6 things that are transforming Europe’s supply chain and logistics industry
By FarEye | October 13, 2022
European businesses are juggling new supply chain and logistics strategies to deliver superior customer experiences. But making customers happy and staying profitable is not easy. However, companies have an opportunity to digitalize their core supply chain and logistics processes to reduce operational expenses and deliver efficiently on customer expectations. This is an opportunity they may not want to miss. To better understand why businesses need to embark on a digital journey, let’s quickly glance through six factors that are having a significant impact on Europe’s supply chain and logistics industry.
What’s driving Europe’s supply chain and logistics industry
Fragmented transportation market, driver shortages, frequent purchases, government regulations, popularity of ‘click and collect’ and the need to mitigate risks are the key drivers that will push European business to embrace modern technologies.
Fragmented Transportation Market
A key challenge with the transportation market in Europe is that even the largest transportation companies here only cover only 10% of the transportation market making businesses heavily dependent on disparate 3PL providers. This results is creating a delivery ecosystem that’s not only fragmented but also disjointed. Hence, the transportation market in Europe suffers from poor collaboration and delivery visibility issues.
Businesses need to leverage advanced supply chain and logistics tools that can bring both a brand and 3PL provider on the same platform cost-effectively and enhance visibility of freight movement.
Shortage of Drivers
Just like the U.S., even the European trucking industry is facing a chronic driver shortage. According to European Road Freight Transport 2018, European transport firms are racing towards a driver shortage crisis of 150,000 unfilled jobs. The report highlights that in the U.K., Germany, France, Denmark, Sweden and Norway the shortage of drivers adds up to 127,500.
The U.K. has a shortage of 52,000 drivers, Germany 45,000, France 20,000 drivers, while road freight associations in Sweden, Denmark and Norway report shortages of 5,000, 2,500 and 3,000, respectively. So, doing more with less will be a key when executing logistics operations. Business will need to leverage advanced logistics and supply chain platform that improve productivity of drivers.
In Europe, people are more inclined towards buying in less quantity but more frequently. Take for instance Europe’s grocery industry. Grocery retailers in Western European countries are now investing in convenience stores as a response to changing customer behavior. It does not end there, ensuring that these stores are always stocked up is equally important. So, supply chain and logistics stakeholders need to efficiently plan fulfillment and delivery strategies to avoid out-of-stock situations and manual supply chain processes happens to be a major bottleneck in achieving this. The solution is to automate core delivery processes like, task allocation, order placement, scheduling and route planning--things an advanced logistics software can cost-effectively execute.
Evolving Government Regulations
Changing compliance is another key trend dominating the European supply chain and logistics industry. Governments across Europe are constantly introducing new legislation with regards to health, safety, and environment. For instance, Transport for London, the body that controls all the roads in Greater London, has introduced a new rating system with regards to visibility of heavy vehicles that decides if they will be allowed on the city’s usual roadways. This has had a massive impact on shippers. To adhere to regulations like this, businesses need to embrace tools that help them have greater control and visibility over delivery their fleet.
Popularity of Click and Collect
Click and collect is increasingly becoming popular with European consumers and the reason behind it is that customers do not have to stay at home to receive their deliveries. Research highlights that click and collect market will generate 10 percent of UK’s retail sales by 2025. Click and Collect also helps cross-sell products. A study by Bell and Howell highlighted that 49 percent of customers were likely to purchase an additional item when picking up their online order. To reap the most out of this opportunity, businesses need to use a platform that empowers them to improve transparency of delivery processes for both customers and delivery executives.
Rising Risk of Theft
In 2017, almost 5,000 incidents of cargo thefts were reported in the EMEA region. In one case, five Romanian men stole iPhones worth EUR 500,000 (USD 575,000) from a moving truck in Netherlands. Advanced logistics platform with machine learning capabilities can be of immense help here. A large steel manufacturer reduced chances of theft and pilferage by 57% by leveraging a powered logistics and supply chain platform.
Machine learning analyzes historical data of delivery routes and quickly alert delivery stakeholders regarding routes that are prone to theft and pilferage This proactive approach towards planning deliveries can help businesses save millions of dollars just by making deliveries more secure
To sum it up, digitizing core supply chain and logistics processes to stay relevant and ensure customer-centricity is the way forward. It’s only a matter of time European businesses will start investing more in disruptive technologies like machine learning, predictive intelligence, IoT, automation among others to build a future-ready supply chain.