The Impact of Technology on Logistics
Published at December 31, 2022

As the world becomes more connected, technology is impacting logistics businesses of all sizes. They need to find ways to streamline their processes, but they don’t have time for long-hours meetings.

The increased demand on an already overloaded logistics industry to meet both domestic and international demand for transit and import-export purposes has been increased by the growth of e-commerce and the digital economy as a result of the increase in online consumers during the pandemic.

According to Google's e-Conomy SEA 2021 research, the pandemic's effects have caused 81% of Malaysian internet users to utilise digital services today, while 43% of Malaysian retailers would not have made it through strict lockdowns without the help of e-commerce marketplaces.

As Malaysia enters the endemic phase, production and social capacity have largely been restored to 100%, but both online buyers and sellers are expected to continue doing business online.

The internet economy in Malaysia was estimated at US$21 billion (RM88.8 billion) in 2021 as a result of the rise in the use of digital services, and it is anticipated that it will reach US$35 billion by 2025.

Further, digital transformation has significantly transformed the logistics industry. To respond to customer needs and changing business conditions, here are the impacts of technology in the logistics industry.

How Technology impacts the Logistics industry

In today’s business, technology innovation is pushing the limits. For example, you’re used to having everything at your fingertips and available online.

No matter where you live, you may be able to receive a package from your online shopping order. Technology development helps businesses save costs and errors while increasing supply chain productivity.

These logistics developments have positive effects on supply chain management, international shipping, ocean and air transportation, as well as trucking transportation. Let’s take a look at how technology impacts the logistics industry below:

1. Tracking Systems

Customers used to book shipments, receive an estimated delivery date, and then remain in the dark unless they made a phone call.

However, with the technology, customers now have 24 hours 7 days a week access to shipping and tracking systems because of internet and software developments. This not only improves the user experience but also saves the business time and money.

2. Cloud logistics

Cloud services provide adaptability and direct access to essential analytics and operations software. Cloud services are enabling the expansion of highly responsive on-demand and pay-per-use business models, which are quickly taking over the logistics industry.

Although data migration and security may cause setup issues and high data traffic may slow processing times, cloud logistics is becoming an increasingly practical option due to the cost and time benefits gained.

3. Blockchain

The logistics sector may be changing due to distributed ledger technology. Blockchains can eliminate paperwork from invoices, decrease delays, prevent fraud, and lower prices throughout supply chains by reducing several layers of complexity through secure, transparent transactional relationships.

Currently, blockchain technology must prove its scalability and get past its problems of being connected to questionable coins. However, the secure connectivity that blockchain offers might significantly speed up payments and bring more transparency to a sector that can be irritating in its administrative complexity.

4. Artificial Intelligence (AI)

Smart devices will give more perceptive digital services everywhere in the future, according to this prediction.

The efficiency of the logistics process can be greatly increased by enhancing human capabilities. For example, at the warehouse and managing back-office tasks such as accounting and human resources.

AI-driven automation can be used as a predictive tool in processes like warehousing, where it can anticipate changes in demand to avoid shortages or overstocking. This automation is powered by data collected through IoT systems.

5. Internet of Things (IoT)

The Internet of Things (IoT) connectivity can increase operational efficiency, optimise consumption, reinforce operational security and be a cost-cutting measure.

Supply chains can be self-monitoring due to the ongoing flow of data between devices and logistical providers. For example, robots will be alerted by intelligent sensors in warehouse settings when orders need to be picked and packed or when supplies need to be resupplied.

6. Virtual Reality (VR)

Through the safe replication of potentially difficult situations, virtual reality (VR) recreates realistic digital settings that support immersive e-learning and the training of dangerous procedures.

Digital visualisation enables planned operational procedures and proposed construction layouts to be validated, opening up chances to streamline plans and lower costs.

Further, using data generated by IoT systems, managers may also use VR to test, operate, and maintain real assets.

7. Automatic vehicles

Business Insider reports that 53% of all transportation expenses are currently related to last-mile deliveries. More than 40 organisations continue to conduct significant testing of the technology, and driverless lorries and vans will almost surely start to have an impact in the next several years on everything from long-haul trips to last-mile deliveries.

8. Big data analytics

Supply chains are producing a flood of data, and this data is the raw material for network enhancements and structural adjustments.

Analysis of this stream of information can give insights that not only optimise operations like capacity utilisation but also foresee hazards, lower their costs, and suggest different approaches to monetize certain supply chain links.

These insights may also be predictive, enabling anticipatory inventory modifications to reduce warehousing costs and shift products closer to markets at the precise moments when those markets need them.

Wrapping up

Technology is changing the logistics industry and has the potential to impact the entire market.

By using technology in conjunction with the right processes, you can ensure that your products are delivered to your customers on time and at a reasonable price. With knowledge of how technology impacts the logistics industry, you can make the most efficient use of it in your business.

If you want to grow your logistics business with the latest technology, we provide the experts to help you build your business and stand out more. Book a call now!

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