THE FUTURE OF TRADE IN 5 TRENDS

Recent trends in world trade highlight this shift, emphasising the need for retailers at scale to comprehensively retool their supply chains solutions. For logistics at large, this means significant changes are on the way – driven by new technologies and concepts.

This is an industry that already is at the leading edge of innovation. The McKinsey Global Institute estimates that the transportation and warehousing industry already has the third-highest automation potential of any sector. According to PWC, there is “no other industry where so many industry experts ascribe a higher importance to data and analytics in the next five years than transportation and logistics – 90% … compared to an average of 83%.”

Here are five core technologies and trends that will shape the logistics and trade trends in the 2020s:

1. Hyper personalisation

E-commerce is driving a fundamental shift in how individuals consume and their expectations for when goods arrive. As a result, logistics operations can’t continue to focus on delivering 20 perfectly wrapped pallets inside a 40-foot container and making sure they land on schedule at large retailers. Instead, consumer demand now expects these goods to be delivered directly to their doorstep, at incredibly low freight rates and incredibly high speed. What was once a waybill for one container to one location now has to cover thousands of individual parcels to thousands of locations, as well as returned goods, all of which require advanced retail logistics strategies to manage goods efficiently whilst aligning with the future international trade trends.

During the next decade, when consumers step into stores, they will demand increasingly customised, personalised offerings. For retailers and wholesalers, this means tighter lead times, more turns and much more sophistication in getting products from A to B. This means incredible control and visibility from the Free Board shipping point to the Port of Discharge – visibility that is already leaning heavily on Internet of Things capabilities.

2. New cargo technologies

Self-driving trucks, drones buzzing through the skies to deliver the latest e-commerce order, and big truckloads of freight zipping through vacuum tubes at close to the speed of flight may still feel like science fiction to some, but they are workable new technologies that are set to transform global supply technologies which – 20 years from now - will seem indispensable.

One of the biggest technology trends in trade right now is arguably autonomous transport, which is transforming both long-distance and last-mile deliveries. Some of the technology industry’s biggest names and hottest startups are investing heavily in the space. Google is not only heavily investing in its self-driving car subsidiary, Waymo, but is also developing autonomous lockers for secure, direct delivery to customers. Tesla has pledged to produce semi-trucks capable of operating autonomously in convoy formations. Meanwhile, a surge of startups, particularly in China, is focusing on autonomous last-mile delivery. These innovations will reshape contract logistics, making it more efficient and responsive to consumer demand. PWC estimates that $150 million of venture capital has been invested in early-stage digital logistics startups since 2011.

Completely new forms of transport are also emerging, like the high-speed Hyperloop system and its logistics incarnation Cargospeed, which was created through a partnership between DP World and Virgin Hyperloop One. This next generation of technology logistics provides hyperloop-enabled cargo systems for fast, sustainable and efficient delivery of palletised cargo, helping to streamline the future of international trade.

Sustainably powered through solar energy, pallets can move to central staging areas to be broken down for last-mile drone delivery, or directly to retailers and wholesalers for the increasingly customised future of demand.

3. Increased automation

Warehouses and ports and terminals, generally constrained in space, will face significantly higher demands very shortly. The need to process and transfer exponentially more from the same footprint demands a rapid transition to automation.

For warehouses, McKinsey estimates that almost every task – from how pallets are constructed and deconstructed to conveying freight through a warehouse and across the loading dock – will be automated. As the future of trade unfolds, automation is expected to play a pivotal role in transforming warehouse operations, driving efficiency and reducing human error. Something as seemingly simple as building a pallet requires a high degree of intelligence; specific patterns for specific goods become increasingly complex the more variance there is to be packed. And the stakes are high – an incorrectly packed pallet can come apart, damaging goods worth tens of thousands of dollars and creating a serious hazard for those handling freight on arrival. Embracing automation and advanced technologies will be key to ensuring that the future of trade remains efficient, secure, and cost-effective

Just as skyscrapers and elevators made it possible for city planners to get significantly more occupancy out of each square kilometre of land – so can new technologies help logistics providers and port operators to get significantly more out of each square meter of the critical operational area.

Take BOXBAY, an innovative concept which is set to bring a new level of speed and efficiency to port-level logistics. Similar to elevators in a skyscraper, the system is built around a new and intelligent High Bay Storage (HBS) - a rack structure that offers unique advantages, because containers are stored up to eleven stories high, delivering the capacity of a conventional terminal in a third of the surface area.

Fully automated, it has direct access to each container, eliminating unpaid and unproductive reshuffling. It also features significant gains in handling speed, energy efficiency, safety and a major reduction in operating costs to successfully adapt to the future of trade.

4. Efficient marketplaces

Another key factor driving recent trends in international trade and the movement of goods is the construction of markets around major logistics hubs. The Traders Market project by DP World is a leading example of this approach. Spanning about 800,000 square meters – with construction beginning this quarter – it’s the first smart Freezone marketplace in the Middle East for retail and wholesale industries and aims to serve the wider region with a population base of over two billion.

The market will allow traders to benefit from lower supply chain costs and greater efficiency by using the world-class multi-modal infrastructure available in Jebel Ali and Dubai. International traders will be able to procure bulk products in Dubai at wholesale prices with the shortest delivery times and will be able to service demand more efficiently revolutionising the future of global trading.

5. Logistics gets a digital makeover

The industry at large is getting in on the broader trend of digital transformation, by using new platforms and technologies that significantly enhance supply chain visibility and – therefore – efficiency. Recent trends in world trade, such as emerging IoT capabilities, are enabling closer tracking of parcels in transit, which is especially useful for consolidated freight and smaller, more urgent shipments that are increasingly defining the on-demand economy. Then there are technologies like blockchain, which promise to help run robust transaction ledgers that can be used for everything from tracking packages to recording business transactions and facilitating bank transfers.

While the benefits of new technologies seem obvious, they are impacting the skillset required of industry employees. According to trade industry predictions, this shift provides opportunities for employees to upskill through digital training.

IoT and blockchain are, of course, not specific to logistics – but reflect broader technology opportunities that stand to significantly benefit the industry and become the future of international trade in the next ten years. For OEM suppliers, factories, distributors and freight partners in between, these technologies can integrate incredibly complex systems into a single pane of glass for unprecedented visibility and control. At companies like DP World, many of those benefits are already being realised today.

“The future is exciting – and for more reasons than just getting your e-commerce order sooner,” says [DP World Spokesperson.] “Smarter trade drives global economic growth and social progress. It helps nations grow, supports businesses, creates jobs and raises living standards.”