Where Will the Shipping Industry Be in 10 Years?

Where will the shipping industry be in 10 years
Businesses are expanding their customer base and prioritizing their online storefronts. Brick and mortar retail stores are in decline while online sales continue to soar. As the world becomes more globalized, the need to ship materials and products increases exponentially.

Large cargo shipEnterprises continually demand more efficient, cost-effective means for shipping their goods or materials. Construction and industrial business are on the rise. This demand is only expected to increase in the future, which leads to increased shipping demands.

Companies continue to cultivate pioneering solutions for shipping and storing materials that were previously difficult to ship. Drones, robots, and automation are discussed in news reports daily as ways to enhance shipping methods and improve delivery schedules. America’s largest retailers and shipping logistics centers all over the world are experimenting with these groundbreaking technologies. Many argue the future of shipping is now.

Given the rapid developments within the shipping industry, it is easy to imagine how innovative and different the shipping industry may be in ten years.

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A Focus on the Bottom Line


Since the economic decline in 2008, businesses hyper-focus on the bottom-line. Streamlining a business over the next ten years will become a key priority for most companies.

Utilizing the most cost-efficient shipping methods, as well as consolidating operating processes and workforces, will occur more frequently.

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Competition Among Retailers and Shipping Partners


The shipping industry today is a $2.1 trillion market, with retailers like Amazon, Walmart, and Alibaba competing for the fastest, most reliable shipping methods. Shipping transportation and logistics present both a challenge and a tremendous opportunity for these e-commerce retailers.

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Amazon has focused its efforts on reducing delivery times by launching same-day delivery service offerings through Amazon Prime Now. In ten years, many other retailers are likely to follow suit with similar services.

Almost 20 different shipping partners handle Amazon’s shipping needs. Legacy shipping companies like UPS, FedEx, and USPS must keep up with changing shipping requirements and technology if they want to maintain their share of the market.

The competition is fierce. Shipping companies continuously search for and experiment with new technologies to decrease delivery costs and times and improve reliability. For example, UPS reduced gasoline usage by millions of gallons and avoids emissions equivalent to over 20,000 passenger cars per year by using software that figures out the most efficient route for each truck.

By 2027, experts predict all major shipping concerns will utilize artificial intelligence and automation tools to improve these key factors. If they do not, they will be out of business within the next decade.

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Automation Will Become the Standard


Currently, shipping companies are exploring more significant means of automation in everything from marketing, to their route planning, to their logistics center operations. This focus on automation, currently considered an innovation, will become the standard within the shipping industry. If a company is not automated, it won’t last in the modern shipping industry.

Amazon is a world leader in innovative shipping solutions today. It has been testing using automated drones for delivering small packages within a short range of its distribution centers. The drone delivery service promises to get packages to customers within 30 minutes or less, which is impressive by today’s standards. Technology will only continue to advance in ten years, and the future will most certainly be automated with drones, robots and self-driving cars, trucks, boats, and more.

The popularity of online purchasing and digital transactions will grow to record highs in 2027, which will only further increase the demand for fast and reliable delivery. Inventory control systems will be the first area of operations within the shipping industry to be automated. These automated tools require little manual oversight. They will incorporate best-practice machine learning techniques to continue improvements automatically.

Automated control centers are already in development. In the future, these control centers will provide real-time updates, adjust operational settings to increase efficiency, and provide the ability to be controlled remotely. These factors will reduce labor costs, as the number of workers needed on-site will decrease significantly.

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Artificial Intelligence


Artificial intelligence (AI) technology covers everything from the development of self-driving vehicles, to business intelligence tools, to the creation of robots. Robots and AI-based devices are a hot topic of debate today. Proponents of the technology, like Bill Gates, tout its benefits to help us make more informed, logical decisions, while others, like Elon Musk, publicly voice their concerns over a controlling, smarter AI-based workforce.

Artificial Intelligence brainWhatever your current stance is, it is clear artificial intelligence is a flourishing field. It will undoubtedly have a lasting impact on the shipping industry.

In ten years, artificial intelligence is expected to become so ubiquitous that interacting with an AI-powered device or robot will become the norm. Artificial intelligence will enable shipping companies to make more informed, logical decisions. This will allow carriers to optimize cost-efficiency, delivery times, weather reports, and other resources that are a necessary part of the shipping process.

Physical robotic artificial intelligence will allow logistics centers to operate more efficiently. Robots will scan data and retrieve packages, and even work assembly lines. All this will aid in a more efficient shipping industry and has the potential to change the face of the workforce.

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Everything Will Be Self-Driven


The average age of American truck drivers today is 63. Similarly, the number of pilots or pilots-in-training is rapidly decreasing. This aging workforce is one of many factors that will rapidly push the shipping industry toward self-driving technology.

Autonomous vehicles will be perfected over the next ten years, and this will become standard in the shipping industry. Autonomous forklifts or drones will retrieve items. Local deliveries will be made by self-driving trucks or cars. Overseas cargo will be shipped via pilotless airlines or captain-less ships.

Much of this is already in the works, with Amazon developing a team earlier this year to focus solely on driverless technology, which will further reduce labor expenses. Although, initially, a person must stay aboard as a safety precaution, it could evolve toward a drone-type driver that controls many vehicles remotely.

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Changes Will Revitalize the Maritime Industry


Shipping overseas remains the most cost-effective way to move large goods across a long distance. Autonomous ships promote shorter travel times while also improving the competitiveness of the overseas shipping industry.

A Norwegian maritime company, Kongsberg Seatex, is already close to making this a reality. They are conducting a series of autonomous shipping technology tests in cooperation with the Norwegian University of Science and Technology (NTNU), Maritime Robotics, and the Norwegian Defense Research Establishment. In ten years, this technology will improve tremendously. Smart shipping boats will not only be self-driving but remotely controlled to avoid collisions or find more efficient routes.

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Fleets Will Be Faster but Smaller


Smaller Cargo Ship

With this narrowing focus on efficiency and cost-effectiveness, many in the shipping industry are expected to increase their fleets. Transportation times are expected to decrease as technology improves. Fleets will be faster but will likely decrease in size because it is easier to move smaller boats and planes around. The frequency of usage per vehicle is also likely to increase.

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Sustainability and Energy Efficiency Remain a Priority


In 2011, the Sustainable Shipping Initiative (SSI) assessed the sustainability challenges that the shipping industry faced, along with crucial areas for improvement. In a response to that since then, investors have focused heavily on developing alternative energy solutions and identifying opportunities for sustainable action.

Over the next ten years, the increased frequency of traveled shipping routes will strain the supply of gas and oil, which will heighten sensitivity to sustainable practices and energy alternatives. Automation and AI will prove very useful in helping to reduce environmental impact within the shipping industry.

AI will assist by analyzing data, such as chassis distribution, to recommend more sustainable and efficient shipping practices, which help to reduce companies’ carbon footprint. Automation will take this one step further by implementing control settings to optimize equipment or transportation performance. Combined, these two technologies will prove beneficial to the environment and to companies’ bottom lines.

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Companies will employ sustainability experts to maintain higher efficiency standards. Nearly all logistics centers will seek Leadership in Energy and Environmental Design (LEED) certification, which is a set of minimum building sustainability guidelines devised by the United States Green Building Council (USGBC). It is used in evaluating sustainable building designs and practices.

The shift away from gas-powered vehicles toward electric vehicles and battery-powered ships will further this sustainable movement. Other alternate energy sources, such as wind, hydrogen, and biofuel, will also be used more frequently over the next decade, ensuring carriers will not experience shortages of these finite resources in the future.

Sustainability efforts will have a positive impact on the environment and the global climate. Shipping carriers can renew their energy sources through advanced, quicker electric-charging stations and technological advances, giving them an operational advantage.

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Shipping Industry Connectivity


Today, we already live in a connected world where you can track your packages to get a relatively accurate estimate of when it will arrive. In ten years, this connectivity is expected to only improve.

The shipping industry will seamlessly connect its customers with real-time, highly accurate tracking information. Global carriers will improve their GPS technology and connectivity to help track goods traveling around the world. These connected data tools will revolutionize the industry.

Additionally, the conservative, current-day practice of using cash-based transactions for trade will become extinct. All transactions will be entirely digital with a multitude of digital payment options available. Cyber-security will become a focus in the shipping industry of the future as this shift to digital payments nears completion.

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Innovative Shipping Materials


Material innovation will also lead to changes in shipping practices. Stronger, lighter-weight, more flexible shipping materials will be developed. More sustainable shipping materials will also be used.

Packaging that is less cumbersome and easier to pack and open will also be a key component of future shipping materials. Many companies today are already cutting out unnecessary packaging from their shipments. This trend is likely to continue.

Size will take on a greater emphasis as innovative solutions that allow the maximum volume to fit within a minimal space, like IBC totes, will increase.

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Independent Contractors and Career Development


The shipping industry will continue to offer exciting career opportunities, but the focus of labor will shift. Less emphasis will be placed on manual labor, and employees will be encouraged to take on more specialized training.

Automation and artificial intelligence will take away more remedial, manual labor positions. These will be replaced with a higher demand for employees with technical skills, such as machine learning, AI, and data scraping. Project managers and supervisors will also play a more significant role in future career development within the shipping industry.

two young workers man in uniform in front of warehouse rack arrangement stillages

Additionally, there will be a shift away from full-time employees. Increasingly, shipping companies will utilize gig-economy workers, freelancers, and consultants to complete assignments on a per diem basis. Largely due to automation, companies can reduce their overhead significantly.

The gig-economy will offer employers the unique opportunity to activate an entire workforce of independent contractors immediately, increasing service areas for the most efficient door-to-door deliveries for shipping companies.

The marketplace is changing rapidly and, within ten years, those who adapt will enjoy the new opportunities created. Unfortunately, those who do not will likely no longer be employed within this industry.

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Conclusion


The economic decline of 2008 led many companies to reassess their expenses. Within the shipping industry, this shifted the focus to cost-effectiveness. Combined with the globalized economy, the demand for efficient yet affordable shipping methods has increased.

Innovative solutions have been developed to meet these increasing demands. The shipping industry is expected to have taken a dramatic step toward automation and artificial intelligence. Auto-driven forklifts are likely to be as commonplace as robots working on assembly lines. Innovative shipping materials will also aid in the industry’s growth.

Sustainability and energy efficiency are also critical factors in the shipping industry of the future. Logistics centers are expected to seek LEED certification and streamline their operations at a much higher rate than today.

Additionally, the so-called gig economy is likely to result in a higher number of clustered, independent contractors and drones carrying out deliveries. The workforce of the shipping industry in 2027 is expected to look very different from how it does today.

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