WHAT IS LOGISTICS AND SUPPLY CHAIN

Logistics and supply chain are two critical areas of business that require meticulous planning and coordination to guarantee products are delivered on time and in the correct amounts to customers.

A corporation must have a good awareness of its own inventory as well as the inventories of its suppliers in order to maintain a seamless flow of products. Inventory management systems can assist organizations in tracking the state of their inventory.

The Impact of E-Commerce Growth on Logistics

The rise of e-commerce and the digital marketplace phenomena, sometimes known as “The Amazon Effect” has altered the makeup of consumer purchasing behaviour and expectations, as consumers now anticipate rapid, free shipping and competitive prices. This rigorous delivery schedule puts established logistics and supply chain models to the test, and businesses are being pushed to change their tactics in order to provide the reduced and on-demand delivery service that customers now expect.

E-commerce is consuming a growing portion of the retail market.

In 2018, e-commerce accounted for 14.3 percent of overall retail sales, up 15 percent from the previous year. E-commerce sales are predicted to account for 17.5 percent of worldwide retail sales by 2021. The transportation and logistics industries will almost certainly be impacted by this exponential growth and demand, as they must prepare for increased volume and delivery expectations.

Consumer expectations

Consumers have become increasingly accustomed to incredibly fast delivery, and as more shops offer fast, free shipping, logistics providers will need to adjust to the ever-increasing shipping pressures that coincide with evolving consumer expectations and desires.

As a result, the supply chain dynamics are fundamentally evolving as enterprises complement traditional lengthy delivery with just-in-time (JIT) distribution and vendors convert from many warehouses to single warehouse locations to satisfy local needs. This frequently necessitates a change in fleet composition and investment in smaller trucks and vans capable of providing the shorter, more frequent runs required to support an expansion in last-mile delivery.

Understanding Financial Solutions

As businesses want to upgrade to smaller trucks that can handle more frequent deliveries, it’s critical to work with a financial partner who has substantial asset-class and security experience to help evaluate viable financing alternatives.

Because of the increased frequency of short-duration journeys, many businesses may require shorter lease or lenders and banks choices to account for increased vehicle wear and take advantage of current models. Tax-oriented leases, in addition to offering low-cost and short-term choices, allow the lessor to claim the tax ownership rights via depreciation deductions and pass those benefits on to the lessee in the form of decreased payments, resulting in the lowest feasible rate.

Import tariffs and rates

The UAE has adopted a GCC standard tariff in general, with customs charges on most goods set at 5% of CIF value. Carbonated and sweetened beverages are taxed 50%, while energy drinks, e-cigarettes (tools and liquids used in them), and tobacco goods are taxed 100%. Pharmaceuticals and agro items, for example, are free from customs taxes. Please see the Consolidated Customs Tariff for further information on duties.

Building logistics capacity and increasing connectivity

The port of Abu Dhabi has increased in prominence as the UAE’s marine commercial hub, handling general and bulk cargo, containers, and rising roll-on/roll-off traffic. The new cargo facility at Khalifa Port is attracting a lot of attention. With a 500 million dirham investment, Abu Dhabi Ports wants to develop its infrastructure, including deeper docks and greater storage facilities, in Fujairah, another marine hub in the UAE.

The UAE is home to a number of well-known ship owners, as well as branches of international companies. The offshore sector in the United Arab Emirates is operating better than in other regions of the world, with vessel utilization rates in the region above the global average. The UAE continues to be home to a few offshore shipowners.

Local Shipping Industry

Embracing a free market and open trade policies, the United Arab Emirates (UAE) has grown into the Arab world’s second-largest economy. Between Saudi Arabia and the Persian Gulf, it is located. The UAE’s population of approximately 6 million people has a high per capita income and a strong need for imported items.

Furthermore, royalties and interest collected from ship rentals by International Financial Services Centre units will be tax-free for non-residents. This is likely to create a new financing option for ship purchases.

One Station One Product

The UAE government has continued its efforts and aims to foster the sector’s growth and the UAE’s increasing prominence as a major marine centre.

The effort is expected to boost the local product supply chain’s efficiency. Making each railway station a focal point and display for a local product will assist to increase demand.

Supply Chain Issues to Persist into 2023

The global supply chain struggled considerably in the second half of 2021. Pandemics, labour shortages, cyberattacks, increased commodity consumer demand, and other global events all led to record bottlenecks and backlogs.

Despite attempts by the public and private sectors to resolve the problem, supply chain issues, according to the Institute of Electrical and Electronics Engineers (IEEFA), are expected to endure until 2023. In the

United States, more than 70% of smartphone shops reported shortages in the consumer electronics market. The situation was even worse in the automobile industry.

Blockchain Has Enhanced Traceability And Transparency

Logistics organisations are tough to manage and control because they entail complex activities involving manufacturers, suppliers, transportation providers, and retailers. The adoption of blockchain technology for supply chain identification and control will increase commodity traceability and transparency as they travel through the supply chain considerably.

The majority of supply chains are constructed on time-consuming, paper-based processes that are opaque and prone to error. Businesses, on the other hand, can use blockchain to create smarter, more secure supply chains by following a clear and solid trail that includes real-time updates and information validation.

Automation For Improved Logistics Management

Supply chain automation, according to Coughlin, is a vital component in simplifying procedures. Shorter supply chains can be aided by local high-tech industries. Logistics technology, on the other hand, has the potential to be beneficial. Companies are experimenting with platooned trucks, in which one driver is in command of a large number of vehicles following behind. Drivers may be able to relax while driving thanks to advanced driver-assist systems (ADAS). “Similarly, more automated material handling and delivery, especially highly automated shipping, may decrease the effect of calamities like pandemics,” Coughlin said.

Cybersecurity Efforts To Mitigate Supply Chain Attacks

In the recent year, many large-scale cyberattacks on critical infrastructure have occurred, causing severe supply chain disruption. To mitigate these risks, businesses must make the necessary modifications to their cybersecurity practices. IoT technology might, for example, be used to track product movement and condition across the supply chain. They extend the danger landscape at the same time. “Cybersecurity prevents intruders from obtaining control of such systems, thus nullifying all of their benefits,” Simplicio explained.

Supply Chains Will Continue To Evolve

The epidemic highlighted a number of problems in the supply chain, as well as the need for modernisation. Before the distribution system can be entirely restored, there seems to be a long way to go.

According to the author, “I anticipate we will see increased automation in material handling and production, with Machine learning becoming utilised to oversee development and distribution via blockchain authentication technology.” “When certain output in fully automated industries enters the market, I foresee some supply chain contraction,” Coughlin added.

Supply chain predictions for 2023

In warehouse operations, 75% of big firms will deploy intralogistics smart robots by 2026. Apart from labour shortages, quickly rising labour rates, and the lengthy implications of COVID-19, most firms will increase their investments in cyber-physical systems, especially intralogistics smart robots for usage in distribution centres. These robots are intended to aid human operators by automating some tasks. Traditional automation solutions, such as mechanical sortation or automated machines, take longer and cost more money to deploy.

Drones, bots, and connected autos all rely on edge ecosystems for self-driving network tools, devices, and apps. In addition to typical centralised supply chain solutions, edge ecosystems will be enabled through Wi-Fi, Bluetooth, and 5G data communications services. Many supply chains are already using edge computing to make decisions, and the next three years will be devoted to identifying new use cases for linked, automated, and autonomous networks of edge possibilities.

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