- Digitization of logistics and compliance with sustainability policies will shape the future of logistics in African markets.
- Digitalization involves the development of digital platforms that match supply to demand, whether it be courier apps that deliver groceries or platforms that coordinate freight delivery.
- Sustainability significantly overlaps with compliance and regulatory requirements. This means stricter regulations on emissions from logistics vehicles, monitoring of cargo ship pollution, and other issues.
The COVID-19 pandemic caused massive damage to global supply chains, with challenges including route congestion and blockages, a global shortage of key logistics components including shipping containers, lack of space in warehouses, a spike in transportation costs, and substantially increased demand for goods around the world, post-lockdown.
Supply chain stability is also under question due to increased tensions as the Russian-Ukraine war drags on.
According to The Africa Logistics, measures to heal and strengthen ailing chains include digitizing parts of the supply chain, increasing manufacturing capacity in low-cost markets, reducing reliance on single-source suppliers, improving supply chain infrastructure through public and private funding, integrating sustainable practices into supply chain management and carefully monitoring changes in government policy across multiple jurisdictions.
While the Logistics market in Africa may be drastically weakened after the global pandemic, many effective treatments for their repair and strengthening are already underway. Thorny challenges reveal immense opportunities.
The world is once more looking at Africa as a potential growth market, so we need to be on top of our game.
Digitization of logistics and compliance with sustainability policies will shape the future of logistics in African markets. These trends will continue to drive innovation in the logistics sector as logistics companies find ways to cut out intermediaries, remove burdensome operational processes, and optimize supply chains.
Digitization of logistics
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 efficiency.
According to an article by The Africa Report published on October 9, 2019, innovation lies in the development of digital platforms that match supply to demand, whether it be courier apps that deliver groceries or platforms that coordinate freight delivery.
Artificial Intelligence (AI)
The Africa Logistics in an article dated February 22, 2022, said companies are increasingly combining data-driven solutions with artificial intelligence (AI) to identify potential risks, bottlenecks, and underperformance in their supply chains.
Artificial intelligence is used for predicting and route planning. AI also plays a crucial role in managing warehouses by predicting how supplies rotate.
There will be high-profile seasonal variations and events, which will lead to falls and spikes. Logistics companies will have to be more ‘elastic’ to cope with these falls and spikes. Elastic logistics means using a transportation management system (TMS). Together with TMS, AI advancements give early warnings to forecast demand, costs, and risks according to Linchpin SEO dated January 13, 2022.
According to The Africa Report growing internet penetration across the continent is increasing market connectivity by putting more customers online and allowing businesses to use cloud services.
Global Trade Magazine in an article published June 29, 2022, adds that cloud technologies are significant in the logistics market because they enable logistics companies to operate remotely across their broad logistics networks.
Continuing to adopt cloud-based technologies and integrating them into existing business models will assist in the further evolution of logistics markets.
Internet of Things (IoT)
The Internet of Things (IoT) is now playing an important role in supply chain shock-proofing against future disruption according to The Africa Logistics.
Linchpin SEO said IoT connects nearly everything in logistics together hence driving value within the supply chain. IoT devices provide information to logistics companies, and they will use the data to predict crucial maintenance and track shipments in live time. The same technology will also help customers to confirm when their parcel left the warehouse and when it will be delivered. This will help in theft reduction.
According to DP World, emergent IoT capabilities are enabling closer tracking of parcels in transit, which is useful for consolidated freight and smaller, more urgent shipments that are increasingly defining the on-demand economy.
Besides providing data to companies, Linchpin SEO adds that the technology also helps companies in the food industry know what atmospheric conditions are present and determine whether their goods will arrive fresh and in perfect shape.
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. Blockchain is a distributed, encrypted computer filing system designed to allow real-time, free-from-tamper records. In addition to bringing transparency to the entire logistics process, blockchain also makes it easy to use smart contracts when automating commercial processes.
Linchpin SEO in an article dated January 13, 2022, said blockchain’s system enables companies to trace and track a product from when it leaves the factory until it reaches the customer. The system records all the relevant supply chain information in a database that executes smart contracts after certain conditions are met. An example of these conditions includes confirmation of a successful delivery from the driver. Together with IoT, blockchain will enable smarter logistics in Africa.
Finally, sustainability will be a key issue for supply chains and global logistics in the near future. According to an article by The Africa Logistics published February 22, 2022, COVID-19 impacts have led to a heightened focus on sustainability, with more attention being given to the environment, social, and governance (ESG) issues in trade transactions, with such standards now demanded by customers and investors.
ESG demands and standards (such as the UN Sustainable Development Goals) and the challenges of climate change increase over time, which means that manufacturers will move their supply chains away from locations where the implementation of higher standards is delayed. Opportunities in supply chain forward-planning and collaboration also exist between different industries.
Linchpin SEO in an article dated January 13, 2022, said the drive to have a sustainable environment is integral to future transport developments like vehicle pollution problems. There are areas where the introduction of Clean Air Zones (CAZs) and Ultra Low Emission Zones (ULEZ) have been initiated.
Global Trade Magazine in an article published June 29, 2022, highlighted that many global manufacturers are including sustainability in their business plans. Sustainability also significantly overlaps with compliance and regulatory requirements. This means stricter regulations on emissions from logistics vehicles, monitoring of cargo ship pollution, and other issues.
To achieve sustainability, logistics companies will also channel their energies into last-mile efficiencies.