January 2019 | Commentary | Logistics Management

January 31, 2019 | By Jeff Lau

Some of the most relevant topics in today's headlines—technology, commerce, international relations, the legal landscape, and even immigration policy—will impact supply chains over the next 12 months and beyond.

The key for supply chain and logistics professionals is to contextualize these issues and think strategically about how they will play out. Here are a few key trends and topics that you can expect to hear and see more of in 2019.

Capacity and pricing. While much-discussed driver shortages and consolidation between transportation providers have impacted capacity and pricing, these pressures will ease somewhat in 2019. Rising freight costs are likely to plateau, providing an opportunity to refine pricing.

Logistics professionals are also getting better at addressing capacity constraints. The best are not treating carriers like a commodity; they are working with them. That means moving away from one-off tenders and toward developing more holistic, sophisticated, and sustainable solutions that include data sharing.

There is capacity out there for those who know what they are doing and how to tap into it.

Legislative developments. Legislation is the true wild card for 2019. Small regulatory changes can have a tremendous cascading effect on supply chains.

New driver regulations/limitations, reductions in personal liability, or rule changes impacting foreign drivers all have significant downstream implications for the logistics sector. One year ago, changes in the area of liability or foreign permissions seemed inevitable. The forecasted slowdown in the economy, however, will likely create more capacity, alleviating some of the pressure.

Blockchain technology. The backbone of cryptocurrency has much wider use potential beyond its crypto origins. Blockchain can be used to track transactions with great specificity and without being manipulated.

A great deal of fascinating research and development is happening regarding applications for strengthening and streamlining supply chains. It wouldn't be a surprise to see some innovative new blockchain-based applications unveiled in 2019.

Autonomous vehicles. While we can expect to see more autonomous vehicles on the road in 2019, the rollout will continue to lag well behind the media hype. We will likely see activity in line-haul and highway driving applications, not in pickup and delivery.

The long-term promise of autonomous vehicles is exciting, and should create flexibility and unlock new efficiencies. But the near-term impact is still likely to be minimal—partly because of the expected slowdown and a corresponding easing of demand.

The bottom line? 2019 will feature many of the storylines that emerged in 2018 playing a more prominent role. Perhaps the biggest story will be an anticipated softening in the markets. One thing is certain: Supply chain professionals will need to be flexible and able to respond with both speed and sophistication to whatever comes next.