Five Ways International Logistics Will Undergo Transformation in 2023

International logistics or cross-border logistics market is expected to be USD 55.47 bn by 2026 and demonstrate a growth rate of 11.71% CAGR, with 43% of growth to be originating from APAC regions. While the rising eCommerce and increased penetration of mobile computing devices have significantly contributed to the growth of cross-border trade, market disruptions and changing customer purchase patterns are triggering unique trends. From increased inventory mishaps leading to slack in demands to the immense rise of eCommerce shoppers and businesses leading to increased LTL shipments – the international logistics industry is teeming with nuances and disruptions.

Hence, it becomes essential for supply chain professionals, businesses, 3PL service providers, and freight forwarders to have an understanding of the upcoming trends in the industry. Below, we share the top five trends in international logistics that every stakeholder should look out for in 2023.

International Logistics 2023: Top 5 Trends to Look out For

#1 Evolving Customer Expectations Triggering Diverse Service Offerings

With the internet and smartphones penetrating more geographies, customers are increasingly exhibiting unique online purchase patterns. One such powerful example is cross-border eCommerce, which accounts for 22% of e-commerce shipments of physical products. While 62% of customers expect their deliveries to be free and to reach them within three business days, 76% of consumers report that they will stop doing business with a brand that treats the environment, employees, or the community poorly.

Hence, brands are pressed for diverse service and product offerings that are managed and delivered as per the industry-best practices for operations, customer experience, and sustainability. This nudge is contributing towards the transformation of core processes where businesses adopt smart automation to keep pace with evolving customer demands.

#2 Sustainability Will Garner More Attention 

As hinted above, sustainability is going to be a game changer in 2023 for all industries, from manufacturing to on-demand and retail to quick commerce. PwC reports that 80% of consumers are more likely to buy from brands with ESG commitments, and nearly 90% of Gen X customers are willing to spend 10% more on sustainable products. This figure has grown significantly over just 2 years from 34%.

A recent BCG survey revealed that 95% of consumers believe that their personal actions can help reduce unsustainable waste and address climate change. This rented focus on sustainability and environmental awareness is again nudging the companies towards more sophisticated ways to curb Scope 1, 2, and 3 emissions, and advanced technologies are being rapidly incorporated into the business models for the same.

#3 Increased Focus on Digitization to Drive Business Growth

With intense competition in every industry and core infrastructure segment, businesses rapidly realize the difference smart business automation can make and the way it can fuel revenue growth. Hence, digitization is going to gain momentum as more and more businesses look for smarter ways to manage, monitor, track, control, and plan for their processes and operations.

Leveraging AI/ML for granular workflow automation, real-time IoT data for shipment tracking, predictive analytics for inventory planning, demand forecasting, and risk containment, and advanced data analytics for impeccable business intelligence – the list is endless.

#4 Reshoring and Nearshoring in Manufacturing

As the U.S.-China relationship continues to become disparate and the Russia-Ukraine conflict ensues without any nearby resolution, the global supply chains for the manufacturing industry are in for a major change. Businesses, especially manufacturers, are re-examining their production strategies and are highly likely to return manufacturing production and sourcing back to the Americas.

With the cost of shipping rising, diesel prices skyrocketing, and businesses assuming a more defensive stance in the wake of the global economic meltdown, supply chain professionals are planning for risk avoiding instead of risk mitigation. This shift brings a whole set of changes to the international freight industry.

#5 Automation, Analytics and Blockchain for Visibility 

As the world enters the age of global trade and businesses look for innovative ways for brand distinctiveness, visibility becomes imperative. Visibility over shipment movements, processes, stakeholders, transactions, asset utilization, resource consumption, and strategizing – this is a huge use case for smart technologies.

Intelligent automation such as distributed monoliths for excellent microservice, real-time analytics for highly reliable and resilient planning, and decentralized ledgers like Blockchain for fair governance – are some of the most promising technological trends in international logistics. 

From this discussion, it is evident that the future of logistics is awesome and full of exciting opportunities and endless possibilities. How it unfolds in the coming year and whether the businesses are prepared for that or not is something that is going to make the entire difference in 2023 and beyond.