A new report from Transport Intelligence (IT) states that Covid-19 has helped accelerate global digitization processes and therefore the adoption of technology in the logistics sector. This, because trade conflicts and other disturbances generated by the pandemic led companies to examine their vulnerability.

Thus, in times of crisis, commercial activity has been able to continue largely thanks to the ubiquity of broadband networks, mobile networks that support 4G, basic communication services accessible through the Internet, cloud services at an economic cost. and low-cost computing and communication devices.

“If this pandemic had occurred before 2010, it is likely that economic activity would have collapsed in many countries. Back then, evolving systems and communications technologies were costly, inflexible internal platforms, and relied on fixed locations for production and administration,” the report stated.

This also meant that manufacturing companies, which powered extended supply chains, were inherently fragile to any prolonged period of supply or demand disruption. However, since then the situation has progressed to become a flow of digital information, which can be controlled from almost anywhere. “Covid-19 has accelerated the impact of several trends that were to transform the way we live and work, compressing years into months. And this transformation shows no signs of stopping," the document added.

Agility and information exchange

During this period of uncertainty, the high-cost structures inherent in brick-and-mortar stores, reliable but rigid operating plans, and customer expectations for fast direct delivery exposed retailers unable to adapt and accelerated their demise. In many developed markets, the physical retail sector and many of its underlying business models were virtually destroyed. Notably, for every retail operation that fails, the associated network of service providers is also affected.

According to TI, the logistics services required for new e-commerce business models now rely on technology-driven information and agility. Likewise, modern information systems allied with advanced communications technology are the central nervous system of supply chains. It is important to mention that pure and assetless carriers have always been able to adapt to the needs of their customers, which has provided them with advantageous flexibility in this period.

In this way, the explosion of e-commerce vendors will demand that the capacity of these technology services grow rapidly. Fortunately, thanks to the general availability of cloud-based information systems, this is no longer an expensive proposition.

This transition to e-commerce and home or local store delivery is projected to be the norm in many countries from now on. As platforms like Shopify grow, allowing e-commerce businesses to get online very quickly, they will evolve to offer the support services their customers require. They are expected to be scrutinized by established delivery giants as they can become a tempting acquisition target or serious competitor.

So it makes sense for these platforms to explore the possibility of partnering with local or regional logistics service providers, to enable the broadest geographic footprint.