Logistics can be traced all the way back to the Greek and Roman empires, but it’s undergone several major transformations as new technologies provide opportunities to more efficiently manage the movement and storage of goods. In the digital transformation age, logistics is once again undergoing a major shift. Logistics technologies such as robotic warehouse systems make automation a reality, while drones improve last-mile delivery capabilities and better tracking with tools like RFID tags improve visibility throughout the supply chain.
These technologies also contribute to a rise in big data and analytics in the logistics field. RFID tags and robotic warehouse systems generate and transmit data that, when combined with other data sources, allow companies to optimize the supply chain and make better predictions and forecasts to improve efficiency and boost the bottom line.
To learn more about the biggest trends shaping the logistics industry today, we reached out to a panel of logistics professionals and asked them to answer this question:
“What are the biggest trends in logistics technology?”
Meet Our Panel of Logistics Pros:
Read on to learn what our experts had to say about the most important logistics technology trends impacting the industry today.
Brian is the Director of Customer Success at Yembo.
“Artificial intelligence is going to have a large impact on logistics in 2019…”
Supply chain management through AI will continue to refine. AI in logistics customer support (through predictive transit times) will reach more consumers this year.
Advancements in computer vision are behind self driving vehicles and while self driving trucks may be 5 to 10 years off from mainstream adoption, there will be other tangible impacts.
AI will be able to survey an area or room and create an accurate inventory in seconds, including weights and volumes, and determine damage on items.
At Beeproger, Marc focuses on transferring his enthusiasm for digitization and believes in optimizing company processes through digitization. He explores the trends in Artificial Intelligence and Internet of Things but also realizes that these technologies will never reach their full potential when the basic prerequisite of collecting data hasn’t been met.
“The logistics industry is one of the biggest industries that will profit most from the digital revolution in 2019…”
From quicker deliveries to more sustainable ways of transportation, harmonizing big data and automation efforts will ensure exponential growth in the industry. To be more specific, the harmonization will establish a basis on which artificial intelligence finally gets a real chance. Although there is an ample optimism regarding the benefits the logistics industry will enjoy in the coming years, I am convinced that this will only be possible when logistic managers start gathering and understanding the data needed to innovate. Think of (even) more efficient routes and the ability to anticipate sales by taking data points such as weather patterns into consideration. In 2019, gathering unique data will be more prominent in the brains of logistic companies. Data driven decision making will not be a buzzword anymore, but something that happens on a weekly (if not daily) basis. The logistics industry will realize the potential they have in their own companies and are going to exploit it. For us consumers, this means we will get our packages quicker. And we might be happy to pay for it.
Jeff Stollman is a principal consultant and supply-chain thought leader at RMTM. He has developed patent pending blockchain solutions that include one for supply-chain integrity. He also works with a variety of labeling and marketing technologies to support product authentication.
“The biggest trend in logistics technology is…”
The development of blockchain-based track-and-trace solutions for supply chain integrity. While only a few of these are in current production, the value provided is compelling. These solutions allow for the rapid identification of counterfeit and diluted products. But they have potential beyond this. They can also be used to track the provenance of adulterated products to identify the source. And they can be used to track the quality and certifications of upstream suppliers including fair labor practices, work-site health and safety compliance and environmental compliance to help maintain the reputation of the brand.
There are two big hurdles to be overcome for many of these blockchain-based supply-chain-integrity solutions. The first is linking physical goods to the digital records stored on the blockchain. Serialization is often required. And serialization is a complex process. Additionally, it may be necessary to utilize tamper-proof and counterfeit-resistant labeling/marking technology in order to distinguish authentic products from counterfeits.
The second hurdle is blockchain governance. To be effective, these solutions require adoption by all stakeholders. If the solution does not treat all members of the supply-chain fairly, adoption will not occur. We can see this in the IBM/Maersk trade finance solution. Because IBM and Maersk control the IP for this solution, other major shippers have been reluctant to join. But establishing fair rules for both the initial solution as well as for agreeing on the changes that are certain to occur going forward can be a big task in large industry with diverse stakeholders whose interests do not always align.
Dr. Scott Newton
Dr. Scott Newton is the Vice President of Care Model Solutions at TeleTracking Technologies. He has more than 30 years of experience in healthcare — working as an EMT, a nurse, an educator and a patient flow
command center leader — he is also a trusted adviser and thought leader.
“Two of the biggest trends in logistics technology right now are…”
The use of mobile apps and artificial intelligence.
Mobile apps: Pulling these reports several times a day can be tedious and leads to performance not being monitored in real-time. As a result, leaders are unaware of changing conditions that impact capacity and access. Mobile apps can generate reports and monitor performance metrics. They can provide alerts and notifications of key information, driving action for stakeholders of throughput solutions.
Artificial intelligence: For years, artificial intelligence has been slowly making its way into healthcare. There are now computer applications that analyze symptoms at lightning speed, providing a prioritized list of probable ailments that help doctors make patient diagnoses. AI-enabled programs also help clinicians read diagnostic images and in some cases analyze those images for the doctor. Yet another role for AI involves the automation of processes that make care delivery possible.
After graduating from the University of Oxford, Hunter Yaw worked as a project manager for several companies, including as the Head of Special Projects, Fuel Logistics for the Sochi 2014 Organizing committee. Hunter has worked at Loadsmart for one and a half years now as VP or Product Management.
“Tightening capacity requires a more ‘connected’ broker…”
While freight growth is forecast to slow in 2019, truckload capacity will remain tight, largely driven by a tight labor market, new regulations and other factors. This shortage will only continue to squeeze service levels, in addition to impacting rates. For shippers with tightly orchestrated supply chains this is a real issue — a late delivery can literally shut down a factory.
What we’re beginning to see in response is the emergence of the ‘digital broker.’ Brokers who are not only connected in the sense of having access to capacity, but ones who seamlessly integrate into a shipper’s processes and TMS. By deeply integrating into a shipper’s systems and processes, with services like instant rates and one click booking, the time required to cover a given load can be dramatically reduced. This allows for more lead time on any given shipment and reduces the probability of a service issue.
Dr Julian Stephens
Dr Julian Stephens has a PhD in Physics from Cambridge University. He then spent 20 years researching real-time logistics optimization algorithms at the industry-leading software house MJC2.
“The biggest trend in logistics technology is…”
Synchromodality, which means dynamically switching transport modes in response to real-time events along the supply chain, using the greener and cheaper options such as barge and rail when possible, but with the option to intelligently switch back to truck to cope with disruptions. This de-risks and de-stresses the supply chain and reduces costs for the transport operator and their customer.
A key requirement is very fast, powerful automated scheduling algorithms which can monitor the supply chain and automatically modify the route for each shipment to choose the best option. This technology is being developed in the SYNCHRO-NET project and trialed by DHL, Kuehne+Nagel and COSCO in their networks. SYNCHRO-NET is expected to massively reduce greenhouse gas emissions in the supply chain and reduce congestion on roads and around busy ports and terminals.
Tarek Alaruri is the COO and Co-Founder of Fairmarkit.
“The biggest trend is the digitalization of live tracking for shipments…”
Alex Bekker is the Head of Data Analytics Department at ScienceSoft.
“Data science can bring great gains for…”
Logistics efforts of retailers and manufacturers. Companies can accurately forecast demand, timely order raw materials and manage inventory more efficiently. Big data analytics is promising too: it enables predictive maintenance for better fleet management.
Abbas Dhilawala is the CTO of Galen Data. He has over 13 years of experience developing enterprise grade software for the medical device industry. He is well versed with technology and industry standards regulating security and privacy of data. His expertise lies in programming, cloud, cyber security, data storage and regulated medical device software.
“The growing developments in the Internet of Things (IoT) have many exciting implications for…”
The future of healthcare and is one of the biggest trends in logistics technology. Connected technology is entering our homes and workplaces, so it follows that healthcare may benefit from its data-processing abilities. Benefits include more timely decision-making and hopefully the overall goal – better patient outcomes.
Here are some current use cases for IoT in healthcare:
Remote healthcare and monitoring. Before the introduction of connectivity and IoT in healthcare, it’s fair to say that a lot less monitoring of patients was going on outside of a hospital setting – it just wasn’t possible. So if you were admitted to the hospital, you’d be very closely monitored while there, but once discharged, no one would know what was happening with you outside of checkups.
The problem with this is that a lot of issues can develop once a patient has been discharged, and often these are things that could be prevented or minimized if doctors had early access to outpatient data.
IoT has a vital role to play in remote healthcare and monitoring. Data can be captured via sensors in medical devices and shared in real time with physicians. Serious conditions can be prevented from developing, while a chronic disease can be monitored for progress. For example, key indicators such as blood pressure, glucose levels and weight can be monitored remotely. There are a number of new sensors that have been built to monitor other potential early indicators of problems. For example, fall alerts for senior citizens or monitoring of facial expressions to pick up signs of emotional distress in patients. These indicators are important for physicians to understand early on if there may be any escalation in symptoms of a chronic disease.
Better drug management. There are three ways in which IoT can help with better drug management:
- The first one is to understand how much medication was administered. For example, if you think about administering an inhaler, especially to a young child, it is often difficult to gauge how much medication has been given. Sensors in the inhaler can help to monitor this accurately, so physicians can then also build a picture of how much medication is used and whether the amount or medication as a whole is effective.
- IoT can help to measure whether medication is being absorbed, or where it is being absorbed in the body. For example, there are drugs with sensors onboard that monitor medication as it is given.
- The third way IoT helps is that physicians are able monitor whether patients are adhering to recommended medication regimen or dosages. The patient themselves could be reminded with an alert that they need to take their medication. In some cases (perhaps where a patient is in particular need of close monitoring), perhaps an alert could even be sent to a designated family member if they have not taken their medication according to their recommended schedule.
Vaibhav Shah is a CEO of Techuz, an IT Firm based in India and USA. He is very passionate about writing the content on Technology and Business i.e AI, the blockchain, AR/VR , digital transformation and how new technology will affect every industry.
“Blockchain is be the biggest trends in logistics technology…”
As blockchain is a highly transparent and efficient technology. It can positively impact the supply chain and its management, from point of origin to the place of distribution.
Blockchain covers all the essential aspects of the supply chain that are needed for reliability, trust and integrity. With blockchain implementation, no participant will have a clash in the supply chain as everyone will have the same copy of every transaction.
Without having a central entity, the businesses, partners and suppliers can handle all the complicated consultations needed when any information or asset is handed over for supply. All the data and transactions are synchronized across the network. All the participants in the blockchain confirm the work and tasks of others. This enables a high amount of cross-checking and redundancy and this is also the reason why cryptocurrencies like Bitcoin and Ethereum are so secure and reliable.
Matthew Stammers leads Marketing at Taulia, helping the company develop a compelling narrative centered on technology-led working capital optimization which flows through everything the company does from product strategy, through communications and sales to customer success.
“One major trend is the line between logistics and technology…”
Solutions are emerging which make use of artificial intelligence to monitor early payment behavior across large numbers of transactions. This can lead to deep analysis of companies’ supplier payment files, which can, in turn, provide an insight into opportunities to reduce finance costs across your supply chain.
Christoph Seitz is the Co-Owner of CFR Rinkens, a global leader in the shipping of commercial cargo, specializing in the containerized shipping of motor vehicles. They are heavily involved in logistics on a daily basis.
“Big data will have a major impact on logistics in the years ahead because…”
It will create safer supply chains around the world. Those who stand to reap the benefits of big data the most are small to midsize importers and exporters. They don’t really have the resources to build a safe supply chain, but they can count on larger freight businesses who offer big data capabilities to their customers. This will give them the opportunity to communicate more efficiently with suppliers all over the world as well as automate certain responsibilities in order to reduce human error.
Chris Wiegand is the CEO & Co-Founder of Jibestream. He started the company with a vision to change the way people engage with indoor spaces by fusing business data with maps. Chris has led Jibestream’s incredible growth from an idea to a globally recognized leader in the indoor mapping world.
“The biggest trend we’re seeing in logistics technology is…”
A move to embrace location-aware Industrial Internet of Things (IIoT) technology. As the IIoT continues to evolve, the manufacturing and logistics industry will benefit from the ability to produce real-time analytics and data visualizations. Complex indoor spaces, such as industrial and manufacturing facilities, are looking at how to integrate existing business data with location awareness to create real-time location intelligence. Indoor positioning technology is now becoming more precise, making it possible to accurately track both fixed and mobile assets indoors and when combined with digital maps, are granted visual access to this data in the context of a map. As these technologies continue to evolve, these applications have become far more critical to driving operational efficiencies in logistics processes.
This digital transformation will drive improvements for work order management and shrinkage reduction due to effective asset tracking and other IIoT use cases enabled by location-aware technologies. In the future, we expect to see an increased adoption of AI and machine learning in the context of predictive maintenance and drone operation in the logistics space. This relies heavily on a solid indoor mapping and positioning foundation. One with an open architecture to enable third-party industry integrations thereby increasing the reach, flexibility and value.
Shaun Savage is the CEO of GoShare. They connect truck and van owners with businesses who need last mile delivery of big box items on demand. Some of GoShare’s customers include Costco, Pier 1 Imports and HomeGoods.
“There are several trends that I have noticed…”
1. Crowdsourcing — Shippers and carriers are leveraging technology through partnerships or in-house development to access vetted networks of approved drivers to deliver faster and more efficiently. Having access to trucks without ownership provides elastic flexibility to add to your driver supply when needed. (This is GoShare’s current model.)
2. APIs — System integrations will continue to be important part of logistics technology. It will be critical for businesses to find simple mechanisms like APIs to connect their systems together in order to provide a better experiences for customers and automation for businesses.
3. Mobile — Mobile devices are part of most people’s everyday lives. Having a responsive design website is a good start, but having highly functional native mobile applications are essential in today’s business environment. There are hundreds if not thousands of transportation mobile apps available today. You can expect to see more apps in the future and expect the existing apps who are successful to become more robust and user friendly.
Robert DeStefano is a senior product marketing manager at Ivanti Supply Chain. He has more than 18 years of experience helping businesses understand the value of mobile technology solutions when it comes to boosting worker productivity and enforcing mobile security.
“Artificial intelligence is all the buzz in supply chain these days…”
And why not? There are a lot of exciting use cases. Still, part of the story is the unexpected implications for the supply chain.
Automation is a natural option for logistics firms to keep pace with demand for faster shipments. And, the change brought on by automation is significant. With regards to talent, for example, the the day-to-day tasks of workers will change. Sure, they adapt, but new skills will come in to play. They’re going to be interacting with computers on a scale that many people only can relate to in sci-fi movies. At the same time, the growing field of study focused on supply chain management will offer opportunity for new hires. These workers will escort this new age of AI through the loading dock. Further, timing is something that the supply chain is always worrying about. It’s about making that quick decision to prioritize an order, so it makes it onto a truck that’s about to go. It’s also about workers having the time to focus on tasks that add more value. Automation can complement the workforce — performing the repetitive, low-skill tasks and freeing up workers to do more high-value activities.
Dhaval Sarvaiya is a co-founder of Intelivita, a Digital Transformation company. He helps enterprises and startups in scaling up.
“Logistics is such a vibrant industry and as it is literally always on the move, it remains technologically challenging…”
At the moment, the industry is undergoing a unique transformation and trends are focused on digital enablement of a transportation company.
Here comes IoT, enabling you to connect the entire supply chain management process. The trend is booming right now, specifically in the Industrial Internet of Things (IIoT). It is now playing a key role in driving the world forward on the roads, on rails, at sea or in the air. IoT devices are making travel safer and performance more efficient.
The big corporations and companies have had ERP systems to manage the moves. They have data all over; a lot of big logistic companies are referring data as new oil. They are going to be the early adopters of IoT and will see a quick ROI. It is time to utilize the data in an efficient manner to analyze and improve performance and customer experience.
With the rapidly evolving trends of IoT, the focus will be on creating unique connected IoT-driven solutions that will empower the logistics industry with higher levels of efficiency in terms of asset utilization. IoT is a powerful change to the logistics industry that grows more sophisticated with each day.
Jeff Neal operates The Critter Depot.
“One trends we’re pursuing is blockchain technology…”
We ship live crickets all across the country. And sometimes that transit is very difficult on the crickets, and can even lead to perished crickets. It would be a huge advantage for us to know at what point these crickets perish. Sometimes it’s temperatures; sometimes it’s handling. And if we knew, we could better prepare our live products so they have a greater chance of success. There are blockchain technologies designing sensors that will track the internal temps, moisture and altitude of packages. If we can have this linked to the cricket, we can determine what is causing them to perish during transit.
David Armendariz is the general manager of the Information Technology practice group for Lucas Group. He has spent his entire 15-year career with the executive search firm since graduating from the University of Houston with a BBA in Marketing and is based in Houston, Texas.
“There are several variables driving the digital transformation in logistics…”
First the ‘Amazon effect.’ Consumers now have raised expectations in the B2C space and that is now affecting the B2B markets as well. Consumers want low cost, high quality delivery at home and now they won’t accept delays or cancellations, either. Logistics is typically a low tech space, so companies are trying to catch up where they can and they are using several tools to do it. Three of the biggest are IoT, AI and data analytics.
IoT gives logistics companies the opportunity to connect all their devices, equipment and tracking tools to one easy to read, manageable dashboard. They can then integrate all areas of the business on small and now large scales to a fully digitized supply chain. Now that they have gathered the data, AI & analytics will give them the ability to make better decisions based on real data not their gut ‘instinct.’ This is also not only about today, but how they operate long term: affecting business models and go to market strategies, thereby improving the experience of the shipper and carrier.
David Mitroff, Ph.D.
David Mitroff, Ph.D. is a business consultant, marketing expert, author and keynote speaker who founded Piedmont Avenue Consulting, Inc., where he advises on leveraging new technology to create brand awareness, strengthen customer loyalty and generate new business leads. He is also a College Instructor in Entrepreneurship and Marketing for the University of California, Berkeley International Diploma Program.
“When it comes to logistics technology the biggest trends that we can expect are…”
The self-driving transportation that will revolutionize our delivery process. Nowadays drivers are limited to 10 hours of driving per day. Imagine a self-driving truck that could deliver as twice as fast as a regular driver. Key players we are looking forward to seeing are Otto, Volvo and Ike’s. This year we can also expect the launch of many drone delivery services. Zipline already delivers medication to areas in Africa that are difficult to access. Amazon has Prime Air for small parcel packages, and the Turkish postal service is looking at launching mail delivery by drone this year.
Benjamin Meskin, CPCU, CLU® , is the owner and lead underwriter of Meslee Insurance Services, Inc., dba Cabrella Shipping Insurance Intelligence. A family business operating since the mid 90s, Meslee Insurance was a pioneer in the industry and assisted in underwriting insurance and forming policy language for the first high value transit insurance programs.
“The future of logistics technology focuses in part on supply chain visibility…”
More importantly, everyone is in pursuit of further automation and integration in order to reduce time, increase efficiency and, most of all, reduce costs. Consumers of today are demanding free shipping; however, what is free to the consumer is a cost to the shipper. Therefore, an investment in technology to help reduce costs will continue to be a focus. To that end, we’ll will see two different trends: business intelligence and machine learning.
Business intelligence is all about having dynamic data to find the best and most cost effective methods for shipments and on logistical activity in general. Actively lowering your shipping risks this year is a possibility thanks to the advancements in data and analytics. That intelligence can be coupled with machine learning. Machine learning focuses on many things including automation and getting shipments to customers as efficiently and inexpensively as possible.
Jeremy Rose is currently running a popular website called CertaHosting that explores the possibilities of web hosting, hardware, and technology.
“It’s become the norm to…”
Send data and documents to and from the cloud, to use e-mail or public messaging services as well as download and transfer data. In short, almost everything has become digitized, and that transformation is unstoppable.
The flow of information is optimized among all participants, and work processes are faster and more transparent at the same time. However, there is a gap between real security and the knowledge of what is really happening with certain data.
Business, therefore, have a need for a digital strategy for dealing with their own data. Users and service providers will, in the future, always have to work to ensure responsible electronic data exchange. Paired with the usage of mobile devices to transfer data, the problem of storing data is certainly a trend and a growing concern.
As Chief Customer Officer for twelve years at One World Direct, Amber expertly and passionately leads growing e-commerce companies to find solutions that help them keep their brand promise to customers while reducing cost-to-serve.
“The biggest trend we are seeing is inventory distribution…”
Clients are becoming much more savvy about strategically placing their goods among multiple warehouses to minimize delivery times. As a result, our tech team has been focused on expanding our distributed order management systems to integrate with more clients and offer more flexibility. Now that Amazon has made 2-day delivery industry standard, everyone wants to keep pace. We’ve offered these capabilities for a while, but we’re seeing a huge increase in demand for them now.
Andrew Hagigeorgiou is the Client Services Manager at Steadfast Solutions, an Australia based IT company. Steadfast Solutions offers their services to a range of clients from several different industries.
“In regards to of the logistics technology trends over the last few years…”
The use of automation and robotics has changed more than any other.
- Like most industries, mobile adoption is on the rise in the logistics industry.
- The availability and use of transportation management systems climbed considerably over the last 12 months.
- With automation and robotics becoming prominent in the industry, Logistics Cybersecurity and Protection Solutions are becoming a top priority.
Alexandra Zelenko is a Marketer and Technical Writer at DDI Development company that provides great web and mobile digital solutions.
“The biggest trends in logistics technology are…”
Data analytics and big data logistics. The use of big data and data analytics in the logistics landscape provides excellent opportunities to make informed data-driven purchase decisions. Companies are now using big data to anticipate busy periods, potential future supply shortage and other insights for making strategic decisions to improve their market positions and offer a significant competitive advantage over other counterparts. What’s more, over 90% of shippers and 3PL firms predict that data-driven decision-making is exceptionally vital to supply chain activities as the big data improves quality and performance by offering effective supply and demand forecast, inventory management, route optimization and efficient labor management, in turn boosting the growth of the global third-party logistics market.
TJ Sangam is the CTO of SupplyPike, a digital supply chain software company, based in Fayetteville, Arkansas. In his current role, he develops and articulates the company’s strategic technical direction and oversees the engineering, design and product teams.
“When people talk about trends in supply chain technology…”
They invariably talk about blockchain. Blockchain’s promise of decentralization and immutability is bound to disrupt how supply chain and business, in general, is done. However, we won’t see it happening in the immediate term because it does not solve any of the current pressing issues faced by supply chain professionals. In the future, we can expect unparalleled visibility and transparency in the supply chain thanks to a decentralized blockchain.
The biggest trend which is currently having an impact on professionals in logistics and the industry as a whole is machine learning. The data heavy nature of the supply chain and logistics industry lends itself to ML, and advances in hardware and algorithms have enabled the processing of bulk data which was previously fragmented into silos. The future of logistics technology begins with the processing of bulk data to drive insights and cost savings. This will allow complex ML systems to predict specific issues in your supply chain and prescribe solutions to resolve those issues.
Charles Marrale is the COO of Exfreight Zeta, an international freight forwarder headquartered in Lake Worth, Florida. Charles has 18+ years of industry experience with specialties in operations management, software and business analysis.
“There are several trends in logistics technology right now…”
Most of the trends are being driven by the need for more efficiencies in moving freight and reducing labor costs which have surged due to a very tight labor market. The Amazon effect of providing a seamless global distribution through a simple and easy to use website has driven all sectors of the transportation market to invest heavily in technology updates that will improve the customers’ interactions with their company and at same time improve efficiencies in the process of moving shipments from A to B. Here are a few snap shots of the leading trends, in my opinion, that are having a real impact on the industry and are a sustainable realistic technology that will eventually go mainstream.
Instant freight pricing for international freight moves
Demand for international freight has increased as global trade has increased over the last few years. More and more companies are becoming brands and outsourcing their manufacturing to small run manufacturers who are shipping small batches on demand. You see a lot of new ideas and companies evolving from kick-starter campaigns and new existing brands experimenting with new products in smaller releases. In addition to those trends, a lot of smaller manufacturers are now selling online to the world through services like Alibaba. This is leading to a lot of inconsistent ad-hoc cargo demands that does not work well in a typical freight forwarder’s environment where quoting is a manual process that cannot sustain low quote-to-booking ratios. A few forwarders have realized the opportunity and have digitized their business and are providing instant global pricing to allow for these manufacturers and brands to instantly price unlimited amounts of opportunities. Digital forwarders leading the way in this new instant pricing market are Exfreight Zeta (our company), Flexport and Freighthub. To complement and aide the freight forwarders in digitizing their business a few SAS companies have started to provide TMS solutions that allow other forwarders to provide instant pricing — Freightos, Freightalia.
On demand spot market pricing
Not to be confused with instant international freight pricing, a small segment of carriers have started to offer on-demand instant pricing which allows the carrier to offer a set block of space on their airplane, truck or vessel at set rates which can instantly be adjusted based on demand and space availability. This was not feasible a few years back but with the advent of transition to instant API pricing in North America, it’s not possible for a carrier to set up on-demand pricing that adjusts to the market conditions.
Air France, KLM and a few others are leading the way here with per-flight pricing in some select markets. Even though it may seem logical to maximize revenue to available space, there are some downsides to the trend. The most glaring being that digital forwarders can easily integrate the per-flight pricing but they cannot control the delays in the first leg of transport from the shipper’s warehouse to the airport. So, inevitably the rates will most likely be used in a manner to plan additional savings for the forwarder only once the freight is on-hand at the airport and not passed onto the shipper in order to avoid any costly booking cancellation fees when a shipment is delayed in transit from shipper’s warehouse to airport.
Truckers like YRC are now starting to offer trucking rates based on local market conditions that change weekly. The service is accessible via their API and will provide a spot quote and a date range for when the shipment must be executed for the rate to apply. This allows YRC to keep their trucks full on backhaul lanes or on lanes where seasonal conditions create a need for more freight. It’s also allowing them to keep unprofitable freight off heavy headhaul lanes. Other carriers like UPS, ESTES and OLD DOMINION are using a similar system but in a slightly different manner. They are focusing on providing ad-hoc rates for volume LTL shipments on select lanes, thereby allowing them to fill backhaul lanes with larger shipments when needed. The upsides for the carriers are huge; however, most shippers only have access to these types of rates through a 3PL or by logging into multiple carriers’ websites. Due to the market phenomena in US trucking, whereby freight seems to find flow to the lowest price due to ultra competitive 3PL pricing strategies and sales reach within the small to medium sized shipping community, this new ad-hoc on-demand pricing could end up disrupting the carriers margins if its employed by a large number of carriers. The idea being that a carrier will dispute other carriers’ regular freight and cause the other carrier to all of a sudden have a need lane, which would create a drop in their pricing and then disrupt the rate to bottom.
Traditionally, ocean liners like Maersk, OOCL, HAPAG LLLOYD, etc. have set up their vessels with a majority of contracted space allocated to the large importers/ exports like Walmart, Home Depot, etc. and then reserved a fraction of the space to float on a spot market-based rate that would move up and down based on the space available and booking forecasts. During heavy bookings the rate would go up above the annual contract rate levels, and during low booking periods the rates would go below some contracted rate levels. During some of the last peak seasons and tariff rush, lack of space has caused problems for both contracted rate customers as well as spot market customers. The contracted customers who had agreed to a set rate and volume commitment were frustrated because they couldn’t get space on any vessels even though the liner signed a commitment to allocate the space. The spot market couldn’t pay enough for space because there wasn’t any. Both needed space that wasn’t there. This created an opportunity for a new type of rate brought about by companies like NYSHEX which arranged for space to be sold on a guaranteed basis with penalties to both the shipper and the liner if they fail to meet their end of the booking (space/freight). The idea has solved some of the problems for some shippers who were frustrated with rolled bookings; however, when volumes decline and space becomes abundant again, will the idea continue to work? The liners are not financially stable enough to hold out on pricing for higher margins and will take whatever they can get to fill the space, and they will slide back into annual contracted pricing to ensure their vessels are full year round.
Up to the minute tracking
Thanks to the evolution of technologies, customers’ expectations get higher each year. Various companies are now capitalizing on this need for instant gratification and notification of shipment status and are mapping exact locations of shipments globally using a combination of different available technologies.
With the advent of public AIS data, companies like MarineTraffic.com are now able to provide up to the minute location of vessels on the water. Other companies like Ocean Insights and Project 44 have created a business assisting forwarders with tracking all their containers using a combination of carrier direct tracking and public AIS data to push tracking status into freight forwarders’ TMS systems, which in turn is put in front of the direct shipper to show where their freight is at any time of the day.
Everyone knows you can now track your family and friends’ flights using multiple apps like FlightAware.com, but logistics companies are now using this data and tracking results from airline EDI/API feeds to plot customers’ freight locations on a map. Other aggregators like Champ Cargo Systems are taking data from airlines and flight locations and providing them back to freight forwarders for use in their TMS systems. This again allows for a much richer experience for clients of the freight forwarder to see where their freight is at any time of the day.
Truck tracking based on ELD
Other markets around the globe are following suit with the new requirement for electronic logging for drivers’ hours of service in the US trucking market. An opportunity for carriers to provide up to the minute location of shipments, based on live ELD data, is allowing carriers to transmit data on shipments electronically to clients. This data is being used by many companies for various purposes from providing vital info on perishable shipments to allowing manufacturers to know when their shipment will arrive instead of having staff wait on the dock for hours. In other instances, the information is being used by insurance companies to calculate risk and offer better premiums for fleet insurance. Additionally the data allows for more optimized dispatching and truck routing to avoid trucks sitting idle in traffic and avoid missed pick ups.
Autonomous final mile and linehaul vehicles
There is grave concern for the future of trucking in the US, Canadian and European markets due to a shortage of truck drivers entering the market and a large number of drivers who will be eligible for retirement in the next few years. Trucking companies in the US believe some of the blame lies in the DOT’s rules for CDL licensing that require drivers to be over 21 years old for interstate driving. That has prevented trucking companies from hiring potential drivers right out of high schools, because other sectors of the economy specifically building trades have provided young 18 year old adults a better income right out of high school than what a trucking company can provide working a dock or doing intrastate-only work. Some trucking companies have become creative by utilizing smaller box trucks for city runs that don’t require CDL licenses; however, there is still a shortage. The shortage is very prevalent in the long haul interstate runs that require a driver to be away from his family for many nights of the year. Due to the pressing needs of the market, a few creative companies have tried to address the issue with autonomous driving vehicles.
Autonomous final mile delivery
A few companies have created some final mile autonomous delivery vehicles that look promising pending regulatory approval. These ideas could be a more realistic delivery method compared to drones. UDELV has created a self driving locker-type truck that is loaded at a distribution plant and then sent on a delivery route. Customers are notified once the truck is approaching and they come outside to greet the truck. Once the truck arrives, they can open the specific locker in the truck where their shipment resides with a click in an app on their phone. Starship Technologies has created another interesting final mile delivery vehicle that is currently being used for fast food delivery. The units are small and built for single deliveries; however, one can see the potential of a larger unit based on the small robots’ capabilities.
Autonomous linehaul trailers
Otto was one of the first to develop the technologies for self driving trucks. Even though it was purchased by UBER Trucking and later put on hold other companies like Tesla, Volvo, Peterbilt and Daimler are still pursuing the autonomous driving technology for trucks. Due to the pressing driver shortage, there is a need in the market and it’s inevitable that the technology is eventually mature enough to be used in the market. One can imagine a city driver driving a truck to a designated truck stop at the edge of a freeway and then setting the computer for a cross country journey, then stepping out of the unit and allowing it to continue on the highway by itself to a destination truck stop near the final delivery location where another local city driver finished the job.
If autonomous driving trucks become prevalent in the market there could be a lot of disruption brought on by large shippers like Amazon, Home Depot and Walmart no longer needing established trucking companies, their networks and large organized workforces to move their goods. Additionally, the cost of entry into the market would be lower, and it may create some exciting opportunities for venture capitalists to use their vast funds to buy their way into a large national trucking fleet with a minimal workforce.
In conclusion, the future is bright and ripe for disruption, and these are only a few of the technologies that are setting the stage for a new set of winners and losers in the transportation market.