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What 2022 Has In Store For Shipping And Logistics Industry?

Supply chain

The global health crisis has disrupted many industries around the world, including shipping and logistics. However, the industry was already experiencing substantial disruption prior to the pandemic, and this is not expected to slow any time soon.

As COVID-19 restrictions slowly ease in India—and the rest of the world— and businesses slowly open back up, it’s essential that organizations that operate within shipping and logistics prepare for the future of their business. By taking stock of potential opportunities and responding to important local and global trends, companies can better prepare their businesses and employees for changes taking place across the industry.

In particular, there are three key emerging and growing trends in the shipping and logistics industry that businesses must be aware of in 2022:

  1. Cross-border shipping

Recent research shows that the cross-border eCommerce logistics market is expected to grow by US$44.61 billion between 2021 and 2025 as the pandemic continues to disrupt and transform global industries. This presents several exciting opportunities for India’s shipping and logistics industry both in terms of importing stock from global brands that currently have no retail presence in India and in delivering goods ‘made in India’ items to the rest of the world.

As global fashion brands continue to embrace cross-border shipping and make deeper inroads into the Indian market, there is an ideal opportunity for shipping and logistics operators to develop strong network connections to help support the growing need for local deliveries. At the same time, growth in industries such as technology are creating more opportunities for businesses to export products and services around the globe.

  1. Increased rural expansion and regional growth in tier two and three cities

In addition to cross-border shipping, the shipping and logistics industry is also experiencing growth in regional centers. This is a result of continued network development and expansion for businesses in tier two and tier three cities, as well as ongoing rural expansion. However, this has also been driven by the increased update of mobile services across the country as the Indian population becomes increasingly mobile savvy and regions continue to develop internet networks.

Research shows that there were more than 749 million internet users across India in 2020, compared to just over 300 million in 2017. This growth trajectory is expected to continue as the number of internet users in urban and rural areas increases and is projected to reach more than 1.5 billion users by 2040.

This presents ample opportunity for growth in the shipping and logistics industry as it expands to support a growing eCommerce sector and provide better service for regional areas not currently covered by delivery services.

  1. Continued growth of hyper-local delivery

The pandemic has driven increased growth of hyper-local delivery, as the delivery model has extended significantly beyond food and grocery deliveries to include logistics, pharmacies, and other market segments. While the global health crisis has facilitated exponential growth in this area, opportunities won’t end when the immediate disruptions of the pandemic subside.

There will be continued areas for growth and further development as retailers expand their online presence, leading to subsequent growth in the shipping and logistics industries. There are two primary areas where the industry will experience potential growth:

  • Last-mile delivery: larger e-tailers continue to harness the benefits of hyper-local delivery by integrating with local stores to build a more comprehensive supply chain network as well as to facilitate last-mile delivery and better control associated costs. This network will increasingly be supported by app-based local delivery services.
  • Expanding ecosystem: in addition to larger e-commerce players integrating with local stores, organizations engaged with hyper-local delivery will continue to invest in joint ventures and partnerships with multi-carrier shipping providers to facilitate wider coverage for their delivery services.

While the pandemic continues to disrupt daily life across the country and the globe, it’s important for businesses to understand the opportunities that are being created because of this disruption. As world returns to its new normal into 2022 and beyond, companies that recognize the opportunities for growth, especially in the shipping and logistics industry, will be best placed to harness those opportunities and prepare for better business success.

While these are just a few emerging and growing trends that are set to change the industry, it’s essential for business leaders to consider the impact they will have on businesses today and how these opportunities can be harnessed for a more secure business future.

(The author is Vice-President & Country Head, Sending Technology Solutions, India & ASEAN at Pitney Bowes and the views expressed in this article are his own)

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