March 19, 2019

Logistics: the Invisible Industry

Logistics, known for being the "Invisible Industry", is the silent, immense construct that ensures that all of the things we take for granted work. After all, without shipping, storing, distributing, most of us would run out of food fast, not to mention the vast majority of the infrastructure shutting down. Every moment millions of logistics employees work, so that most of us can simply drop at the store to pick up some milk, have heating in our house, and even have electricity.

What makes a great logistics organisation great is its ability to operate behind the scenes, quietly powering the supply chains of the world, keeping it running like a well-oiled machine. There over 100,000 freight ships at sea at any given time, carrying the food, clothing, fuel and other goods that we rely on as consumers; but because these ships (and planes, and trains and trucks, etc.) are largely out of our immediate view, we, as a society often don’t give them a second thought. From our vantage point, we place an order, wait a few days, and the order magically appears on our doorstep. The only time we become interested in logistics is when an order doesn’t show up on time.

The logistics industry is (still) growing

As logistics technology becomes more innovative, supply chain providers are better able to streamline order management and fulfillment, and as a result, the industry is growing at a prolific rate. The logistics market is estimated to reach $15.5 trillion by the year 2024. Thanks to improvements in automated material handling, warehouse control systems, advanced GPS tools, and better security software, logistics organisations are finding new ways to operate more efficiently. For consumers, that translates into faster, less expensive order fulfilment.

Then again, this may sound pretty obvious. The more people there are, the more need there is for goods to be shipped and stored, right?

The impact of logistics on consumers

So how important is logistics to the consumer population? To answer that, we must first understand what logistics entails. It isn’t limited solely to transportation. In fact, logistics can include nearly every activity along the supply chain, including customer service, inventory monitoring, waste and loss reduction, order processing, and communications channels.

As consumers, we don’t stop to consider the intricate web of activity that takes place for us to do something as simple as filling our automobile with fuel. That fuel must be sourced from a refinery (often from another country) and then transported via pipeline, rail or ship to a terminal, where it is further refined. Once it is ready for distribution, it takes another journey via a fuel truck to the filling station where you ultimately purchase it to power your vehicle. By the time it reaches you, it may have journeyed halfway around the world and moved through the entire supply chain.

From purchasing groceries to automobiles to a new pair of shoes--consumers rely on each player within the supply chain to produce what they need when they need it. This complex journey is largely invisible to the consumer population, due to the efficiency of logistics providers.

The impact of consumers on logistics

Despite their general unawareness of logistics processes, consumers are making an impact on the future of the logistics industry. For example, as consumers become more aware of and concerned with the ethical sourcing of goods and the treatment of the laborers who create and transport them, they have a greater influence on logistics providers. This frees supply chain providers to solicit business from new vendors with a reputation for ethical and sustainable processes and goods.

In addition to having a greater say in the types of goods that move through the supply chain, consumers can also access information much more quickly than they have in the past, thanks to advancements in logistics technology. This creates an elevated level of competition for logistics providers to fill orders more quickly and with near-perfect accuracy since consumers can track the status of their order every step of the way.

Logistics organisations are facing the challenge of attracting new talent in an industry that is largely unseen by the general public, and yet so important to its day-to-day operations. So how do we make logistics more visible? Technology may be the answer. As the logistics industry continues to thrive, new tracking and monitoring technology will allow consumers a glimpse into the complexity of the supply chain, offering a new appreciation for the important role logistics plays in our everyday lives.

Did you enjoy the article? Take a look at our other blog posts on logistics: Four Ways Technology Will Boost Warehouse Efficiency, How Will Self-Driving Trucks Re-Route Logistics Professionals? and The Importance of Cold Chain Logistics for the Healthcare Industry.