Logistics managers looking to stay ahead of the competition will need to be both informed and agile as they respond to near constant change on several fronts. Challenges relating to regulation, technology, and labour can be met, but not without awareness and strategic focus. This article will look at concerns and opportunities that keen logistics managers will stay on top of.
Regulation: the Environment, Trade, and Social Licence
Logistics managers must pay close attention to both the regulatory and social environments. This involves staying abreast of current events as well as performing due diligence on legal matters.
Environmental Regulations
The toxic train derailment in East Palestine, Ohio, is the latest reminder of just how wrong things can go when safety is compromised. The issue has sparked fresh debate in the US about how toxic a train’s cargo must be in order to trigger a higher level of safety protocol.1
Closer to home, the Port of Vancouver’s long-planned ban on diesel trucks over 12 years old has seen its implementation delayed yet again.2
When it comes to regulation, change and rumours of change are near constant. A working knowledge of this landscape should be factored into procurement and logistics planning.
Trade Policy
It’s a given that logistics managers are beholden to changes in trade agreements between nations, but they’re also wise to stay aware of prevailing trends in supply chain management.
‘Friendshoring’ is the current buzzword3 and for good reason. Today’s diplomatic dust-up could be tomorrow’s broken supply chain, to the potential chagrin of those who place all of their procurement eggs in one basket.
ESG Pressure
A recent survey finds that 64% of small and medium sized Canadian companies claim to factor environmental, social, and governance principles into supply chain management.4 With government and multi-nationals placing increased scrutiny on ESG throughout their supply chains, smaller companies will have to comply or risk being vulnerable to lost business.
Technology: Data, AI, and Transportation
If there’s anything changing more quickly than regulation, it’s technology. Understanding and harnessing these breakthroughs should be a priority for logistics managers.
Data Sharing and Infrastructure
As we profiled in a recent piece on warehouse trends, forward-looking companies are harnessing the power of warehouse management systems, portals, driver check in kiosks, and other tools to increase transparency and streamline daily operations. Control, clarity, and confidence are available to those who utilize these technologies, which are increasingly being seen as table stakes in the logistics field.
Artificial Intelligence
A recent Toronto Star article profiled several Canadian tech start-ups that aim to use artificial intelligence as a means of better predicting demand.5 Companies such as Amazon and FedEx are expressing interest, a sure sign that these start-ups are headed in the right direction.6
If the technology is applied correctly it may help avoid the type of empty-shelf scenarios that have plagued both retailers and consumers in recent years.
Automation in the Supply Chain
Driverless trucks transporting goods, drones handling last-mile delivery, and automation transforming warehouses: yesterday’s far-fetched conversations are today’s cutting edge reality and tomorrow’s commonplace methods. Logistics managers who don’t work to utilize these technologies risk losing ground to those that do.
Employee Training and Other Internal Factors
If external challenges aren’t enough, there also exists a need to look inward. Despite the aforementioned automation, a well-trained and reliable staff remains imperative to success.
In today’s tight labour market, building and maintaining a top notch team is easier said than done. Truck News reports that there are currently 27,000 truck driver vacancies in Canada.7 The fact that 32% of Canada’s truck drivers are 55 years of age or older threatens to exacerbate the problem. To address this, the Federal Government has committed $43 million in funding to train and onboard up to 2,600 new truck drivers and other industry workers.7
Just as in other industries, it’s important for logistics companies to be proactive in the recruitment, development, and retention of a strong team. Doing so should be a top priority and an ongoing effort.
Ultimately, the only thing constant in the logistics industry is change. While expertise in the aforementioned areas is important for logistics managers, the most important trait may be an appetite for constant learning and an eye toward adapting to disruption. In such a dynamic environment, this could prove to be the recipe for turning challenges into opportunities.
Cited Sources
1 Narea, Nicole. “The Ohio Derailment Is Spurring Congress to Actually Do Something about Train Safety.” Vox. Vox, March 2, 2023. https://www.vox.com/politics/2023/3/2/23622455/ohio-train-derailment-congress-rail-safety-bill.
2 Little, Simon. “Controversial Plan to Ban Older Trucks from Vancouver Port Delayed Again.” Global News. Global News, February 25, 2023. https://globalnews.ca/news/9510213/vancouver-port-truck-age-program-delayed/.
3 Kessler, Sarah. “What Is ‘Friendshoring’?” The New York Times. The New York Times, November 18, 2022. https://www.nytimes.com/2022/11/18/business/friendshoring-jargon-business.html.
4 Llp, Kpmg. “ESG Becomes a Critical Link in the Supply Chain for Canadian Companies.” Cision Canada, November 1, 2022. https://www.newswire.ca/news-releases/esg-becomes-a-critical-link-in-the-supply-chain-for-canadian-companies-869872863.html.
5 Tawil, Sherif El. “Artificial Intelligence Could Provide a Solution to Canada’s Supply Chain Troubles.” thestar.com. Toronto Star, February 28, 2023. https://www.thestar.com/business/opinion/2023/02/28/artificial-intelligence-could-provide-a-solution-to-canadas-supply-chain-troubles.html.
6 Tawil, Sherif El. “Artificial Intelligence Could Provide a Solution to Canada’s Supply Chain Troubles.” thestar.com. Toronto Star, February 28, 2023. https://www.thestar.com/business/opinion/2023/02/28/artificial-intelligence-could-provide-a-solution-to-canadas-supply-chain-troubles.html.
7 Smith, John G. “Millions in Federal Funding to Train, Onboard New Truck Drivers.” Truck News, February 21, 2023. https://www.trucknews.com/transportation/millions-in-federal-funding-to-train-onboard-new-truck-drivers/1003172831/.