2023 TRENDS IN LOGISTICS

By AMANDA BOUTWELL, Marketing Communications Manager

The past three years have been challenging for businesses across the globe in practically every industry. The hardwood industry was not immune to these challenges, with labor shortages, supply chain problems, and rapidly shifting economics. Logistics companies serving the hardwood industry have been saddled with more than their fair share of headaches, forcing them to evolve to meet new challenges.

As the logistics industry continues to grow through change, a few significant trends are worth your attention. These trends can potentially revolutionize the way goods are transported and could considerably impact the bottom line for companies across the hardwood industry. The four trends worth keeping an eye on are adopting new technology, increasing sustainability, expanding customer service, and increasing employee retention.

As logistics prices are beginning to stabilize, that doesn’t equate to greater capacity for shipping. President of TMX Shipping, Curtis Struyk, said, “It is true that pricing has eased, but additional vessel space is not necessarily available because of blank sailings. Also, some inland depots are not being replenished with available equipment because of the decrease in imports, which makes it difficult to secure bookings. Rates change, and situations change, but our goal is to always provide premium customer service regardless of industry obstacles.”

Logistics companies are considering adopting various technological advancements, from EV trucks to self-driving vehicles. Though it isn’t likely that we will see logs being hauled by autonomous trucks anytime soon, the technology is being developed, and self-driving trucks have the potential to significantly reduce labor costs and improve delivery times in the future.

EV vehicles are another technological advancement logistics businesses can consider, and they play into many companies’ goals of increasing sustainability. Congress recently passed several sizeable bills to revitalize industries, upgrade infrastructure, and help the U.S. move toward a clean energy future. The Infrastructure Investment and Jobs Act and the Inflation Reduction Act include incentives like tax credits for companies investing in green transportation like EV trucks and EV manufacturing.

Not all logistics companies are on board with the move toward EV trucks at this time. Steve Zambo, President of Ally Global Logistics, disagreed, saying, “We believe there will be major limitations with EVs coming to market. Specifically, the amount of time it takes to charge and how quickly batteries drain with heavier loads. This means you will need to charge more frequently, which elongates a haul’s transport time. Added time means added cost. Yes, you save on gas, but you need to plan your route based on EV charges, and in turn, it will also elongate routes and delay deliveries. We will wait until this is further down the road before we do anything with this.”

There are some cases, however, where there may not be a choice. Illinois, California, and other states have set tighter emissions requirements that took effect in January. As a result, many older trucks are being taken off the road. It is estimated that 25% of the port drayage trucks in California do not meet the new requirements.

Meanwhile, the EPA has released much stricter emission standards for heavy trucks that will go into effect in the 2027 model year. The new EPA limits are meant to incite improvements in diesel engine performance and provide a way to a zero-emission trucking future.

Another trend technology logistics companies are embracing is real-time data processing and analytics for their warehousing. For example, companies with digitized processes that used to be done on paper are discovering that their operations have become more streamlined. By leveraging big data and analytics, logistics companies can gain a competitive edge, allowing them to modify their routes and improve customer service to stay ahead of the curve.

Real-time data processing is just one of the ways logistics companies are improving technology. Struyk points out, “At TMX, we have invested in technologies that have improved our cyber security, and we are constantly updating our Transportation Management System to help us be more efficient.”

Customer-facing technological upgrades are also trending. Zambo commented on ways Ally Global is creating forward-facing advancements, saying, “We are building a web-based low-code platform that will house all our export shipments, documents, and workflows. It will have a customer-facing dashboard. Think Domino’s Pizza Tracker for shipping. Low code is important because that means we can add features in just a couple of days instead of weeks/months. In addition to continuing to work on our new software, we are investigating various ways to utilize AI throughout our company to increase efficiencies.”

A recent survey of logistics executives by Accenture Research found that the biggest motivator for change is customer expectations. In 2023, customers are looking for a more comprehensive set of logistic services, which companies are answering with more upstream (or downstream) solutions.

One trend that (unfortunately) is not going away any time soon is finding new ways to address the labor shortage. Logistic companies are doing what they can to hire and retain employees using various methods. Several have increased salaries, and others have added benefits beyond standard insurance and 401K – like offering pet insurance, free gym memberships, and tuition reimbursement.

Some companies have even hired in-house recruiters, like Ally Global Logistics. Zambo explains, “In 2022, we decided that to build AGL properly, we needed to hire an in-house recruiter to focus solely on hiring. Our recruiter, Angelina Brown, sits in our Jacksonville, Florida, office. She is responsible for every candidate we hire, as well as building relationships with local universities to establish a pipeline of candidates. This strategy worked well in 2022 for us.”

Allowing employees to work from home is not something many Logistics companies can incorporate into their businesses. Struyk said, “Ever since we improved our cyber security software and moved towards a cloud-based system at TMX, it has allowed our employees to access files from home more securely. We still believe there is no replacement for in-office collaboration, which allows for better communication and teamwork for our employees.”

Zambo agreed, noting, “Ally Global has not embraced remote work culture. It is possible, but it creates too many inefficiencies. First, in international logistics, we are still utilizing physical paper. We need to send physical documents to the bank, our clients, and their customers. It is not possible to have a documentation team 100% remote that needs to send out courier packages, receive courier packages and produce sets of documents remotely with any level of efficiency. In addition to a lack of efficiencies, we believe remote work destroys company culture. To be a cohesive team, we need to be together. Zoom calls don’t cut it.”

The logistics industry is undergoing a substantial transformation, with innovations emerging that are specifically designed to support the hardwood lumber industry. By embracing new technologies, expanding customer service, and increasing employee retention, logistics companies can position themselves for great success in the years to come.