There’s no denying that the global economy is balanced on a razor’s edge. With skyrocketing inflation, volatile unemployment, and pandemic-fueled supply chain issues, many companies are preparing for more bad news.

Fortunately, downturns are a normal part of a functioning economy. While massive layoffs and lower profit margins may cause a panic on Wall St., there’s no reason to abandon ship just yet. In hard economic times like these, the best thing to do is prepare for the worst and hope for the best. Below are 3 major concerns for the Logistics Industry and how you can prepare for them.

1. Labor and Shipping Shortages

Around the world, logistics companies are struggling to find skilled workers to accommodate a growing logistics industry. From dock workers to warehouse employees to truck drivers, employers are constantly battling to fill job vacancies.

Companies can prepare by expecting shipping shortages, delays, and other difficulties. One strategy can be working with multiple logistics companies. Through diversification, companies can choose the lowest-cost provider and ensure that their products will be delivered if another company falls through.

Further, companies can also prepare by stocking up on inventory. Rising prices and disruptions to the global supply chain are hard to predict. Rather than gambling with your inventory, try to prepare for scenarios that include delivery disruptions and shipping shortages.

2. Increased Freight Costs

Rising wages, gas prices, and inflation are causing prices to rise across every industry, including logistics. Along with events that have disrupted the global supply chain like the Covid-19 pandemic and the Ukraine-Russian War, shipping by land and sea has become exponentially more expensive.

For instance, transporting a 40-ft steel cargo container from Shanghai to Rotterdam now costs $10,522 , more than 547% higher than the 5-year average. With more than 80% of all goods transported by cargo ships, price increases in sea-shipping will be felt by consumers and businesses at every level.

Companies can prepare by taking measures to streamline their supply chains. Some companies are looking to simplify their supply chains by removing certain distributors or intermediate businesses from the process. For other companies, it may mean moving parts of the supply chain closer to home.

3. Managing Customer Expectations

As the pandemic forced everyone to spend more time at home, online shopping was revolutionized overnight. With more than 80% of Americans regularly shopping online , consumers have new expectations when it comes to shipment tracking and delivery times.

Despite America’s new obsession, many Americans are feeling the effects of global shipping delays. For instance, many consumers have been forced to wait months on furniture orders coming from overseas.

Companies can prepare by improving their customer communications. By making it clear that certain items will experience delivery delays, companies can avoid product returns, bad reviews, and other customer frustrations.

Whether our economy has already hit the bottom or not, economists believe the next few years will be riddled with continued supply chain complications. Therefore, it’s always better to create strategies that encompass a wide range of scenarios, so you can retain business growth and protect your bottom line.

As the global economy begins to settle into the post-pandemic realities of supply chain disruptions, rising costs, and international conflict, most sectors are looking to Tech firms as a solution to their problems.

In the aftermath, it feels like no other industry was hurt more than logistics. With cargo ships waiting weeks to unload inventory, factories shutting down due to mandated quarantines, and more, the pandemic revealed the numerous amount of weak points in the global supply chain.

As a result of pandemic woes and the boom in E-commerce, Logistics firms have been eager to partner with Tech firms and integrate new systems to increase efficiencies and reduce costs.

The results are as diverse as they are creative. Here are some examples of technology for logistics:

  • Big Data has provided industry leaders with advanced analytics and real-time tracking capabilities that are used to optimize routes, identify supply chain weak points, and reorganize supply chains to combat real-time obstacles like traffic, weather, and downed vehicles. 
  • AI and Robotics have been used in warehouses for years at companies like Amazon and Alibaba. However, tech firms like Geek+ and Paack are looking to make automated warehouses available to more businesses. The launch of their combined warehouse in Madrid will be the largest autonomous robot project in Europe and a shining example of how automated solutions can be integrated into entire ecosystems. 
  • Blockchain is being used to track everything from actual shipments to documents. CargoX, a leader in digital transfers for ocean freight, is leveraging blockchain to safely deliver more than 1.5 million trade and finance documents to over 100k customers. 
  • Location Technologies are being used in conjunction with warehouse robots and shipping systems to optimize inventory management by reducing asset dwell time, improving floor workflow, streamlining order fulfillment, and enhancing asset utilization. 
  • Automation for cargo ships, trucks, and drones is on the cusp of broad adoption across the industry. With companies like Walmart already testing a fleet of autonomous drones in the U.S., it’s only a matter of time before the majority of our supply chain is completely automated. 

The above examples only begin to scratch the surface of how Tech firms plan to improve the Logistics Industry using technology for logistics.

The large investments being made to upgrade and integrate new technologies prove that there is a happy marriage between Tech Firms and Logistics Firms. The improved sentiment for technology also hints at another key trend, consolidation.

In the last year, M&A in the Transportation and Logistics industry reached a whopping $246 billion, a 6% increase from the previous year. Unsurprisingly, technology-backed solutions are expected to be the driving force behind these M&As as logistic firms search for solutions to improve efficiencies and reduce costs.

As logistic firms continue to expand their ecosystems and scale up operations to meet demand from E-commerce and reduce costs, there’s little doubt that Tech firms will play a pivotal role in innovating the industry.