Six warehousing trends for 2024

Six warehousing trends for 2024

There has been unprecedented pressure placed on global supply chains in recent years due to the global economy shifting, some prolonged consequences of the COVID-19 pandemic, as well as multiple political conflicts that have profoundly changed global markets and decreased the global race for more warehousing space.

Today, in-person shopping and e-commerce coexist seamlessly, according to the customer’s preferences, where warehousing is servicing orders day and night, to keep up with delivery promises as short as “next hour”. Despite all these challenges, as customers' demand rises, companies are currently looking for ways to build supply chains that can match the pace of their business, in a way that is automated, predictable, customised, and speedy!

Now, looking ahead as businesses explore ways to plan, here are the ways in which they can take care of their end-to-end warehousing, storage facilities, and inventory management to tackle 2024 and fulfil their customers’ wishes.

What will be the upcoming warehousing trends in 2024?

Automation: In recent years, automation has transformed the warehousing industry by revolutionising operations and redefining how goods are handled, stored, and distributed. The most used automation technologies that will still take centre stage in 2024 will include Autonomous Mobile Robots (AMRs) to manage automated fulfilment activities and enhance the efficiency of order picking. Autonomous robotic arms will be increasingly used for example to unload containers, minimising workplace injuries connected to depalletisation and support with repetitive tasks. These smart machines can empower businesses by efficiently moving products throughout the distribution centre and packing orders with precision and speed by using advanced localisation algorithms, computer or machine vision and digital interfaces with existing systems. In the rapidly evolving omnichannel landscape, speed will be paramount, and integrating multiple automation technologies in a fast way could present itself as challenging for companies. However, when executed right, warehouse automation will yield substantial long-term rewards and will be essential to address the escalating demands of e-commerce, continuing to boost the deployment and use of robotic and autonomous solutions throughout the next year (and beyond).

Stock merging: 2024 will see more businesses asking warehouses to structure themselves to allow for businesses to keep their products in one stock. While today businesses usually ask warehouses to keep the stock for physical shops separated (at times in different buildings) from the online shopping one, “the trend now seems to be to merge stocks, allowing brands to pull orders and returns from the same stockpile servicing all the different ways in which they manage their omnichannel offering” says Charlotte Petersen, Global Head of Business Product Warehousing at Maersk. This trend, giving brands flexibility, can also be helpful in the management of buffer stock (the extra amount stored just in case orders exceed predicted amounts) which in turn supports the reduction of extra production, impacting the environment.

Visibility: Has it been packed? Has it been shipped? Today, the amount of information a brand needs to provide to its end-consumer is augmented, as people get more experienced in ordering online and they also expect more transparency on their orders. 2024 will see visibility being offered as a “need to have” and not a “nice to have”. This information will be necessary for warehouses to gather and distribute to their partners, also on product returns, reducing the number of calls to customer service which can be of help to both consumers and businesses.

Sustainability: As most businesses are currently focused on creating strategies to lower the environmental impact of their facilities, they will lean more on their integrated logistics service providers to reduce Scope 3 carbon emissions from warehousing operations. This is done by improving building new warehousing infrastructure using sustainable materials and servicing it with sustainable energy sources. Next year, we will see integrated logistics service providers making increased use of emissions visibility tools to help reduce GHG emissions within supply chains. These tools are already in use by fourth-party logistics (4PL) providers to overall increase the visibility of logistics but will be directed as well to have a better view of emissions. This would be a great asset for businesses that have set ambitious decarbonisation targets which can be achieved via continuous improvement. Customers are actively embracing circular economy principles to minimise waste. Improving Circularity with the help of reusable pallets, and disposable and/or reusable packaging can drastically help reduce carbon footprint within a warehouse. So far recyclability has been pursued by LSPs at the behest of customer requests but going forward waste management will become an important criterion for customers to ;.

Data optimisation: “In the dynamic world of warehousing, digitalisation plays a crucial role as the enabler of automation and speed, for future growth” confirms Nitesh Mandal, Global Head of Growth, Strategy and Solution Design for Fulfilment at Maersk. 2024 will see more businesses adapt to digital processes and modern warehousing operating systems. The upcoming advancements will include optimisation platforms that allow for simulations of both existing and potential environments to enhance business operations. A prime example of these is the Internet of Things (IoT) devices mounted on various pieces of machinery as well as other artificial intelligence (AI) operated tools that through the use of data, will enable forklift operators to work safely, by providing real-time safety alerts (e.g.: if people are in the path or when forklifts are in no machine zones). Data-led digitalisation will also enable equipment such as Automated Guided Vehicles (AGVs), conveyor systems, and robotic pickers to speed up precision and movements. The result will be a seamless flow of goods from arrival to shipment, minimising the risk of human error, and significantly increasing the overall productivity and capacity of distribution centres. Finally, data-driven decision-making, using analytics and predictive maintenance for machinery and equipment, is expected to increase in 2024 for warehouses to reduce downtime.

Restoring and customising: Warehouses that are deemed “old” by today’s standards will be retrofitted to meet the needs of modern logistics e-commerce operations. The new year will also bring a deeper level of industry-specific customisation, based on the needs of targeted markets such as e.g., pharmaceuticals or automotive. This customisation trend will be one that will keep evolving in the years to come.

What is in sight for warehousing?

For businesses worldwide, keeping up with the rapid evolution of technologies is no easy task, and a careful analysis of each option is necessary before committing to large investments. As the economy is not picking up yet, and businesses keep a focus on costs, looking into optimisation makes sense. In order to keep up with faster fulfilment needs, 2024 will see the warehousing world speed up its innovations for quicker supply chain management, particularly focused on automation, better data management, and decarbonisation. On par, this will be done while implementing the latest safety measures and refurbishing older facilities so that brands can keep their integrated logistics flow smooth and resilient for what is to come. And such re-thinking and re-assessing can be done through strategic partnerships with integrated logistics providers that can support a fast flow – powered by innovation and digitalisation - whilst keeping in mind sustainability and safety.

Singapore port Congestion forces MSC to opt for Indian ports for Transhipment operations

Congestion-hit Singapore force Mediterranean Shipping Company to rely on Indian ports for transhipment

Container terminals at India’s eastern and southern ports such as Visakhapatnam and Kamarajar are reaping the benefits

 Mediterranean Shipping Company (MSC), the world’s largest container carrier, has increasingly started using Indian ports such as Kamarajar and Visakhapatnam for its transhipment operations as congestion in Singapore force some containers lines to omit calls at the world’s second busiest container port.

“MSC is dropping containers in terminals at India’s eastern and southern ports for transhipment. It’s huge,” said a shipping industry executive.

For instance, the Visakha Container Terminal Pvt Ltd, run by J M Baxi Ports & Logistics Ltd, handled some 70,000 twenty-foot equivalent units (TEUs) in May for the first time.

“This is mainly due to transhipment (because it is counted twice - you discharge and load back the same container). MSC is not getting space/berths in Singapore and Colombo ports (two big transhipment hubs in the region). So, they are bringing bigger ships to Indian ports and dropping their boxes; wherever they have space in Indian ports they are putting the boxes, and they will get smaller vessels to take the containers out to final destinations,” the industry executive said.

This has helped boost volumes at the container terminal run by Adani Ports and Special Economic Zone Ltd (APSEZ) at Kamarajar port, where a unit of MSC has recently acquired a 49 percent stake. As a result, the Kamarajar container terminal is almost full.

APSEZ’s flagship port at Mundra is also gaining from the congestion in Singapore.

On May 26, Mundra docked ‘MSC Anna’, the largest container ship yet to call an Indian port. The vessel having a length of 399.98 metres (roughly the size of four football fields) can carry 19,200 TEUs. During its visit, the ship loaded and unloaded 12,500 TEUs.

Last week, the international container transhipment terminal at Vallarpadam run by Dubai’s DP World at Cochin Port, berthed the 15,934 TEU capacity ‘MSC Mara’, the largest container ship to dock at the facility.

Port congestion has returned to haunt the container markets, with Singapore becoming the latest chokepoint, shipping consultancy Linerlytica said.

“Berthing delays at the world’s second largest container port of up to 7 days with the total capacity waiting to berth rising to 4,50,000 twenty-foot equivalent units (TEUs) in recent days. The severe congestion has forced some carriers to omit their planned Singapore port calls, which will exacerbate the problem at downstream ports that will have to handle additional volumes. The delays have also resulted in vessel bunching, which is causing spillover congestion and schedule disruptions at downstream ports,” Linerlytica said.

“Indian ports would also get jammed. Already terminals are seeing high inventory levels of laden units,” said an executive with one of the world’s top container shipping companies.

The congestion at Singapore port is chiefly a fallout of ships diverting via the longer Cape of Good Hope route (instead of the shorter Suez Canal passage) to help avoid attacks by Iran-backed Houthi militants in the Red Sea since October last year.

While the volumes have started seeing a small dip since April at some of the container terminals in India, transhipment by MSC is coming to the rescue, the industry executive mentioned earlier said.

Singapore is a transhipment port (with very little local cargo) and a berthing delay of 6-7 days for a ship on the East West trade plying from US/Europe to the Far East, will have a “cascading” effect.

“Instead of keeping the vessels waiting for a week to ten days in Singapore, some lines such as MSC are preferring to drop the boxes in Indian ports which have space for bigger vessels and take the containers out on smaller ships to final destinations,” he said.

The congestion in Singapore has a significant impact on the reliability of Asia-Europe container services, he added.

The congestion will also likely exert upward pressure on rates ahead of the hikes planned by lines in June as the busy season for container shipping starts in July.