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HUB-Supply Chain Supply Chain Industry Updates

Report Suggests Better Way to Assemble Digital Puzzle

iStock/ Nastco

Businesses in all sectors are challenged like never before to improve the visibility, agility and sustainability of their transportation and logistics networks. In the food segment, for example, consumers demand more personalized experiences, improved traceability and transparency of the products they purchase, and easier ways to shop.

“Trade globalization, digital consumers and low oil prices have all driven growth in the T&L industry while imposing new challenges,” observed Harshit Sharma, a research analyst for Lux Research and lead author of a new report. “For example, there is growing consumer demand for agility through the rapid delivery of products: Air cargo is the best means to achieve this but decreases sustainability significantly due to air freight’s high carbon intensity, not to mention that rapid delivery can also mean often engaging with new vendors, creating visibility challenges. We need to innovate to find better all-around solutions to address these challenges without exacerbating others.”

To balance these conflicting goals, Lux recommends companies embrace a holistic approach to digitalization of their supply chain and logistics processes, rather than implementing them piece by piece.

“Currently, digital transformation of logistics is in its infancy and offers a host of opportunities for further development.” Sharma said. “An underlying reason for this trend is the unfamiliarity of traditional players with digital. This could eventually lead to third-party logistics companies being phased out in favor of tech companies that offer both capital and novel technology.”

Lux, in “The Digital Transformation of Transportation and Logistics,” predicted that digital solutions will drive traditional logistics companies to consider new business models and even go asset-less. “As e-commerce continues to rapidly grow, and competition in this space escalates, major players may look to consolidate and invest in the logistics vertical to build a competitive advantage and drive competition out of regional markets,” Lux said.