Ti and Bollore Logistics’ latest survey, The Future Of Freight Forwarding In A Post-Covid World, provides clear evidence of major operational shifts in modal choice, freight purchasing patterns, sourcing networks and outsourcing strategies and plans for further changes in the medium term.
The new survey of over 400 logistics professionals reveals a very high expectation of change, with some 98% of respondents expecting Covid-19 to continue to shape their supply chain over the medium term. That statistic tells us that change is coming, but the more detailed results of the survey show that the scope and pace of that change will be unlike anything we have seen since the financial crisis of 2008, accelerating pre-existing trends and re-ordering priorities.
The most tangible manifestations of the changes to come from Covid-19 can be seen when assessing operational choices in the supply chain. For instance, 28% of respondents now plan to shift volumes away from air freight in favour of other transport modes, largely to secure capacity and lower rates after large scale disruption in the air freight market. This switch extends the shift away from air freight towards other modes that had already been seen prior to Covid-19, driven by new multimodal options on the Asia-Europe trade and with the proliferation of new cool chain sea freight containers.
The survey also found that respondents will be seeking more flexible capabilities in the future and are planning to alter their purchasing patterns to enable this. Of respondents, 64% plan to make more use of the spot market to enable them to more easily surge capacity and secure better rates. Meanwhile, 25% of participants will use more digital logistics offers in the future, indicating that the need for greater visibility, reactivity and flexibility appears to be accelerating the trend towards digitalization.
It isn’t only purchasing habits which will change as a result of Covid-19, but purchasing criteria too. Some 76% of respondents believe the crisis has increased their demand for real-time visibility. Visibility is key in implementing flexible solutions and around two thirds (64%) of survey participants plan to introduce more supply and flow-planning flexibility as a result of the Covid-19 pandemic. Flexibility can help improve supply chain resilience and 56% of respondents reported that they plan to improve their business continuity planning in the future to better cope with future crises.
Given that visibility is so important in developing flexible and resilient supply chains, and so many companies are planning to develop their supply chain resilience we are likely to see more companies turn to new technology to enable this shift. The survey shows that 80% of respondents are planning to continue to integrate new technology into their supply chains in the future. The participants reported plans to do this using a mix of off-the-shelf and in-house solutions, with 26% expecting LSPs to provide their own solutions. This presents an opportunity for LSPs to capture more of the value chain through their software offering in the future.
Perhaps even more significantly, 67% of respondents agree that sustainability will be a key factor in the development of their future supply chain. Given the increasing priority being granted to sustainability and the overhaul supply chains the respondents are planning, we should see sustainability strategies given greater priority in operational decisions for more companies in the next few years.
To find out more about the survey and to download the whitepaper containing the key findings and analysis, please CLICK HERE.
Source: Transport Intelligence, September 22, 2020
Author: Transport Intelligence
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