Future global trends in shipping and logistics and opportunities for Sri Lanka

By Shenali de Silva

The shipping and logistics industry in Sri Lanka is at a pivotal point, as the Government focuses on leveraging its strategic location to position the country as “the Hub of the Indian Ocean”. As highlighted in the Vision 2025 policy document, the Government intends on expanding port infrastructure and services, strengthening transhipment trade, and implementing a single window to improve the environment for doing business. If met out, these measures are likely to significantly improve the environment for companies operating within the sector.

To capitalise on these trends and more, operators in the sector need to strategise and prepare for the opportunities which lay ahead. Corresponding with Shenali de Silva, Research Associate at the Ceylon Chamber of Commerce, Ruwan Waidyaratne, Managing Director of Hayleys Advantis Ltd., and a member of the Ceylon Chamber’s National Agenda Committee on Logistics and Transport, speaks of future global trends in the logistics industry and how companies can capitalise on these.

1.Increased strategic alliances and consolidations in the freight industry – Creative, agile, and technologically advanced companies are likely to be sought after for strategic partnerships

Ruwan states that going forward, we are likely to see, mergers, alliances and divestments taking place in the global shipping industry. Driving this trend is the urgency for companies to improve capacity utilisation, reduce costs and sharing of industry best practices. It is the view of experts that in the near future, the top carriers are likely to control over 65% of the total market volume while, smaller players would need to focus on niche markets. On the other hand, the emergence of e-commerce and other advanced digitalised trading platforms, consisting of high tech fulfilment centres, last mile delivery arms and systems to facilitate international freight operations to reach end consumers will continue to put pressure on point to point agents. 

In the long run, companies with lean and agile processors, technologically advanced systems with the ability to provide creative solutions, and a wide network of partners across the industry are most likely to be poised for strategic partnerships. 

2.Automation to result in heavy occupational redundancy in key 

industry areas

The future of logistics is paved with innovation and technology. Emerging trends in every vertical will reshape the logistics market in future. While significant technological disruptions by way of task and process automation will contribute to increased efficiency and productivity, it will also result in heavy occupational redundancy in key industry areas. 

Areas of traditional warehousing and distribution operations for instance are experiencing greater automation. With the emergence of e-fulfilment centres companies are constantly trying to maximise throughput through the use of automated material handling equipment, high speed conveyer systems, and robotic applications for pick and pack operations. Transnational corporations are entering a new era of fast communications, lean-production practices, and “just-in-time” marketing and distribution operations relying increasingly on a new generation of robotic workers. On the other hand, advanced warehouse management systems will continue to re-engineer and restructure warehousing operations.

Emphasising the important role automation will play Ruwan says: “Also, in the future we will see the deployment of self-driving vehicles which will automate outdoor logistic activities such as container handling at ports and airports and will in fact be deployed in shared public spaces including highways and streets. On the other hand, we will see the emergence of autonomous ships that will revolutionise the shipping industry with remote controlled cargo ships that can transport goods without needing a single human on board.

“All in all, with the widespread acceptance and usage of automation as a technology, we will see the demand for human labour in certain sectors declining. Specially, the skilled labourers in warehouses, material handling equipment operators, heavy cargo truck drivers, warehouse inventory managers etc. will be significantly impacted.”

3.Social skills, analytical skills and problem solving skills will be highly sought after

“I believe social skills such as emotional intelligence, persuasion, will be in higher demand across industries as opposed to more technical capabilities,” says Ruwan. Furthermore, greater empathy in problem solving skills, cognitive skills such as creativity and mathematical reasoning, content skills such as technology literacy and active learning will be much sort after in the industry. 

The growing use of ICT, will very likely transform the routine functions of many front line roles especially in sales, marketing, project management, etc. across all industries requiring higher levels of technology literacy than in the past. 

4.Companies need to continuously evolve, strategise and plan in order to remain abreast of the competition 

In order to stay ahead of the game, and constantly keep up with the changing trends, companies need to devise various ways and means to strategically plan its growth ahead. First and foremost, companies need to be open for change and constantly look out for opportunities and threats these new trends can offer. 

Investment in research and development, learning from industry best practices and closely following dynamic and live industry benchmarking tools are some key initiatives that can help organisations to enhance knowledge and take proactive measures to deal with future changes. Hence, as business leaders we should strive hard to shape the culture of our organisation to continuously drive innovation across all levels. 

In addition, successful collaborations with business partners and even competitors are of utmost importance. Companies also need to adopt lean and agile processors, flexible systems in order to prepare for these trends. 

Ruwan emphasises that “it is my firm belief that, positive results and success, comes from the implementation and execution of strategies, business structures, models, processors and technologies which is the most challenging task of all. Considering the overall benefits, I believe these trends will help to radically reduce costs and revolutionise operations of businesses. Also technological disruptions will help to drive efficiency across all functions while making transactions faster and secure.”

The growing use of the internet and related technology is breaking down all geographical barriers to make the world a more connected and closer place. Hence in this day and age where the digital divide is narrowing at a rapid pace, we will soon begin to feel the impact of these external developments sooner than expected, states Ruwan. If companies are not geared to embrace and cope with these changes, it will certainly threaten their survival and may even perhaps face complete annihilation.