The impact of e-commerce means global supply chains will be transformed within a decade, with giants like Amazon completely redefining global shipping and logistics, according to one research analyst.
“From Amazon’s own aircraft and shipping services, to deliveries direct to consumers’ fridges; and from Blockchain and the IOT to 3D printing –the impact of e-commerce means global supply chains will be transformed by 20208,” according to David Jinks, head of consumer research for courier delivery giant ParcelHer0.
At a time when US trade policies seem to be the biggest threat to the global supply chain, Jinks will tell the Digital Ship Maritime CIO Forum, to be held in London next week, that the average shopper will have a far bigger impact not the industry than President Donald Trump.
“When, back in May 1984, a 72-year-old Gateshead grandmother, named Mrs Jane Snowball, purchased groceries from her local Tesco store in the world’s first ever online shopping transaction, a chain reaction was started; the full impact of which is still only beginning to be realized. From the BHS collapse to House of Fraser’s current woes it’s carnage on the high street; and this tsunami will reach global trading networks next.”
Jinks predicts companies such as Amazon will use their own logistics services to drive international trade, bypassing traditional global logistics providers. He will tell the Forum: “Amazon Prime members spend twice as much as non-members with the e-commerce giant, and it uses free deliveries, one-hour services etc as a hook to gain new members. By persuading retailers to use its Fulfilment by Amazon Pan European/US services, Amazon will create new shipping patterns and transform the industry. It’s all part of its avowed aim to be the pipeline through which everything is delivered”.
However, he warns: “Think about what you see on your doorstep. Amazon Logistics now delivers most of your Amazon packages, not the Royal Main, for example. And don’t go thinking Amazon Logistics is only about delivering its own products. That’s not the half of it. It has moved into Chinese/US logistics as a providers of entire services.”
Amazon Logistics+ is targeting small and mid-sized Chinese wholesalers. “How long before Amazon controls its own fleet of shops too?” Jinks asks.
“Don’t go thinking Amazon won’t at least consider leasing its own vessels. Amazon already runs its own aircraft fleet. As of January, Amazon Air had a fleet of 32 Boeing 767 freighters flying out of Kentucky,” he adds.
Meanwhile, closer to home, home deliveries and e-commerce are transforming the requirements of the UK’s supply chains. A new hub and spoke logistics model will feature mega hubs on city outskirts feeding small hubs inside urban areas. Electric vehicles, droids and drones will then be used for final mile deliveries as the crackdown on diesel intensifies.
“Why must you go to the mountain when the mountain can come to you?” Jinks asks. “Amazon has patented floating warehouses called Airborne Fulfilment Centres (AFCs) that sort items en-route and could be used at special events etc. AFCs would be in position over major cities ready for peak delivery times and would be ideal for music festivals and sporting events.”
Jinks points to other new technologies that will fundamentally change global supply chains. The Internet of Things, he says, will re-order products automatically, meaning demand can be anticipated, cutting down on storage requirements. And internet purchases in the future will be delivered direct to the car boot or kitchen. Smart packaging will also alert shoppers where a product is in store.
He also highlights the growth of 3D printing, which has now “moved beyond plastics and resins”.
“It’s probably manufacturers and e-commerce retailers will develop a hybrid manufacturing and distribution centre, creating and despatching larger items that can’t be produced on a home 3D printer. Perhaps one day the only thing we ever ship globally will be strips of plastic and metals for use in domestic, hybrid manufacturing/distribution centres and high street printers. 3D printing will certainly create a new dimension in supply chains as products are made available for delivery literally hot off the press”.
Source: Just Style, “Amazon Set to Redefine Global Supply Chains by 2028“. (https://www.just-style.com/news/amazon-set-to-redefine-global-supply-chains-by-2028_id133738.aspx) . Michelle Russell, June 13, 2018.
Image: Just Style