The food and beverage logistics industry will grow by $69.69 billion between 2021 and 2025. This growth offers manufacturing and logistics companies immense opportunities over the next 3 to 5 years.
To tap into the growing profits of the industry, it’s important to understand the biggest trends impacting the industry’s future. Our experts have identified six major trends that are shaping the future of the food and beverage logistics industry,
Six Trends Shaping the Future of F&B
The major trends in the food and beverage logistics industry can be summarized as environmental, technological, and providing additional services. Some of the biggest trends we’re seeing are sustainable transportation, integrations with the Internet of Things (IoT), the growth of final mile service, increased expectations for traceability, expanding analytics, and growing automation.
1. Food and Beverage Logistics Go Green with Sustainable Transportation
Climate change looms large over logistics and every other industry. In 2021, the transportation sector in the United States was the single largest emitter of greenhouse gases, emitting 1.5 billion metric tons of C02.
Sustainable logistics practices are not just important because of climate change; they’re also good business practices. A study by USPS found that 62% of customers sought out products with labels that promoted those products as energy efficient. Consumers are demanding more sustainable products, and, like every other industry, logistics companies are answering those demands with new innovations and plans.
The push for more environmentally friendly logistics isn’t just coming from sustainability-minded consumers; it’s also an increasing focus of governments globally. As nations seek to minimize their greenhouse gas emissions and address climate change, lawmakers are increasingly focusing on logistics and transportation’s role in greenhouse gas emissions. It’s the smart business choice to begin focusing on your logistics footprint today so that you’re already compliant with new laws when enacted in the coming years.
Electric vehicles are poised to revolutionize the carbon footprint of the logistics industry in the next 10 to 15 years. Electric trucks powered by one or more electric motors produce zero greenhouse gas emissions while operating. As technology improves, these vehicles become more efficient and affordable every year. The mileage a truck can travel on a single charge is increasing. Soon, electric trucks will offer approximately the same benefits at about the same price point as traditional, gas-powered trucks. According to one report, electric trucks could make up about one-third of all trucks in the United States by 2030.
Another technology that promises to lower greenhouse gas emissions is alternative fuels. There are a number of fuel alternatives, including propane, natural gas, electric hybrids, hydrogen fuel cells, and biodiesel. Fuels like ethanol and biodiesel used in traditional gasoline-powered trucks produce fewer greenhouse gas emissions during use. Biodiesels take oils like used cooking grease and react them with alcohol to create a biodiesel that can be mixed with traditional gasoline. Biodiesels accomplish two goals: reusing cooking byproducts and reducing greenhouse gas emissions. Natural gases altered through compression or liquefaction make substances used in conventional cars to create an equivalent performance at lower emissions.
Another more experimental technology is hydrogen fuel cells. Currently, hydrogen is used to power space shuttles, but not much else. Theoretically, hydrogen can react with oxygen in an engine to produce electricity without greenhouse gas emissions. However, the technology for hydrogen cells in cars and trucks is still quite a ways off.
2. The IoT Brings A New Meaning to Visibility
IoT has substantially impacted the logistics industry and introduced new technologies to improve and expand logistics services. For food & beverage logistics, these new technologies mean improved cold chain logistics and monitoring through various new technologies.
One way IoT is bringing improved food safety is through wireless monitoring and tracking. Radio-frequency identification (RFID) tags, GPS sensors, and eSIMs are all technologies that improve tracking and monitoring of shipments. With IoT, artificial intelligence (AI) can use the data collected to predict better routes or identify issues. Overall, shippers and companies can maintain greater oversight of location, temperature, and conditions, and rest easy that IoT AI is checking the data for potential issues to help prevent problems.
IoT can also revolutionize fleet management. Technologies can track real-time location, weight management, vehicle status, and even speed. IoT helps optimize routes, improve scheduling, reduce idling, and improve overall performance. These improvements can translate into better profits and prices for logistics companies and those shipping with them.
Both of these applications have specific implications for perishable food and beverage transportation. Food logistics requires maintaining a strict cold chain and protecting food from contamination and spoilage. IoT can be paired with tracking technologies to create immutable data demonstrating that cold chain standards were upheld. IoT can also track humidity, temperature, and more in real time, alerting operators to potential issues. Finally, IoT can also avoid potential problems by suggesting preventative maintenance based on data and optimizing logistics routes and conditions.
3. The Growing Demand for Final Mile Service
In late 2022, e-commerce sales exceeded $250 billion. With so much online shopping for everything from clothing to groceries, the final mile service is becoming increasingly crucial for carriers.
Customers are expecting quick, reliable shipping for all their products more and more. Ninety percent of customers expect two- or three-day shipping for online purchases. But those expectations come at a cost. Today, final mile service accounts for approximately 53% of the total shipping cost.
In response to this growing demand, many providers are turning to crowd-sourced deliveries in response to this ever-increasing demand. Rather than relying on established logistics companies, crowd-sourced systems use individual contractors to offer cost-effective, low-overhead delivery to consumers. Think of food delivery models like UberEats or Postmates. While crowd-sourcing can save money and time, it’s more challenging to maintain last-mile accountability for cold chain logistics for perishables. This may be where IoT technologies can complement other logistics needs.
4. Technology Transforms Traceability Expectations
New technologies are changing expectations of supply chain traceability. Technologies like blockchain and RFID enhance supply chain visibility and create a new normal for cold chain logistics.
Now, technology makes it possible for traceability to be overseen and recorded from production to delivery. This is a huge step forward for cold chain logistics because it means that everyone, from manufacturers to carriers, can prove that they are observing laws and best practices. Enhanced traceability means better food safety and reduced food waste as fewer shipments spoil.
5. Actionable Analytics Take Hold
The enhanced data and analytics now available for shippers to analyze are connected to traceability. As carriers collect more data on shipments about everything from temperature to route to speed, they can utilize this data to analyze their processes and leverage these insights to optimize their operations, forecast demand, and improve routes. The resulting cost savings and operational efficiencies can be passed on to clients.
These analytics can also allow companies looking to ship goods to find better rates. By analyzing freight prices, demand for carriers, and macro factors that impact supply and demand, companies can predict the best times to book new freight business.
6. The Growing Reach of Automation
Automation is expanding to every step of the transportation process. For LGI, technology is improving the way they price freight. Their dynamic freight pricing technology enables them to use historical data on pricing to determine the best price for new shipments. Automation makes it possible to leverage large quantities of data and find the most competitive rates.
Increasing automation also enables companies to focus on employee training and better-utilizing employee expertise. Instead of allocating several employees to determining prices for all inquiries, a company utilizing dynamic freight pricing can reassign those employees to more skilled work that cannot be as easily automated. With the easier work taken care of by automation, employees can focus on more critical work that requires their knowledge and skill.
The Future of F&B is Brighter Than Ever
Though all of these trends are poised to revolutionize F&B, partnering with industry experts is the best way to future-proof your F&B logistics while staying on the cutting edge. 3PLs like LGI provide the tools to tap into these trends, meet growing expectations and regulations, and succeed in a dynamic industry.
With over 30 years of experience, LGI offers a distinct advantage for companies looking to ship food. They provide the full service, handling everything from permits to coordinating with local authorities, and ensuring that experienced carriers transport your cargo safely and quickly to its destination.
Improve Your Shipments by Tapping into F&B Trends
The food and beverage logistics industry is growing rapidly. Successful businesses can tap into these trends to improve their shipments through more sustainable transportation, better integrations with the Internet of Things (IoT), improved final mile service, increased traceability, better analytics, and growing automation. Are you interested in leveraging these new trends for your business needs? Experts at LGI can help you determine the best ways to improve your options and services. Get in touch today.