Stratford, CT -- With eCommerce volume skyrocketing to 40% to 60% in just the last six months, logistics professionals have had to make vast changes in getting products from point A to point B amidst the pandemic. So, is this the new normal? According to Thomas Goldsby, the Haslam Chair of Logistics at the University of Tennessee, the industry hasn’t quite gotten there yet.

“I think we’ll only be in the “new normal” once we figure things out,” he said. “Here we are six months in, and we haven’t figured much out.”

In a virtual panel discussion on August 20 with PARCEL Forum, the leading educational conference for logistics professionals, M Dave Malenfant, Director of Outreach & Partnerships for the Center for Supply Chain Innovation at Texas Christian University, Benoit Montreuil, Professor & Coca-Cola Material Handling & Distribution Chair at Georgia Institute of Technology, and Thomas Goldsby, sat down with Joel Dunkel, President of EventEvolution, producers of PARCEL Forum, to delve into what the logistics industry will look like after COVID-19.

eCommerce Is Here to Stay, So You Will Need Agility

Throughout the pandemic, eCommerce became an essential way of life, and the growth of online sales will only become bigger and bigger. This trend is challenging the logistics industry to restructure the supply chain in order to handle distribution, to separate direct-to-consumer from direct to-retail operations, and to approach frontloading inventory. “Most distribution centers are not geared to do eCommerce, but we have to do something pretty darn quick. Otherwise, the industry will be caught,” says Mr. Malenfant.

Being agile or resilient is more important than ever. The reality is that most companies, other than a few large organizations, have simply been responding to the global crisis in order to survive. But what few have done is to think about readiness—to be ahead of the game.

“Thinking about the new normal is understanding that we will never again be in the position to assume life is in a steady state that will not change. We will always need to be conscious of the fact that we will have to be ready for future disruptions,” says Professor Montreuil.

Automation Is the “New Normal”

Companies that will be successful after the pandemic are those that are agile by automating the process with the use of robotics and artificial intelligence (AI), digitizing the entire supply chain, and the ability to perform true predictive analysis.

“If there’s an upside to what’s happening in the logistics environment, we recognize that warehousing, distribution, and logistics is way behind in automation. I believe what this has done is raise the level of urgency to start doing automation, whether it’s robotics in the warehouse or whether it’s using artificial intelligence and machine learning. I think that’s what the new normal is going to be. We’re going to see much more automation in modular distribution and a new definition of what the last mile or last quarter mile will be,” says Mr. Malenfant

At Georgia Tech, they call this growing trend “vector-free logistics,” whereby avoiding the people, equipment, or products propagating the pandemic while at the same time not being burdened by inefficiency, rigidity, and unsustainability as a result. This concept includes touchless operations and digitalization, robotization and automation, and autonomous transport. “This will completely change the way logistics, transport, and supply chains are going to be run,” says Professor Montreuil.

“Robotics has been around for a very long time, but the business proposition just hasn’t been there,” says Professor Goldsby. “Now, I think there’s going to be a much more ready case for that. Then, you look at things like robotics as a service, that can offer much greater flexibility, the ability to flex up and flex down. Once you have decided to embrace robotics, doing so on a contingent basis that can accommodate sharp increases as well as presumably some decline, I think that affords a lot of flexibility and freedom we haven’t seen before.”

Brick and Mortar Will Become Forward Distribution Centers

While the idea of hyperconnected city logistics has existed for several years—a concept that harmonizes omnichannel fulfillment, eCommerce, and brick-and-mortar retail for smarter, more efficient delivery of goods—there hasn’t been a lot of traction to advance these technology sets at scale. However, there is already a shift in focus from the “last mile” to the “last quarter mile,” according to Malenfant.” During the pandemic, it has been easier to achieve fast delivery in the final quarter mile because urban centers are not congested. However, when the economy opens again, delivering in the last quarter mile may well cripple the delivery network as it sustains this increased growth in eCommerce.

“I think we’re going to see a hybrid, where brick-and-mortar will become forward distribution centers,” says Mr. Malenfant, “because some of the smaller players cannot afford to totally restructure their distribution centers for eCommerce.” In order for the logistics network to work efficiently, small companies as well as large will have to place product closer and closer to the consumer, building out a network of micro-fulfillment centers that crisscross across cities and large territories, allowing for very fast movement of items. That creates opportunities for third-party logistics providers who can consolidate and deliver products from many vendors on a more economical scale.

Professor Montreuil noted, “The game is changing. Each company must be proactive and ask itself, ‘How can we be part of the new normal?’”

Supporting Facts & Additional Talking Points

• eCommerce sales have grown faster in the past 3 months than in the last 15 years.
• Robotics companies are seeing triple-digit growth in revenue due to limited warehousing output during the pandemic.
• Returns are an afterthought for many companies; yet, they can cost twice the amount of forward delivery costs.
• There is a shift from thinking about inventory to availability. The difference is that availability can come from anywhere in the logistics network, including forward-stocking locations.
• The rising concept of showcasing products, when a customer is close to purchasing a product online allows them to visit a location with pre-positioned items that they can touch, feel, and try on before shipping the product, is where eCommerce and brick and mortar truly act in concert with each other. Value-added activities, like installation services, to this model is how companies can bring back profitability to the process.
• Over the last six months, agility has gone from “nice to have” to a necessity. Agility is not just about supply chain reconfiguration, working with new and different suppliers, building new capital expenditures into your manufacturing facilities, but it’s also about organizational agility, like shorting your planning cycles.
• Companies will not be able to be agile or resilient without digitizing the entire supply chain, from the supplier’s supplier to the customer’s customer.

About PARCEL Forum Interact

PARCEL Forum Interact, the virtual educational arm of PARCEL Forum, has reengineered the learning experience incorporating peer-to-peer engagement, live presenter interaction and the ability to deliver content in real time. You’ll talk with industry experts, share your challenges, ask questions, get guidance and network with peers to solve today’s challenges.

About EventEvolution Management

Since 2001, EventEvolution Management Inc. has been living by the mantra of positioning the right company, in front of the right attendee, the right way! This philosophy coupled with its creative approach to building events has allowed EventEvolution to build a free-thinking, fast-moving company that is not bound by traditional trade show methodologies. Over the past 19 years, we’ve developed market-focused events that strive to deliver high educational value, while allowing buyers and sellers the ability to interact in creative and cost-effective environments that are conducive to doing business.