Falling Freight Costs: A Driving Force in Inflation Reduction
One of the pivotal factors that might contribute to an easing of inflationary pressures in 2024 is the decline in shipping freight costs. A combination of excess capacity in the market and falling storage rates are expected to drive down the overall costs of transporting goods. This reduction is likely to have a ripple effect, positively impacting inflation rates, and subsequently, the overall economy.
In addition to this, there is a continuing pressure related to customs declarations for EU cross border supply chains and that data quality and robust processes are critical to managing that pressure.
Talent - Focusing on younger recruits.
While the constant shortage of HGV drivers is still a big headache, hiring for junior and middle management roles is also getting tougher in the sector. Unsurprisingly, improved pay and conditions tops the list of actions that logistics leaders say they are taking to address the talent and skills shortage. Almost half of businesses say they are trying to attract younger people and introducing apprenticeship schemes.
Tech-Powered Decision Making
The role of technology in shaping the transport and logistics industry cannot be overstated. In 2024, technological advancements are set to further revolutionise decision-making processes. AI-driven analytics, machine learning, and data-driven insights will play a pivotal role in enhancing operational efficiencies, optimizing routes, predicting demand, and ensuring better resource allocation. A recent poll showed more than half of the respondents (59%) are focussing investment in new technologies to drive efficiencies, incorporate AI and big data in supply chain decision making and scenario planning, the introduction of robotic goods to man automation and autonomous vehicles.
Returns: Will Consumers Bear even more of the Cost?
As return rates continue to climb, others will surely follow companies such as Zara and H&M by charging customers for returning goods. In an effort to offset the high costs associated with processing returns, this trend will surely gain momentum in 2024. But will this strategy backfire and send us flocking back to the high street? Policies around free returns will evolve, becoming less common or incurring even more fees.
ESG - The Pillar of Sustainable Operations
ESG considerations underpin all operations and are no longer just a side note, but a foundational element in business strategies. Our research shows that 88% of logistics leaders are currently investing in ESG projects. 62% say they are pursuing ESG projects to make a positive environmental impact, but they also see the commercial benefits in meeting the expectations and contractual requirements of customers, suppliers and service providers. Companies are expecting to invest more in eco-friendly practices, reducing their carbon footprint, enhancing social initiatives, and improving governance standards to align with evolving consumer expectations and regulatory requirements.
Conclusion
As the transport and logistics industry gears up for 2024, the landscape is transforming on multiple fronts. Mergers and acquisitions are altering market dynamics, while the reduction in freight and storage costs is set to influence inflation rates. Enhanced service quality, driven by technology, is likely to become a key competitive differentiator. Meanwhile, the question of returns and their associated costs, as well as the paramount importance of ESG considerations, will reshape the industry's future.
In this rapidly evolving environment, adaptation and innovation will be critical for businesses seeking to thrive in the ever-changing transport and logistics landscape. The year ahead holds both challenges and opportunities, prompting companies to navigate these trends strategically while addressing the evolving needs and expectations of a dynamic global market.
The biggest unknown is what impact a general election may have on our industry and the economy. However, what is certain is that our dedicated professionals will keep the country moving.
