Warehouse and logistics workers using technology


Part 2: Logistics Forecasting: Key Challenges

Discover the key logistics forecasting issues, challenges, and risks that businesses face as they balance supply, demand, and capacity throughout the supply chain.

This post is part of our series on logistics forecasting and demand planning in the supply chain. Visit our introduction page for an overview of what we're covering and links to each part of our research.

Key takeaways


  • Effective logistics forecasting requires addressing challenges in marketplace dynamics, technology integration, and supply chain network complexities
  • Advanced data analytics and integrated systems are crucial for improving forecast accuracy and supply chain visibility
  • Adapting to eCommerce and omnichannel distribution demands new approaches to logistics forecasting and inventory management
  • Building resilience against disruptive events and improving coordination among supply chain partners are essential for reliable forecasting

Logistics forecasting challenges can be broken down into three main areas

Accurately balancing supply and demand management, optimizing inventory levels, and forecasting future needs is challenging. Multiple internal and external factors impact every part of the supply chain—understanding and mitigating these risks boosts the accuracy, reliability, and timeliness of logistics forecasting.


Broadly speaking, we can divide these challenges into three main areas:


  • Marketplace challenges
  • Technology and data challenges
  • Supply chain network challenges


Marketplace challenges for logistics forecasting

Marketplace challenges are driven by changes in demand for goods, from individual product lines through to entire product niches. Changing consumer behaviors, seasonal and other trends, and sales and marketing activities all influence demand and logistics forecasting.


  • Successful marketing promotions drive consumer awareness, resulting in the desire for particular products that must be met through increasing the supply of those goods
  • Developing and launching new product lines can result in unpredictable demand due to a lack of historic data
  • Changing consumer preferences and needs leads to different buying patterns that must be identified early and planned for
  • Moving to e-Commerce and omnichannel distribution introduces many new factors unique to those channels
  • Seasonal and other external trends influence supply and demand cycles that can generally be predicted with reasonable accuracy
Warehouse shelving and products

Technology challenges for logistics forecasting

Technology challenges are driven by the systems and information that create, manage, and transfer data throughout the supply chain system. Fragmented, disparate software, difficulties with integration, a lack of visibility, and data availability all contribute to overly complex and unpredictable forecasting.


  • Continuing use of legacy systems and siloing data creates errors, bottlenecks, and delays in integrating, sharing, and acting on vital supply chain information
  • Inaccurate stock monitoring and a lack of visibility into inventory levels results in under-ordering or over-ordering and carrying too few or too many of a particular SKU
  • Unavailable, inconsistent, or unreliable historical sales data increases the margin of error when forecasting future demand and inventory levels
  • Poor audit processes lead to unreliable trends and forecasts when amalgamating, analyzing, and understanding historic data



Supply chain network challenges for logistics forecasting

Supply chain network challenges are driven by the external, unpredictable factors that impact on every supply chain. From “black swan” events like the COVID-19 pandemic or a Suez Canal blockage, to everyday delays and bottlenecks between supply chain partners. These network issues stack up to result in erroneous forecasts.


  • Black swan events disrupt the speed and flow of orders and products through the supply chain, throwing out logistics forecasts and delaying stock arrivals
  • Limited supplier and manufacturer contingency planning results in delays and issues from supply chain partners that affects order fulfillment and the timely production, transport, and availability of products
  • Disruptive events have a complex, compounded, and increased impact upstream and downstream in the supply chain that all partners need to react to
  • Large variabilities in supplier, manufacturing, and transportation lead times result in misunderstanding and added complexity when forecasting how quickly orders will be fulfilled and products will be available
  • Lack of central data control and coordination creates difficulties sharing and analyzing data between third parties and intermediaries


Taking account of these challenges allows us to build more robust logistics forecasting models that can react to risks and understand the likelihood and impact on inventory levels.


Read the previous post in our series: Introducing Supply Chain Forecasting or the next post in our series: Optimal strategies for logistics forecasting.

Frequently asked questions about the challenges with logistics forecasting

To improve forecasting accuracy, focus on integrating data from multiple sources, leveraging advanced analytics tools, and maintaining close communication with supply chain partners. Consider working with a 3PL provider like GEODIS that offers comprehensive forecasting solutions.

Technology is crucial in addressing forecasting challenges. It enables real-time visibility, data integration, and advanced analytics. Implementing a robust IT infrastructure and partnering with tech-savvy logistics providers can significantly enhance your forecasting capabilities.

Preparing for disruptions involves developing contingency plans, diversifying your supplier base, and implementing risk management strategies. Working with an experienced 3PL partner can help you build resilience into your supply chain and improve your ability to respond to unexpected events.

Integrated logistics services provide a holistic view of your supply chain, enabling more accurate forecasting. They facilitate better coordination between different functions, improve data sharing, and allow for more responsive inventory management across your entire network.

How GEODIS can help

GEODIS offers cutting-edge solutions to address your most complex logistics forecasting challenges. With our global expertise, advanced technology, and comprehensive services, we can help you optimize your supply chain and stay ahead of market shifts. Contact us now to learn how we can transform your logistics operations.


Get in touch with GEODIS

Paul Maplesden

Paul Maplesden

Lead Content Strategist

Paul deeply researches logistics and supply chain topics to create helpful, informative content for our US audience. Read Paul's work in the GEODIS blog, our in-depth GEODIS Insights reports, and our case studies and white papers.