4 Things to Expect from Logistics Providers in 2024

The logistics industry, though not quite back to pre-pandemic norms, has successfully weathered much of the chaos into which the pandemic had thrown it.

2023 allowed many companies to take a breath and return to more realistic inventory levels. As consumer spending eased, companies were able to eliminate expensive stockpiles of goods, which enabled logistics companies to evaluate their operations and make adjustments if necessary. Instead of merely reacting to supply chain crises, many logistics companies took the time to plan how they would adjust to the post-pandemic world.

As a result, 2024 will be less about crisis management and more about balancing how logistics operations were done before the pandemic and incorporating lessons learned during that time.

Here are four trends to expect:

• Companies may be hesitant to invest significant money in building their own logistics operations.

While we appear to be past the worst of the interest-rate hikes, many companies are hesitant to be too aggressive in putting together growth plans for their business. What that means practically is that they will be less likely to invest long-term capital in operating their warehouses.

For the logistics industry, that means there will be an additional need for warehousing and logistics providers to fill in the gaps. After all, the goods still need to be stored somewhere, and if the companies aren’t doing it themselves, they will look to warehousing and logistics suppliers for help.

• Companies will be looking for flexible warehousing options.

The Federal Reserve has signaled it will likely reduce interest rates in the coming months, which should put the economy back on a growth trajectory. As we all understand, however, jump-starting an economy isn’t always a straight line upward. There are bound to be fits and starts, and companies will be looking for flexible warehousing solutions that allow them to expand or contract as market conditions dictate. 

• More companies will share warehouse space with other non-competing companies.

In the past, corporations have wanted to own their supply chain resources, but given the constrained economic conditions, this no longer makes sense for everyone. In the past several years, I have seen more collaboration than ever before between non-competing companies, which are starting to pool their resources to acquire warehouse space. 

Many collaborative efforts will lead to more opportunities to outsource these warehousing needs to warehousing and logistics providers. If 12 different companies are trying to send products through the same pipeline, sharing resources makes much more sense—but warehousing and logistics companies will have to be smart about how they approach this new reality.

Providing short-term, flexible contracts that don’t require significant financial outlays upfront will be the hallmark of companies that succeed in this environment.

• More automation and electrification are coming—but don’t forget the basics.

More warehousing and logistics firms will be striving to automate many of their internal processes, such as employing self-driving forklifts and automated pick-and-pack machines. Don’t forget, however, that automation will only take you so far.

Make sure your employees are focused on providing the highest levels of customer service, and keep your facilities functional at all times. In a world where the human touch seems to be increasingly an afterthought, you can stand out from your competitors by ensuring your basics are buttoned up.

The driving force behind these trends is consumers, who are telling companies they are willing to pay for faster and more efficient delivery. There are opportunities for innovative and resourceful warehousing and logistics providers to capitalize on this need to move goods more quickly than ever before.