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Key trends and influences for materials handling in 2021

To say 2020 was a challenging year would be a massive understatement. Gian Schiava offers some thoughts on trends that will shape the year ahead.

The economic downturn and Covid-related restrictions affected companies and employees alike. Nevertheless, we also learned that adverse situations often lead to new opportunities for businesses, large or small. For example, many restaurants professionalised their takeaway services to try and keep themselves afloat.

Many large retailers – especially in the food and fashion sectors – adapted by focusing primarily on e-commerce. E-Commerce News reported an expected turnover of 717 billion euros in Europe at the end of 2020 – an increase of 12.7 per cent compared to the situation in 2019. This growth is lower, of course, than the 14.2 per cent increase seen in the previous year, but in the light of 2020’s adverse conditions it’s an encouraging figure.

In mature e-commerce markets, like the UK and the Netherlands, this meant that companies maintained or slightly improved their position. However, in countries like Spain and the eastern part of Europe the percentage of online shoppers showed impressive growth. Furthermore, it is anticipated that business-to-business e-commerce will also grow,
due to prolonged social distancing and the expectation that working
from home will somehow continue.

If 2021 promises to be the year of cautious economic recovery and of e-commerce channel dominance, what does this mean for people working in the materials handling industry? Let’s take a close look at the annual Logistics Trend Radar, a survey conducted by DHL amongst thousands of professionals. Whilst the report also addresses long-term trends and overall supply chain concerns, we will focus on the short-term gamechangers and their impacts on materials handling:

1. Social and business

In the near future, professionals expect to develop even more ways of reaching the customer. New omnichannel retail concepts include webrooming, in which consumers research products online before buying them in-store – as opposed to showrooming, where they browse products in-store before buying online elsewhere.

Another development is no-line commerce, in which boundaries between channels are ‘eliminated’ from the perception of the customer. This blurring of channels requires deliveries, fulfilment and returns to come together through technological integration and data sharing – not just within the company itself but more especially between partners and suppliers.

The other high-impact trend is one we wrote about in a previous Eureka¹, article. It is the transformation of work in the logistics industry, due to automation, an ageing population, and the rise of the millennial workforce. We can now perhaps expand on that with lessons from last year’s crisis. Humans will need to cope with collaborative robots, flexible work systems, continuous learning and the need to gain new skills.

Companies will have to make sure they not only develop their employees but do everything possible to retain their workforce for the future. Amongst many examples of the way forward is that warehouses should pay extra attention to the ergonomics of new equipment to reduce stress and injuries. In forklift development – more than ever before – the human factor is regarded as the most influential in determining the productivity of machines.

Slightly less relevant – as it mainly concerns the fresh chain – is growth in the fulfilment and delivery of temperature-controlled goods through standard networks. We are now used to ordering groceries, meals and pharmaceuticals online, and are therefore creating new challenges for suppliers with regard to picking, packing and transporting shipments whilst controlling temperature. In view of this growth, the industry must further develop special processes and cold-chain packaging.

2. Technology

In this area, the two most influential factors are boosting the importance of data-driven logistics. First, there is the Internet of Things, which provides the opportunity to connect virtually anything to anything. Machines and objects can send, receive, process and store information, and even become self-steering entities. They provide new insights to logistics providers and enable them to manage activities better. Insights are also enhanced through Big Data analytics. The amounts of data gathered from various supply chain sources are huge and can be used to improve operations.

Robotics and automation are likely to see a real boom, and that is not just because of higher productivity or better fulfilment performance. As mentioned already, it is vital to retain employees. Improved health and safety, and reduction of repetitive or physically strenuous tasks, therefore become major factors in decisions on new equipment. As self-driving vehicles (like AGVs²) take over the less pleasant tasks, staff can be assigned to more complex and rewarding work.

When it comes to forklift and warehouse trucks, we expect that the adoption rate of Li-ion³ battery models will grow. Demands for higher output in order picking, in particular, can be met through lowering downtime with these fast-charging and zero-maintenance power sources.

Economic recovery in 2021 may still be fragile, and some companies will not survive the damages incurred in 2020. One thing we can be sure of is that the logistics and materials handling sectors will be amongst the first to benefit when markets start to rebound. Above all, what we can learn from last year is that well-organised logistics are now vital to the survival of our businesses.

1. https://eurekapub.eu/materials-handling/2017/11/01/changing-face-working-warehouse
2. https://www.rocla-agv.com/
3. https://www.catlifttruck.com/cat-forklift-trucks-li-ion-batteries