Introduction
One thing has become clear over past centuries and decades, without logistics the world stops. According to Investopedia (Nordqvist, C, 2019); logistics refers to the overall process of managing how resources are acquired, stored, and transported to their final destination.
Throughout history, stories of nations invading other nations is a common theme. From the great Persian Empire through to the Roman and Greek Empires (to name a few), logistics were a crucial part of their survival, as troops needed adequate supplies as they conquered kingdoms. As the adage goes, order stems from chaos; hence the earliest troops that went to war (chaos) were supported by the world’s first logistics systems (order). It is incredible to think that ‘war’ gave birth to something as useful as supply chain systems and operations.
From those early times, moving into the Middle Ages and further into the Industrial Age, logistics around the world grew, developed and flourished, supporting not only the military but the ‘everyday man’. Roads, ships, railways, cars, and warehouses were built during these Ages and the framework of logistics systems were readily put into place. Suddenly, the world became far smaller and easier to navigate.
The supplies of the world are not only within reach but oftentimes only a simple ‘click’ away.
Nowadays logistics is far more accessible and user-friendly than ever before. The supply chain is now supported by cloud-based systems, machine learning, AI, automation and even robots (that spend their days picking and stacking). Mind blowing technology has revolutionised the industry and the world is reaping the benefits.
Looking back on history, it is amazing to see the advancements humanity has made towards better global logistics operations. The way we are operating now should get both consumers and businesses even more excited for the future. Who knows, maybe space vacations and intergalactic take away will be something on the horizon?
Imagine a world without logistics
It is difficult to imagine what the world would look like without supply chains. They contribute to human survival, improve quality of life, create jobs and support commerce.
Despite their importance, most people only notice them when they become problematic.
The COVID-19 pandemic exposed the vulnerabilities in global supply chains. The reaction mode to continue operations has had significant cost implications, determined by resource availability, ultimately impacting profitability.
One notable impact was a steep hike in shipping rates, as transport ground to a halt and a worldwide backlog of containers built up in ports around the world. Another was a dramatic increase in the number of people shopping online as measures to safeguard public health meant that many were confined to their homes. Logistics service providers were forced to get creative and identify means of mitigating costs while maintaining the speed and quality of service that the world economy relies on.
Trade in Transition 2023
Against the backdrop of the covid-19 pandemic geopolitical events, such as the war in Ukraine and US-China tensions, and a series of geopolitical and environmental upheavals, have created great uncertainty for businesses. In response to the resulting supply disruptions, and in anticipation of a slowdown in trading activity in 2023, businesses are focused on enhancing their resilience for the longer term with the aim of insulating themselves from future shocks.
The World Trade Organisation (WTO) expects the volume of world merchandise trade (an average of goods imports and exports) to grow by one percentage point in 2023, compared with 3.5% in 2022. So, amid all the disruption, there are still opportunities for growth, but businesses need to uncover where such opportunities lie.
The robust recovery the world anticipated in 2022 never materialised. The shocks that plagued global trade in 2020 with the onset of the covid-19 pandemic persist even today – through old and new avenues. In China, the world’s largest export market, the legacy of pandemic-related lockdowns continues to blight the country through rising infections, derailing regional and global supply chains. In addition, Russia’s invasion of Ukraine has resulted in surging energy prices, supply disruptions and protectionist policies, reminiscent of the early days of the pandemic.
Consequently, business leaders are becoming acutely aware of how dependant their businesses are on supply chains and the need to build resilience in order to future proof these systems. This is where we see Artificial Intelligence (AI) becoming an invaluable asset.
If anyone has not noticed, AI has made the transition from being a futuristic technology into one that we use in our daily lives – yet we call it emerging as it continues to rapidly evolve and transform. So how can we use it to build resilience?
AI’s role in building resilience:
1. Visibility is improved when AI is used to rapidly process and correlate large amounts of structured and unstructured data from disparate internal, external and in-flight sources. With the ability to present data in a meaningful manner.
2. Automatically reconciling, discovering patterns, detecting, and predicting disruptions or anomalies helps to reduce response times.
3. The ability to provide contextual awareness and insights across business silos, recommend alternate or next best actions, and assist humans to make quick and informed decisions. In return, teams are able to manage exceptions and mitigate disruption.
Many leaders are eager to find out what the first step is, what the risks are, and how to drive change across the organisation with so much going on.
This is what the future of logistics will look like
To continue to deliver the goods that consumers want, and societies need, a new attitude and approach toward supply chains is required.
Logistics hubs, like Bahrain’s Global Sea-to-Air Logistics Hub, could provide the blend of resilience and speed required for modern logistics.
In today’s globalized and interconnected society, modern consumers demand goods that are both affordable and readily available at a moment’s notice. This depends on reliable and resilient supply chains.
But supply chains are only as good as their weakest link — and, as the past few years have shown, that weak link often ends up being transportation.
So, how can companies provide the value their customers demand without sinking their budget into transport logistics or obstructing the flow of goods so crucial to the world economy?
Multimodal shipping may hold the answer.
What is multimodal shipping?
Multimodal shipping — also known as combination, sea-to-air, or air-to-sea shipping — uses multiple forms of transport to deliver goods in a timely and cost-effective manner. It combines the best of both worlds: the rapid shipping time of air and the cost savings of sea.
One of the most important aspects of successful multimodal shipping is the presence of a functional and efficient hub through which goods can flow — an area in which the customs process is smooth and the links between entry and exit points are unobstructed.
Building a logistics hub for the future
Bahrain launched its Global Sea-to-Air Logistics Hub in October 2021 as part of its Economic Recovery Plan, a comprehensive multi-sector strategy designed to mitigate the effects of the COVID-19 pandemic and boost economic growth. It is the fastest multimodal hub in the region with an average lead time of two hours and direct air links to over sixty destinations through commercial, freighter and cargo airlines. Sea-to-Air Partners are granted immediate express release from ports, and the entire process is made possible by a combination of regulatory and operational alignment, port efficiency, digital processing solutions and close port proximity.
Bahrain’s innovative combination of multiple transportation methods with modern technology means that shipping via the Sea-to-Air Logistics Hub is 40 percent more cost-effective than pure air freight and 50 percent faster than pure sea freight.
This investment in the logistics sector, which has had a multiplier effect, uplifting other parts of the economy, is a key part of Bahrain’s broader economic strategy.
The Future of Logistics
The pandemic was a turning point for the global economy — but it was already on the move. The pandemic merely provided a catalyst for change. Consumer habits are evolving. High-quality products and rapid delivery are no longer mutually exclusive. A global, digitized, “always-on” economy is not confined to the future. It is already here.
Logistics suppliers are also fragmenting their operations in response to this shift, spreading out their processes to minimize concentration risk and the disruption caused by events like geopolitical tension or a pandemic. Technologies like blockchain can guarantee transparency and quality.
The future of logistics will certainly be digitized, but also agile, multifunctional, spread across geographies and truly open. That is exactly what the global economy needs.
Dependable and tailored logistics solutions are hard to come by in today’s economy, and our team of TGL THINKERS always go the extra mile to ensure that the trials and tribulations of your business are solved via our extensive knowledge and global network access.
And as York Köhn said, – logistic is not everything, but everything would be nothing without logistic.
