If you thought change was coming fast last year, just wait for 2018. Here are my predictions for the year ahead:
- More mergers are on the way
The Eddie Stobart members club can boast thousands of members, so it is hardly surprising that its flotation last year caused a stir. It raised some £130 million and started spending it straight away, buying iForce, the e-commerce specialist, for £45 million and then going on to add a 50 per cent stake in Speedy Freight to its portfolio.
Elsewhere, one big deal failed to come off in 2017 – the proposed merger of Menzies Distribution and DX Group. But there are some very acquisitive players out there: Kinaxia has grown dramatically through a series of takeovers during the year, and Xpediator is expanding rapidly in the freight forwarding market.
There is still plenty of scope for further mergers among the 3PLs and the business environment in 2018 could drive faster consolidation.
- Disruptors will force further change on the retail sector
The past year has also seen big changes in the wholesale sector culminating just before Christmas with the closure of Palmer & Harvey. The market was thrown into a state of flux in January when Tesco launched a £3.7 million bid for Booker, while the Co-op is on course to take over Nisa.
Chinese online retailer Alibaba electrified the market in September, when it set out plans to invest RMB 100 billion (£11.3 billion) to build a global logistics network. And with Amazon looking to extend its activities in the grocery sector, no-one should be surprised to see further consolidation in the coming year.
- Robots will change the way you work
What has caught readers’ imaginations most last year was the rapid developments in technology – especially robotics. Readers with long memories will remember that Logistics Manager was writing about the potential for robotic warehouse systems back in 2003. But its only in the past couple of years that the potential has started to be realised.
Amazon has taken a lead with this technology and is rapidly rolling out robots in its new warehouses. Ocado has started introducing robotic systems at its new fulfilment centre at Andover. And the flood of visitors to the recent Robotics and Automation exhibition simply highlights the interest in the subject.
While robots are promising to change the way warehouses work, what is catching the public’s attention is the development of autonomous vehicles. Starship’s delivery robots are trundling around the pavements in London, while autonomous delivery vans are being trialled in Woolwich and next year DHL will take part in platooning trials on UK motorways.
These innovations are already changing they way logistics is done. They are also changing the skills that logisticians will need in the future.
- Jeremy Clarkson could explode with excitement
London’s ultra-low emission zone will come into force in April 2019, in a move designed to force older, more polluting vehicles off the road. And if the move is successful, then it is likely to be repeated in other cities across the country. At the same time there is a massive amount of work going into cleaner technologies. UPS is testing hi tech trailers that allow cyclists to tow heavier loads, and Ford is testing plug-in hybrid technology in its Transit van. Not only that, Tesla is promising an electric artic that does 0 to 60 in five seconds – Jeremy Clarkson might just explode with excitement.
- It’s squeaky bum time for Europe
2018 is a good year to escape the rat race and go and live on a desert island – it’s the only way that you will escape the interminable negotiations over a Brexit trade deal. But if you decide to hang in there, intestinal fortitude will be an essential quality. The negotiations so far have been easy compared to what is about to come. A bad deal could seriously harm your supply chain. As legendary Manchester United manager Sir Alex Ferguson said: it’s squeaky bum time.
But supply chain is all about dealing with such adversity, and I look forward to seeing innovative solutions emerging to the challenges ahead. This is the last Supply Chain Briefing of 2017 – we will be back on 9th January. In the meantime, let me wish you a Merry Christmas and a Happy New Year.