Logistics demand keeps rising, but some issues linger

//Logistics demand keeps rising, but some issues linger


Many logistics firms across the U.S. are now in ever-improving positions, thanks to the ways in which consumer preferences and modern technology have come together to create a positive situation for the industry as a whole. That trend – observed over the past several years – seems to have come to a head in 2016, as demand for logistics services continued growing but companies faced more uncertainty about the industry in a few ways.

One of the biggest apparent issues for logistics firms is the concern about the state of the economy and what impact that might have on both warehousing efforts and connected industries, according to the 28th annual State of Logistics Report from the Council of Supply Chain Management Professionals. For instance, these issues have led many companies to approach a broadening inventory with caution, because they may be concerned about the prospect of a declining economy. Moreover, the higher interest rates that are now being observed in the financial sector, as well as the strength of the dollar, could lead to higher costs.

“Even in this current uneven economy, we are seeing upticks in demand for outsourced logistics services,” said Marc Althen, president of Penske Logistics. “It is during times like these that our customers rely on us even further for increased collaboration that will result in streamlined supply chain costs.”

Another potential hurdle
In addition to the uncertainty about the economy – which most experts generally agree should get stronger in the years to come – industry insiders also believe that companies in both logistics and manufacturing continue to face a so-called skills gap as technology brings them more into the future, but workers don’t necessarily have the skills businesses need to continue evolving, according to Logistics Management. This is also the case when it comes to dealing with new or advanced software needs – such as those for inventory management software – and many companies end up having to outsource management of their software systems. That effort is made easier by the cloud, but it might not be in firms’ best interest in the long term.

Legacy issues
Thanks to recent advancements, many companies are now using the emerging technology available in the market as an opportunity to upgrade equipment they use on a regular basis, replacing legacy devices and tools after years of service, and for good reason. But this issue may be a sticking point for some firms with tight bottom lines, according to John Leonard and John Dillon of the Wynright Corporation, writing for Logistics Management. With that in mind, there are still plenty of ways to wring a little more use out of plenty of equipment while still planning for next-gen technology adoption.

The more logistics firms can do on a regular basis to assess their current needs and how they may be able to achieve given their unique situations, the better off they will be when it comes to meeting their evolving requirements. Keeping up in this rapidly evolving industry isn’t always easy, but staying on top of these issues can help companies get ahead.