So what should be on your radar? Here are four trends that are shaping logistics and transport this year.

1. Sustainability

Sustainability has been shaping the industry for a while now, particularly in areas of supply chain and transport in response to consumer sentiments on climate change and government initiatives. Sustainability as a trend for 2022 though looks to be two-fold; environmental strategies and targets will still be a priority, but perhaps even more so now will be operational sustainability. 

Of course, with the publication of the UK government’s Net Zero Strategy towards the end of last year, environmental sustainability will now be a necessity as well as a strategy going forward. The government has outlined policies and proposals for decarbonising all sectors of the UK economy in order to meet their target of net zero by 2050. In addition, the introduction of a new plastic packaging tax from April will require all plastic packaging manufactured in or imported into the UK, which contains less than 30% recycled plastic, to be taxed.

In terms of operational sustainability, we should be looking to invest in more robust supply chains in order to counteract the ongoing impacts of the Covid-19 pandemic. The concoction of work-from-home advice, illness and isolation periods have led to staff shortages across the sector. Not only has this had massive impacts from an operational perspective, with certain sites and warehouses running at reduced capacities of up to 40%+, it is also incredibly costly in terms of maintaining an absent workforce whilst simultaneously investing in a replacement workforce.

As such the need for a sustainable business model that can service customers consistently is more important than ever – 2022 will be all about finding sustainable ways to manage a changeable and unpredictable horizon. 

2. Collaboration

Although not without its challenges, we are starting to see many more collaborative approaches as a response to a general lack of capacity. It’s predicted we’ll see more collaboration across the whole sector as a way to plug the gaps when it comes to limited resources, availability and efficiency. Collaboration can open the door to minimising costs, filling empty legs, securing warehouse support, sourcing drivers and fulfilling customer contracts.

Collaboration will be about optimising resources in response to challenges such as fast-changing consumer trends, talent shortages, and operational inefficiencies. Operating collaboratively enables businesses and processes to be much more adaptable and resourceful, however it will require the support of another 2022 trend – digitalisation. 

Digitalisation provides the means to the end when it comes to collaboration. Enhanced digital processes and technology will be able to provide the access to, and visibility of, relevant resources and assets, indicating where the opportunities are for successful collaboration. 

3. Recruitment and talent

In the wake of the widely publicised HGV driver shortages, in both the UK and internationally, we will likely see a recruitment drive and focus on talent for 2022. Although driver recruitment will remain a priority, we are likely to see this trend permeate the industry as a whole.

Although the driver shortages gained widespread media coverage, the UK Warehousing Association has also expressed concerns over the increased vacancies for warehouse workers, including fork-lift truck drivers and goods packers. Although responses to the shortages, such as increased pay, have attracted workers to critical operational roles, they have not provided a long-term, sustainable solution to the problem. 

This year will likely see more attention and investment going into securing talent in order to avoid or mitigate a repeat of the challenges faced in 2021. Traditional methods of logistics recruitment may also be overtaken with more creative and digital ways of promoting long-term careers within the industry, connecting talent to not only existing jobs, but future jobs that will require entirely new skill sets. Now is the time to start looking to the future and expanding and nurturing talent pools in order to fulfil the essential roles that the industry will require.

4. Digitalisation

Digitalisation is all about using technology to improve operational efficiencies. As such it supports every other trend in this list which is why it will be fundamental to business strategy for 2022. While many businesses and organisations will have been developing more digital-focused strategies for years, in light of the effects of the pandemic digital will be more integral to operations than ever.

Digital will help to drive efficiency by providing operational visibility and insights, capturing the kind of information required to help make better business decisions. A huge focus on data will get businesses closer to solutions for the likes of: driving down cost per mile, improving warehouse output efficiency, and improving picking accuracy.

Automation is another digital tool that is likely to be utilised, specifically in response to the workforce shortages we have seen. Automation in warehouses for example can help to fill vital labour gaps in relation to picking, packing and fulfilment, and it would not be a surprise if more businesses begin to adopt more automated processes as a result.

Essentially digitalisation boils down to adapting to and acquiring the technology that will drive operational and commercial efficiency across the board, and it will be a huge asset to any 2022 strategy.

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Finding stability through adaptability

What’s clear is that these trends we’re seeing have been heavily influenced by two years of uncertainty, and what businesses are desperately craving now is some sort of stability. This uncertainty will not just disappear though; the aftermath of the pandemic and ever-evolving consumer demands have made adaptability essential. But it is in this ability to be adaptive, efficient and proactive that will provide the sense of stability that we’re aiming for and prepare us for the road ahead – in 2022 and beyond.

The cause of HGV driver shortages has been widely discussed, including by us, with a number of factors impacting the retention and attraction of new drivers to the profession. But what about the effect of the shortages, and the number of other supply chain shifts that are shaking up our industry? 

The announcement that EV CL Chill went into administration at the end of September is a stark sign of the times, and demonstrative that ongoing issues are having significant impacts in real-time and on big players in the industry. Despite having achieved a cash-generative year for 2020, EV CL Chill still struggled with a loss of key customers and acute driver shortages. In addition, cases of large supermarket retailers struggling to secure haulage for seasonal produce, warnings of toy shortages, and general availability across the board are all concerning as we head into the eye of the peak trading storm. 

Although warnings of shortages and empty shelves have been circulating for months, demand doesn’t seem to be waning – our customers still want to provide the goods, and end-consumers still want to buy. The need to deliver come Christmas is still very much a priority.

Supply chain struggles

So exactly what is causing struggles within the supply chain? Based on our experience, here are the most common areas of concern in the industry currently:

• Driver shortages and lack of haulage

The lack of HGV drivers has permeated the news for months now, and for good reason. This is still a huge area of contention and something that is having an impact across the supply chain. The domino effect of these shortages is that our customers cannot secure haulage to fill their shelves on time, and international imports are having to be diverted away from the UK due to a backlog of containers that can’t be moved quickly enough. 

Essentially delayed deliveries, empty shelves and petrol shortages are all results of a significant lack of skilled drivers to get products directly to the end-consumer. With the onset of the peak trading season and an increase in volume of goods to be moved, our driver shortages will be an ongoing challenge. 

• Inflated prices

We are seeing inflated prices across areas of the supply chain that are, quite simply, not sustainable long-term. The cost to transport one container from East Asia to Europe is now 10 times higher compared to its pre-pandemic cost – a result of global supply chain issues exacerbated hugely by Covid-19.

Similarly, due to demand, HGV drivers have seen some staggering pay increases that some argue either aren’t sustainable, or still not attractive enough to encourage drivers to join or stay in the profession. The result is a strategy for the short-term that could end up alienating smaller firms that can’t compete with such costs, and consumers who simply don’t want to pay for it. 

• Seasonal demand

An increase in consumer demand for Christmas 2021 is putting a lot of pressure on an already strained supply chain – unsurprisingly. Our retailers are desperate for haulage that can guarantee seasonal stock is on the shelves (with particular pressures for food retailers and grocers who require chilled haulage for seasonal produce) in time for consumers craving a ‘normal’ Christmas following last year’s last minute lockdown fiasco. 

Although peak trading is always challenging, the addition of driver shortages, inflated prices, and increasing consumer expectations have come together to create a perfect storm for the upcoming period. The question now is, can we mitigate these factors successfully enough to see us through 2021?

Supply chain solutions

We are seeing a number of trends across the industry that have been introduced to cope with peak trading demand – here’s what’s shaping the 2021 peak period:

• Price hikes

As mentioned, inflated prices within the supply chain are not sustainable and therefore price hikes are already being predicted to hit consumers in order to cover increasing supply chain costs. It has been reported that UK supermarket prices could rise by as much as 5% during the peak trading period.

While demand is high and availability uncertain, there’s potential that consumers will be willing to pay for these price hikes for the time being, in order to secure products for the seasonal period. But what about for the long-term, and how far will price hikes need to go to cover costs?

• Certainty over selection

While peak trading usually drives retailers to expand product lines and increase stock volumes, 2021 may see a shift in focus to product certainty over selection. With delayed and fragmented deliveries making it difficult for retailers to match customer expectations across their business, a commitment to delivering less, but with more certainty may be the way through the peak period. 

Retailers are already adjusting their approach to peak brand messaging in order to manage expectations, and those that have control over their own supply chain are likely to benefit from being able to promote its reliability. 

• Temporary visas

The government announced its plans to provide temporary visas to 5000 HGV drivers and 5500 poultry workers for three months in an attempt to provide short-term relief for the haulage industry. This scheme is to run up until Christmas Eve in a clear attempt to see the UK through the seasonal period. But with a shortage of 100,000 HGV drivers, will this be enough? Not to mention the possibility that this temporary scheme may not even be all that appealing to overseas workers? 

• Prolonging the peak trading period

No toys or turkeys – these are the warnings that are resulting in consumers being advised to shop early if they want to guarantee their Christmas goods. 48% of consumers have started Christmas shopping earlier as a result. 

Starting Christmas shopping earlier may help to manage expectations and spread demand, particularly when paired with clever brand messaging that promotes current availability over future uncertainty. But with the supply chain already under strain, does this also inadvertently put further pressure on it by prolonging the peak trading period?

The shape of things to come

The reactions we’re seeing to current supply chain issues are short-term attempts to survive the 2021 peak trading period, managing expectations and meeting demand as best they can. But we question how successful and sustainable they can really be? Are we instead on the brink of a fundamental shift in commercial approach, in an effort to deal with a shifting supply chain and ever-increasing consumer demands? 

What happens in 2022 – when we are still feeling the effects of driver shortages, global supply chain issues, Brexit, and changed consumer habits?  Is the reaction we’re seeing to peak trading highlighting our need for a more sustainable supply chain and ultimately signalling the shape of things to come?

We’d love to know your thoughts – join the conversation over on our social media pages.