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Despite 20 years since the democratisation of the Internet, many sectors continue to carry out daily operations using “low-tech” solutions and this is particularly evident in the logistics industry. In the market for delivering local and regional goods, communication is largely done through email and telephone correspondence and in some cases even faxes. Once you consider the vast network of actors involved in a typical supply chain ecosystem combined with the fast-rising standards for operational execution, you can begin to imagine how fast and efficient communication becomes a critical driver for logistics performance.
Fortunately, many segments of the logistics space are now undergoing innovation with a new wave of startups shaping a modern supply chain marketplace that embraces game-changing technology. Below are some of the breakthrough trends we are already seeing gain traction in transport and logistics for 2019.
Efficient Matching and Routing
The wide system of stakeholders involved in logistics means matching and routing deliveries can be a highly manual and hyper-fragmented process. Now, companies are actively turning to intelligent algorithms to automate the process of matching shipments with a capacity to maximise time and money. While manual matching is limited in the number of shipments that can be arranged, automated matching gets even better and faster with the more shipments executed (i.e., easier to find a relevant match and optimise routes) these matching and routing algorithms are also dramatically lowering the costs incurred from ‘empty miles’, the distances travelled by drivers with empty trailers, saving fuel costs lowering air pollution.
Up until now, logistics and manufacturing have been considered less digitally mature than other sectors, marked by rigid legacy systems such as payments handled on paper, often causing long delays for carriers to receive cash.
The introduction of modern online payment systems is one example of how digitisation is now quickly facilitating transactions between shippers and carriers, not only improving customer satisfaction and trust but also driving efficiency and lowering costs by consolidating all payments into one, efficient platform. As the logistics sector becomes more digitally mature, business processes become simplified, lowering risk and driving revenue with improved efficiency. The increasing digitisation of the supply chain.
Blockchain tech is expected to be increasingly leveraged by stakeholders across logistics and transport to deliver more transparency and accountability in managing and tracking documentation and assets across the supply chain process. Leveraging blockchain distributed ledger technology can not only improve service levels by providing end-to-end visibility of the status of every shipment but can also improve on-time rates and allow for more proactive incident management.
New applications are already introducing smart contracts using blockchain technology. When a shipment order is made, a smart contract can be initiated and upon delivery and quickly executed if all validations and intermediate points are verified.
Informed data-driven decisions are fast becoming the norm across logistics for 2019 for stakeholders across the supply chain ecosystem. The data accumulated from daily operations can best inform companies of upcoming peak demands or fluctuations and more importantly, provide insights into supply and demand forecasts, route optimisation, fuel consumption and turnaround times, each of which can strengthen competitive advantage within the marketplace of third-party logistics. Shipment data can also be aggregated at the warehouse level using loading and unloading times for a seamless flow of inventory control and shipping management.
Automation and IoT
Automation and the Internet of Things means that the process complexity often found across certain points of logistics operations can now be streamlined for smoother, more efficient operations. Emerging software and hardware such as sensor and asset tagging are shaping more reliable, connected environments for more cost-effective and tighter asset control. Inventory can be better managed in warehouses and cargo better controlled during transit. IoT based systems can also help for predictive maintenance in logistics and real-time insights into performance, for example through the application of visual and acoustic sensors on rails and tracks.
The ability to remain agile and adapt fast to seasonal demands has also reinforced the importance of elasticity within the supply chain. Being able to shrink or expand capacity on demand in accordance to peak periods whilst maintaining excellence in customer service is critical. To remain agile but lean, many companies now partner with third and fourth party logistics (3PL and 4PL) to help leverage the resources and expertise of others. The global third-party logistics market is predicted to grow at around five percent CAGR during 2016 to 2024, with the market expected to attain a size of about USD 1,054 billion by 2024.
With the advent of new age fulfilment centres such as those of Amazon and Zalando, the integration of robotics into sorting, picking and shipping products and cargo will continue to transform warehousing processes in Logistics. Rather than the automation of robotics replacing the workforce however, increased efforts are being made to integrate robotics in a nature that is supportive to the existing workforce as opposed to an innovation replacing it. While in 2010 US Venture Capitalists invested $30Million into robotics startups, by 2013 this had already increased to investments totalling $170Million.
Smart Road Technology
While still in the earlier stages of research, startups based in the US are already emerging with goals to bring technological innovations literally on to roads and highways themselves. The integration of solar panels into hundreds of miles of asphalt surfaces for example, could have the ability to generate energy, melt snow, reroute traffic and even possibly direct autonomous vehicles. Smart highways such as these could provide energy to power nearby streets and lights as well as quickly detecting irregular traffic activities or disturbances to flag hazards to oncoming motorists. This could yield major potential for a smoother flow of traffic and routing to bring even more efficiency into future logistics and road transport operations.
This is a guest blog by Salvatore Scialdone, the Global Head of Supply at Ontruck, where he leads the development of the global carriers’ strategy and drives its execution across countries and functional teams. In his previous roles at Ontruck, he launched the UK business and then covered the role of UK Head of Operations.
Ontruck was founded to develop technologies to make the road freight experience a smooth and efficient one for both truckers and companies who send shipments. They do this by drastically reducing the amount of empty kilometers travelled by goods vehicles, therefore optimising their use and utilisation.
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