Trends in the Logistics Industry Beyond 2020 and the COVID-19 Pandemic

The pandemic has disrupted the shipping and logistics industry in unprecedented ways. However, the industry is still set to continue with its growth trajectory in 2021 and beyond. According to a Research & Markets report, the logistics market will expand to $3.22 trillion, which is a 17.6% year-on-year growth compared to the 2020 market value of $2.73 trillion.

With this growth comes a variety of changes, which are largely inevitable as the industry copes with the challenges brought about by the pandemic and the recession that came in its wake. StartUs Insights, a data science specialist, lays out trends that characterize the innovations in the logistics industry for 2020. The most notable of which are highlighted below.

Light, humidity, and temperature monitoring systems

The Internet of things (IoT), which is the web connectivity and interconnection of various physical devices, has been around for some time. However, the shipping and logistics sector has yet to take full advantage of it. Things are set to change in 2020, as companies integrate IoT into their operations to enable better visibility over the processes, real-time updates about the goods in transit, accurate condition tracking, and more efficient fleet management.

Small IoT devices can be attached to packages or product parcels to enable smart monitoring. These devices contain miniaturized sensors to keep track of light exposure or humidity levels. They can also be used as portable temperature monitoring systems to secure products that should avoid exposure to harsh temperatures. 

Some pharmaceutical items, for example, become damaged when kept in warm areas for extended periods. Having tiny sensors in the shipped items to transmit real-time data is highly useful to maintain the quality of products and minimize the cases of damaged deliveries.

Advanced automation and robots

Automation is not new in the shipping and logistics industry. The year ahead, however, will see more sophisticated forms of automation that harness new technologies including IoT, artificial intelligence, robots, and autonomous vehicles.

Some countries especially in Asia have used robots and drones to hasten supply chain processes and ensure safety. Policies for physical distancing and reduced personal interactions are likely to remain in place after 2020. Some areas of logistics, warehousing, in particular, will have to continue relying on automated systems in response to the limited labor supply and the threat of contracting or spreading the virus.

Robots in logistics are not limited to functional hardware. This can also mean software robots, which are useful in performing repetitive mundane tasks involving data collection, sorting, and presentation. They can be programmed to keep track of crucial data in real-time and send triggers to initiate certain actions or generate reports.

Artificial intelligence  

AI is another concept that is not new in the logistics industry. However, in many cases, logistics companies that claim to employ AI in their operations do not actually use real artificial intelligence. Many of them were only created following an “if this, then that” logic. They can automate processes, but they do not have the same level of autonomy that is possible with genuine artificial intelligence.

Real artificial intelligence in the logistics industry is used mostly in forecasting to help managers in planning supply chain processes. Additionally, AI facilitates the optimization of processes to achieve more efficient operations and reduce costs. Artificial intelligence is also used in autonomous vehicles to make driverless driving in autonomous vehicles possible.

A joint study by IBM and DHL paints an optimistic picture for the adoption of AI in the logistics industry. “Unlike past waves of hype and disillusionment, today’s current technology, business, and societal conditions have never been more favorable to widespread use and adoption of AI,” the study writes. There will be challenges along the way, but it is unlikely for them to pose serious difficulties.


Blockchain, widely associated with bitcoin, also finds non-cryptocurrency applications in the logistics industry. Through smart contracts, logistics transactions become faster and more efficient. 

Several companies already make use of blockchain technology for their shipping and logistics operations. One of which is the US-based startup Steamchain, which provides a blockchain-based platform designed to simplify the process of B2B payments and address fraud issues. Another excellent example is ShipCain, which uses blockchain tech to enable freight tracking at every step of the shipping journey.

A whitepaper by logistics firm TMW affirms the usefulness of blockchain technology in the transportation and logistics sector. “TMW Systems believes Blockchain technology can have a significant, positive impact on modern supply chain processes, and particularly in the transportation category. Its abilities are virtually limitless,” the paper writes.

Elastic logistics

American Group describes elastic logistics as a component of lean practices intended to streamline logistical processes while raising value for customers. It seeks to reduce waste, bolster customer satisfaction, contain costs, and promote further improvement by being flexible in expanding or reducing capabilities in response to changing demands.

After the extreme conditions the logistics industry went through with the pandemic-recession combo, it only makes sense for companies to learn how to be more flexible and versatile to survive. The new normal calls for significant changes to become more agile in responding to challenges and opportunities. Refusing to adapt is utter inexpediency.

Services such as on-demand warehousing like what the UAE-based startup Shorages offers as well as the on-demand delivery vehicle services of Indian company GlassWing, help businesses in rapidly upscaling or downscaling their shipping and transportation operations based on economic conditions.

Cloud-based software-as-a-service (SaaS) solutions are also becoming more attractive to logistics firms, as they provide pay-per-use business models that are more cost-effective for businesses as opposed to conventional commercial software use arrangements. SaaS platforms also provide the advantages of minimal tech knowledge requirements, near-zero configuration and maintenance, scalability, and universal accessibility.

The Bottomline: Efficiency and Adaptability

As economies worldwide attempt to jumpstart recoveries, the trends in the logistics industry focus on becoming more efficient and flexible to adjust to drastic changes instead of going against the grain. This entails the smart use of new technologies and business data to minimize costs and expenses, maximize profits, and make the most of the new opportunities and transformations in the pandemic-affected markets.