While the transportation and logistics industry is emerging from the global COVID-19 pandemic and the pain it has inflicted on supply chains, it faces new challenges and economic uncertainty in the coming year.
Here are six trends to expect in 2023.
Merger and acquisition activity will continue into the new year. Logistics companies grow in size and revenues like never before during the pandemic, with private equity firms looking to invest in fast-growing companies or looking to exit when valuations hit all-time highs Received attention from the owner who is. However, other factors, such as economic conditions, also played a role in driving M&A activity.
According to a mid-2022 report by PwC, “High levels of M&A activity in the transportation and logistics sector are expected to continue in 2022 as companies grapple with many challenges. New variant of COVID-19 Ukraine “Uncertainties related to wars in the world, shortages of materials and equipment, and disruptions across supply chains are causing many companies to consider near-shoring opportunities and seek more control over their supply chains.”
“M&A activity has slowed, but there are still many companies that are acquiring or considering acquisitions,” said Peter Rentschler, chief executive of Metafora, a consulting and technology firm specializing in the transportation and logistics sector. said. “Private who have not yet invested in logistics, he is seeing equity firms pull out. It will bring prints and service offerings.
“M&A activity involves workforce optimization. This is an ideal time to consider your overall talent strategy, which can include outsourcing.”
Logistics companies are expanding their services and investing in smart implementations. To gain a competitive edge and deliver more value to their customers, logistics companies are increasingly expanding the services they offer and investing more to ensure proper implementation.
Evolving customer expectations are the most important driver of change in today’s industry, according to a survey of logistics executives conducted by Accenture. Logistics companies believe their customers want to offer a wider range of logistics services, according to the report. “
“We see many companies expanding their services to better support their customers and looking for new avenues for growth,” says Rentschler. “This is an ideal time to reduce investment in new services and consider alternative or creative business models, including labor outsourcing to reduce capital expenditure and risk.”
From an implementation perspective, Rentschler says organizations are getting smarter and more mature while relying on consultants to make implementations work. “We have seen companies spend money on new technology or move roles offshore, but have only seen 5% of the potential ROI due to not properly investing in implementation. Trucking companies buy trucks and know exactly how much profit they will make, but they overlook investments like technology and outsourcing that can deliver 10% efficiency across their business.”
Career cycles are normalizing. During the pandemic, finding a carrier to transport a shipment was often insane, and the cycle was erratic and difficult to predict. Expect a return to a more normal cycle and more selective career choices despite the current economy.
According to Cassandra Gaines, CEO of Carrier Assure, during the pandemic, a shortage of carriers has forced brokers and shippers to hire regardless of quality, resulting in an influx of new and smaller players. did. “Brokers and shippers who entered the industry in the age of COVID-19 do not understand the normal cycle of the industry and are beginning to experience how it works in practice. This allows brokers and shippers to be more selective in finding suitable carriers for their shipments.”
Brandon Bay, Vice President of Corporate Strategy and Marketing, Logistics Group International, said: “In one week, the volume and margins have increased. The next week, we may hit the bottom. We have to adjust very quickly. is.”
Companies will continue to embrace remote work options. The demand for logistics and transportation talent has never been higher. It was a problem before the pandemic and the big resignations, and it’s only getting worse. Employers deploy multiple tactics to attract and retain talent, including improved benefits and work culture. Remote work is one of the most important options during the pandemic and may still be essential to attracting employees who expect it.
“The pandemic has changed the way people work,” Bay says. “This has forced companies and other employees to learn how to work remotely. We have a very fluid workforce that brings a sense of being able to, they can get a new laptop and continue working wherever they are. You want to invest heavily in training and advance the careers of your employees, but mobile workers are also putting pressure on team retention and growth and scaling, leaving many I think offshoring will be an option for companies.”
Outsourced consultants and IT talent grow to implement new technologies. Automation, digital transformation, and data analytics are not just a desperate need for more skilled, more tech-savvy employees in the office, they are also key priorities for today’s enterprise leaders. increase. But with that comes the need to attract more skilled workers who are good at extracting value from these newly implemented technologies. After all, a computer can’t have a meaningful conversation with a customer to solve a shipping problem.
The industry is increasingly hiring consultancies to guide the strategy, implementation and deployment of these technologies. Moreover, given the acute shortage of IT development talent for him in the United States, such efforts include utilizing outsourced IT talent, especially for platform customization and onboarding. is often
Companies are increasingly adopting advanced technology to train their employees. Artificial Intelligence is one of the fastest growing data-driven technologies transforming business. NewVantage reports that 9 out of 10 companies are making ongoing investments in AI.
One area of business where we have seen process optimization is employee training and development. AI is critical to the recruitment, onboarding, and professional development processes of any organization. Gartner reports that by 2025, 20% of business content (including training content) will be written by AI.
More and more companies are turning to micro-training technology that offers significant efficiencies, reduces overall onboarding time, and helps employees get to work sooner. Finding time for additional training and upskilling can be difficult for busy companies. With its low cost and proven effectiveness, micro-training helps employees stay productive and engaged in their roles.
The logistics and transportation industry is constantly evolving, and 2023 will be no exception as we move into an uncertain economy and the threat of recession. Our goals of resilience, efficiency, reliability, speed and quality remain the same. COVID-19 has tested our industry and forced us to adopt new technologies and business models. But whatever you want to achieve, you need talented people to get there. Building the right team is essential to achieving our 2023 goals.
Robert Cadena is co-founder and CEO. Lean Solutions Group.
