How Businesses Are Managing Logistics Challenges In 2022

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How Businesses Are Managing Logistics Challenges In 2022

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The logistics sector is among the most affected by the pandemic-induced turbulence.

While it’s been well over two years since the pandemic first hit, the logistics sector continues to battle through the problems caused by the pandemic.

Merchants have been sitting on unmoved inventory for over a year. Not only that, transportation restrictions continue to bottleneck supply chains and their ability to meet growing consumer demand. 

The good news is, new innovations paved ways for businesses—in and out of the logistics industry—to maneuver around these challenges. 

Let’s look at some ways businesses are maintaining efficiency across the supply chain. 

1. Supply chain localization

Thanks to the pandemic, international supply chains are riddled with disruptions.

Freights are being delayed left and right. Social distancing and quarantine protocols across borders also sprinkle doubt over the reliability of shipments and fulfillment systems.

To avoid disruptions, more and more businesses have localized their supply chains. This has the added benefit of faster fulfillment. 

Globally, eCommerce sales are expected to hit over $5.5 billion by the end of 2022. With more customers shopping online, businesses are under pressure to provide cheap, fast, and reliable fulfillment options. 

Other than the aforementioned benefits, here are some of the advantages of localized supply chains:

  • Better supply chain security

  • Avoid higher transportation costs due to COVID-19 restrictions 

  • Reduced carbon footprint

  • Support local manufacturers 

2. Self-service, last mile deliveries

Last mile deliveries are very important to the customer’s online shopping experience. 

It needs to be transparent, secure, and—above all—convenient. Especially now that customer expectations in regard to online shopping have skyrocketed since the pandemic. 

Businesses and logistics companies have had experience with AI to streamline last mile deliveries. It can help with route planning, visual inspections, managing unexpected events, and even customer service with the help of chatbots. 

Small businesses and individual entrepreneurs can also rely on C2C last mile delivery solutions. 

Mileberry, for example, is a San Francisco-based startup that aims to make last mile deliveries safer, as well as more economic and convenient. Their network of smart “click & collect” machines enable businesses, logistics companies, and entrepreneurs to provide contactless and self-service deliveries to consumers. 

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Everything needed for storage, tracking, and pickups can be done through a mobile app. As such, users can also take advantage of Mileberry’s parcel lockers for the delivery of personal packages. 

3. Click & Collect for returns

With eCommerce sales on the rise, businesses not only have to worry about faster, on-demand deliveries. They should also pay attention to efficient and cost-effective returns management. 

Similar problems brought about by the pandemic must also be tackled when it comes to returns. There are quarantine procedures, social distancing, and the usual barrage of delays due to rapidly-changing border protocols. 

The longer returns take, the shorter the customer lifetime value becomes. 

Luckily, returns can also be streamlined through click & collect systems. Again, platforms like Mileberry can provide the facilities and software necessary for this model. 

It’s also important for businesses to review their returns' policy, specifically in peak seasons like Holidays. Prioritize customer satisfaction by offering extended return windows, free return shipping, and hassle-free refunds. 

4. Crowdsourced delivery services

The pandemic—on top of the current driver shortage—makes it tougher and tougher for businesses to ensure timely deliveries to consumers. 

Platforms like Roadie and Postmates offer flexible, fast, and reliable delivery services to businesses. 

Some small businesses even rely on crowdsourced delivery services exclusively. Most, however, only use them as per demand, particularly during peak hours. 

Crowdsourced delivery services make rapid last mile deliveries possible without having to put together an in-house delivery staff. Multiple logistics partners are also useful as a risk management strategy by making sure someone is available at all times.

Just remember that in-house deliveries are more cost-effective in the long run, especially considering the fees associated with crowdsourced deliveries. Businesses can also have more control over the reliability and quality of service.

5. Boosting driver retention

Drivers can make or break the success of a business’s supply chain. 

Unfortunately, competent and reliable drivers are increasingly hard to find.

Rather than finding new drivers, businesses should shift their efforts and investments to driver retention instead. This approach will have lasting benefits like better performance and lower overall training costs. 

Some ways businesses improve driver retention are:

  • Technology-driven route optimization

  • Pay per drop for last mile deliveries

  • Mental health support

  • Performance-based rewards

  • More focus on vehicle maintenance and safety

6. Automated drone deliveries

Delivery drones are still yet to see wide-scale adoption. But for businesses that have access to them, it could be the answer to their logistics problems.

Drones can make deliveries faster and cheaper than traditional delivery methods. The drawback is, they can only be operated within certain communities and under the right weather conditions. 

Currently, delivery drone technology is being headed by a handful of key players, like Wing and Amazon Prime Air

7. Alternatives to wholesale liquidators

Due to the pandemic, countless businesses are left holding on to unmoved inventory for over a year.

Logistics-wise, it’s only reasonable to liquidate and free up space and reduce warehousing fees. A more profitable solution, however, is to sell your stock keeping units (SKUs) to Amazon resellers. 

Buy My SKU, established in 2020, gives businesses a more cost-effective way to cash in their inventory. It allows Amazon retailers to list their SKUs for sale on a virtual marketplace—without hidden charges. 

Other alternatives are pop-up shops and bundling products for sale on social media marketplaces. Businesses may have to drop the price to attract potential resellers who are looking for new inventory.  

What logistics will look like moving forward

The middle of 2020 and 2021 has been a period of learning and changes for businesses. 

In terms of logistics, eCommerce, transportation restrictions, and rising customer expectations have been the focal points of adjustments. And to accommodate them, business leaders need to embrace trends and new technologies that modernize supply chains.  

It’s also vital for any logistics manager to have an always-ready, proactive mindset to keep supply chains operating flawlessly. Coming into 2022, they can expect more automation, localization, and people-focused initiatives permeate the world of logistics. 

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How Businesses Are Managing Logistics Challenges In 2022

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