Buckle up;
it could be a bumpy ride.
ROBOTS CUT WASTE, NOT JOBS
Automation is a crucial tool for helping organizations
cope with a shortage of workers, especially for jobs that
are located far from population centers, such as in rural
warehouses. In the year ahead, that labor shortage will help
accelerate the adoption of robotics and artificial intelligence
(AI) for many supply chain functions, according to the
Framingham, Massachusetts-based analyst firm IDC.
As for how quickly that will happen, the firm offered
some estimates in a recent report titled IDC FutureScape:
Worldwide Supply Chain 2020 Predictions. Among other pre-
dictions, the firm forecast that by 2022, manufacturers and
retailers will dedicate 35% of their business process budgets
to “process automation,” focusing on order, inventory, and
shipment tracking. It also predicted that by 2023, 65% of
warehousing activities will use robots and situational data
analytics to enable storage optimization, increasing capacity
by over 20% and cutting work order-processing time in half.
Despite the rising tide of automation, technology is not
expected to slash the total number of jobs in the logistics
sector, but rather to replace some unskilled jobs with high-
er-level work, according to the report’s author, Simon Ellis,
program vice president for the Supply Chain Strategies
practice at IDC Manufacturing Insights.
As companies prepare to incorporate robotics and artificial intelligence into their logistics operations, they will
need to reconcile the contradictory notions of technology
