The Logistics Industry is currently facing many challenges that are hindering its promising success and growth. Most are due to external sources that are beyond the control of those within the line of business. With increased numbers of parcels needing to be delivered due to the rise of online orders during the COVID-19 pandemic, the strain is starting to be felt.
The Current Challenges Faced:
Labor shortages
We are currently facing a global staff shortage, and this does not exclude the Logistics industry; 90% of businesses are expected to experience a staff shortage in 2023. With the lack of skilled workers, the length of delivery is extended due to the time it takes to unload and ship back shipping containers being much longer than before. Due to this, increasing amounts of skilled migrants are being employed to help the industry cope, and in-house upskilling and training are one of the main goals for their current workforce in order to get the most out of what they have. Another aspect to deal with this problem is the uptake of automation.
Rising Costs
In light of the ongoing cost of living crisis and escalating expenses across all areas, including freight and warehousing, individuals within the industry are compelled to explore more economically efficient approaches to sustain their operations. The surge in freight costs has skyrocketed in recent years, largely attributed to global events such as the Ukraine-Russian conflict and the obstruction in the Suez Canal. These international incidents have led to significant disruptions in shipping routes, forcing freight carriers to navigate considerably lengthier paths, thereby inflating costs. When we examine the cost of transporting goods from China to the UK a few years ago and compare it to the present, there has been a staggering increase of 350%!
Securing cost-effective warehousing solutions poses a formidable challenge for the logistics industry as the construction of new warehouses or leasing warehouse space is deemed economically unviable due to the escalating expenses associated with materials, supplies, and the consistent yearly increase in industrial rent, currently averaging at 14.9%. The search for suitable storage facilities becomes particularly arduous in a climate where costs are rising across the board. However, viable alternatives do exist, with one noteworthy option being fabric shelters like those offered by Allshelter. These structures combine lightweight design with exceptional durability, ensuring reliability in all environmental conditions.
What sets them apart is their adaptability, allowing for relocation as needed and offering flexibility unmatched by more permanent structures. Notably, these dome shelters create an ideal warehousing environment as they require no interior support beams, optimizing the available space for inventory storage.
Furthermore, the translucent high-density polyethylene fabric used in these shelters allows for natural lighting to permeate the interior. This not only enhances the working environment but also reduces the need for artificial lighting, thereby curtailing operational costs. Additionally, the quick turnaround and installation time of these fabric shelters make them an attractive solution for addressing the pressing warehousing challenges faced by the logistics industry.
Customer Expectations
Managing customer expectations can be quite tricky as consumer behaviors have changed in the last three years due to COVID-19 and the rise of online shopping, as people spend most of their time inside their own homes for safety. With global e-commerce sales exceeding 5.5 Trillion dollars at the end of 2022, which is the highest it has ever been and is on a steady incline. Same-day delivery is fast becoming the household norm, especially for those who live in the US or in major cities, meaning that the demand for the industry to constantly improve their speed and reliability is adding a lot of pressure. Alongside this, customers are demanding a more sustainable approach to deliveries despite the mass amount of orders that come in daily.
One effective strategy to better prepare for these expectations is establishing facilities designed to store products that can be swiftly dispatched on the same day to meet the demand. Employing fabric shelters serves as an excellent approach, given their portability and short lead time. This translates to a quick installation process, enabling businesses to become operational ASAP and offering the flexibility to relocate to different locations if needed.
Natural Disasters
This year has already shown a multitude of freak weather incidents across the globe, including heatwaves, floods, and fires, amongst others. These events are ever-increasing and don’t seem to be slowing down or getting better any time soon. To illustrate, in regional Australia, intense rainfall led to a train derailment that had far-reaching implications for freight transportation companies across the nation. The disruption persisted for weeks, resulting in extensive delays. As the frequency of such weather events is anticipated to rise, there is the threat of more incidents that disturb the logistics industry. Such unpredictable weather patterns are destined to harm vital infrastructure such as roads, bridges, and tunnels, which will stop the movement of deliveries across the globe. This is something that is nearly impossible to prevent.
Natural disasters pose a potential threat to warehouses that store inventory. Numerous buildings lack the resilience to endure extreme weather conditions. In contrast, Allshelter’s fabric dome shelters are purposefully constructed to withstand such events. Engineered to endure severe cyclones, fires, lightning, heavy rain, hail, and earthquakes, these fabric shelters offer a cost-effective and robust solution for safeguarding valuable assets and materials, among other things. The logistics sector could greatly benefit from making such an investment.
Cybersecurity Risks
As our society continues its technological evolution, the realm of cybersecurity presents a growing concern for numerous businesses, particularly those operating within the logistics industry. 2022 witnessed a troubling surge in data breaches, raising apprehensions about the security of digital systems. With the pervasive trend of increased complexity and digitalization in most operational systems, these advancements have become prime targets for cyberattacks, including ransomware and phishing attempts. As the logistics industry increasingly relies on these digital systems, the looming threat of data breaches remains a significant challenge to contend with.
