How would the logistics of future look as the Environment assumes larger importance and speed will be imperative to be lost?
Climate change and its consequences will have a far-reaching effect on logistics. As one of the largest producer of CO2 emissions, the industry would find itself in a precarious situation as the expectation of Governments, Society and a set of customers for ‘green’ supply chain rise and the pressure from these stakeholders mount to reduce the CO2 emissions. With the increasing environmental awareness, these stakeholders, in future, may enforce to demand climate neutral products and services. They may even demand product and service with labels certifying its CO2 output. The demand for transparent information on ecological footprints of products and services may be much more.
However, on the other hand, when it comes to the speed of deliveries, customers are only prepared to compromise so far. Often deliveries must be made as quickly as possible. As the customer’s tolerance for time delay continue to decrease due to time and performance pressures, individualization of transportation services is likely to become increasingly broad business areas for Logistics. Companies may have to potentially offer separate transport routes with varying speeds in order to create customized solutions that meet individual expectations. They will have to develop new routes, burn more fuel in order to bring in a new degree of flexibility in their operations thereby impacting the environmental adversely.
Hence, companies would find it difficult to cater to such diverse and conflicting requirements of customers and other stakeholders choosing between speed and environmental sustainability. Would the customer forego speed for environment in the future? Or would companies have to develop new business models enabled with newer technologies to be able to cater to such conflicting needs without compromising on speed as well as environmental sustainability. What would these business models and new technologies be? Answers to these imminent questions would shape future strategies of Logistics companies!
About the Author:
Mansingh Jaswal is Director & Chief Executive Officer with Genex LogiSolutions Pvt. Ltd., having a professional experience of over 15 years in Supply Chain, Logistics, Transportation and International Freight and a Strategic Management Research Scholar at Management Development Institute (MDI).
He can be reached at mj@genexlog.com or contacted at +919810404438.