Compared to the pandemic years in supply chain, 2023 may seem a bit dull, or at least more normal. But make no mistake, the year was anything but.
Technological innovation and the impacts of artificial intelligence dominated headlines. Volatile global relations hastened the need for U.S. nearshoring and reshoring. A historically low unemployment rate made finding and retaining logistics talent tough. Inflation and rising interest rates affected profit margins, capital investments, and consumer spending. The threat of an economic slowdown loomed large the entire year.
So, what does this mean for the supply chain in 2024 and beyond?
The Langham Logistics leadership team sat down to discuss this question. The conversation generated strategic insights for managing the supply chain challenges and opportunities on the horizon.
Q: What will make supply chain management different in 2024 than previous years?
A: Market fears following COVID were a major factor in shipper supply chains in 2022 and 2023. The most important question companies were asking 3PLs is ‘How are you keeping us safe?’ They were looking to us for help managing the effects of economic uncertainty, global unrest, reshoring, supply chain choke points, port strikes, and more. Therefore, the past two years were more about sustained relationships and managing market forces on multiple fronts rather than dramatically improving supply chain performance.
That will change in 2024 and 2025.
The next two years will be focused on efficiency and yield. Expect pre-pandemic vulnerabilities to reemerge as priorities. That includes shippers looking for more inventory certainty through real-time transparency. Margin per unit will be a major focus as companies navigate profitability pressures due to inflation and a projected consumer spending reduction over the next 12 to 24 months.
Q: What if we look out even further? What will shippers need from logistics partners?
A: So much of the past few years has been reacting to supply chain issues and unprecedented challenges. As we look ahead to 2025 and 2026, proactive management will be key. Logistics partners must be out ahead of what customers need.
With supply chains growing increasingly complex, shippers will expand their reliance on vendor partners and 3PLs to take on more responsibility. This is especially true for pharmaceutical and life sciences companies. Look for them to outsource more raw materials management, transportation, and warehousing so they can focus exclusively on bringing new drugs to market.
Q: Are there supply chain challenges ahead that might not be getting enough attention?
A: In 2024, the U.S. will hit Peak 65, the point when 12,000 people will turn age 65 every day. By 2030, every Baby Boomer will be over the age of 65. This population group hitting retirement age means a massive reduction in experienced management and knowledge workers within the workforce. At the same time, the pressure will be on for rapid drug development.
Managing this workforce transition while increasing supply chain speed will be a critical area for 3PLs to navigate. Shippers will look to 3PLs and other partners for help.
Q: What should shippers look for in 3PLs ready to meet these new supply chain demands?
A: Of course, experience matters. About 10% of logistics companies operating today have been in this business for less than five years. In comparison, Langham Logistics has managed global supply chains for more than 25 years. We work with seven of the top 20 life sciences companies in the world, meeting the strictest regulations and demands.
Beyond a deep level of expertise which comes with time and top talent—shippers should be looking for technology integration. Leveraging emerging technologies will be a significant differentiator among 3PLs and other shipper partners in the next few years.
Many of Langham’s major technology investments center on helping shippers increase margin and efficiency. Not only are we using technology to improve our own operation, but to proactively support evolving customer needs as well.
Q: Let’s dive deeper into new supply chain technologies. What has been a game-changer?
A: Drones and other UAVs (unmanned aerial vehicles) offer one of the best use cases for investing in emerging technologies. Drones once seemed like science fiction. Yet, drone deliveries exceeded 1 million in 2023. A study commissioned by NASA anticipates as many as 500 million drone delivery flights annually by 2030.
Drones also are transforming the way we manage the supply chain in other ways today. This is especially true within our warehouses when it comes to those major forward-looking logistics themes—efficiency, yield, and velocity.
Q: How are you using drone technology in your everyday operations?
A: Langham uses drones for cycle counting, empty bin audits, pallet locations, and specific customer requests like providing inventory images. The drones conduct between 1,420 and 2,000 counts per day with incredible accuracy.
In this video, Director of Engineering & Facilities Scott Swanson and Inventory Control Supervisor Matt Weston talk about the ROI of Langham Logistics’ investment in cycle-counting drones in the warehouse in terms of labor, equipment costs, safety, and more:
Q: You mentioned shippers needing help maintaining margin. How does investing in technology support that?
A: Shippers and supply chain partners often worry about the cost of modern technology and potential disruptions. Technology is always a sound investment when operational gains offset the price. That has been true when it comes to drones within our warehouses. We anticipated the return on investment to be realized in one-and-a-half to two years. We actually achieved the full benefits in less than a year—with zero disruption to our clients.
By adding drones, we accomplished the same amount of work, more accurately, with half the staff. The drones proved 10 times more efficient than someone on a scissor lift conducing manual inventory counts. That allowed us to reallocate those FTEs to other parts of the operation without hiring additional staff.
We generated $40,000 in annual savings by renting fewer reach trucks and order pickers. Plus, drones helped us manage safety better by minimizing the need for staff in the air to conduct inventory counts.
In addition to controlling operational costs, the drones also help us to meet customer needs better. Leveraging drone technology allows us to provide real-time inventory checks, ad hoc cycle counts, and product pictures on demand for clients. What would have taken employees several hours before can now be done via drone in a matter of minutes.
Q: How will drone technology support your work in the future?
A: We have plans for drones to cover receipts on the receiving dock, conduct warehouse safety inspections, and perform temperature mapping to each individual customer’s specifications. We also have a roadmap for drones to do all counting to eliminate the need for any staffed physical cycle counts.
While we have already achieved our projected ROI, we have only tapped into a fraction of these drones’ potential to drive efficiency and velocity for shippers. And this is only one of the many innovative technologies we have deployed in our warehouses. We’re well-positioned to meet evolving supply chain demands in 2024 and beyond.
Learn More About Langham
Langham Logistics is a global transportation and warehousing company working with some of the biggest brands in the world. We offer supply chain management, domestic and international freight services, and airport logistics. Langham operates more than 1.5 million square feet of temperature-controlled warehouse space strategically located across the United States for distribution efficiency. Our team of experts manages logistics from A to Z so clients can focus on boosting their business. When it comes to unparalleled supply chain leadership and know-how, Langham delivers.