According to PWC’s 2018 21stCEO survey: “T&L [transport and logistics] CEOs see their sector moving into a strong growth phase. That marks a big change from previous years…” Optimism indicates the likelihood of brisk business for transportation and logistics services, such as freight brokerages, freight forwarding companies and carriers.
Industry leaders also see their business environment as becoming increasingly complex, “… moving toward multiple political and economic systems and regulatory regimes amid rising nationalism… In general, T&L CEOs feel a sense of urgency about updating their legacy IT systems, which have suffered from a lack of investment in recent years and are more vulnerable to cyber threats than newer systems.”
Business owners and their executive boards are right to be concerned, with the increasing instances of hacking of critical infrastructure, it is a matter of time before the T&L has their moment of public exposure to risk in the news.
Rolling Growth and Good Vibrations
60% of the T&L CEO’s surveyed by PWC were optimistic about improvements in global economic growth over the next year; this sector, that has its finger on the pulse of what makes the world economy move were, it seems, even more than the average of 57% of optimists for other sectors. Almost half of T&L CEO’s (45%) said they’re expecting their own companies to grow in the next 12 months. This is more than 10% more than those who felt optimistic only a year ago, (32%).
It seems that those at the coal face base their positivity on three of the most important markets: “…US, China, and Germany, in that order”. Rather than regulation being their key concern, as it was last year, perhaps the digital support given by comprehensive, configurable and customisable TMS software is relieving T&L companies of that weight of compliance process. Data that is updated in real time can flag up potential risks, notify of reporting schedules and generate required documentation automatically, regardless of where companies operate in the world. Perhaps the increased move to digitisation in the industry is no coincidence.
Freight Risk Management
Understandably, risk management is high on the agenda of a sector exposed to ever-changing geo-political situations. The biggest fear of T&L CEO’s in this year’s survey was terrorism threating their company’s growth prospects. Those 45% compare unfavourably to other sectors, where only 41%on average cited terrorism as a business threat.
Leveraging Digital To Ease The Load
Concern over cyber threats is growing. In other recent research, company managers admitted to having been exposed to cyber attacks; shockingly, this was 50% of those surveyed.
CEO’s in the T&L sector, said PWC, are aware that their vulnerability to cyberattacks is down to deployment of outdated systems and that newer technologies offer better security. While at the moment it is the passenger transport sector leading the way in upgrading, because of the potential impact a single attack could have, cargo shipping companies, whose business model is as complex, if not more so, are lagging behind leveraging more innovative systems.
Part of the problem in T&L is a global shortage of digital talent. PWC refer to this as a “…chronic concern in the industry”. A massive 78% of CEO’s report being concerned about “…the availability of digital skills for their own workforces”. The same number of T&L CEOs also express concern about “…the availability of digital talent for the industry as a whole…”
58% say they have difficulty attracting digital talent, well more than the 50% global average. This could well be a chicken and egg situation. Certainly the digitally savvy millennial generation expect a high degree of computerisation and connectivity from their employer; this has been shown to even impact on their morale and commitment to their employer. When an employer invests in the future, this inspires confidence in younger interviewees, making it also more likely that they will favour jobs with the digitised companies over those stuck in outmoded paper based systems and poor computerisation.
To attract strong digital talent, who are well-motivated and loyal, say PWC, many T&L companies are “…modernising their working environments and introducing new, more flexible ways of working.” This demands up to the moment, sophisticated data management and transfer systems that relieve the administration burden and free more creative personnel to focus on higher value strategic work, or offer better working conditions that take the burden of accountability off individual drivers, for instance, because of greater automation of data, removing risks of human error, or even being blamed when things go wrong.
Comprehensive TMS software packages are perfect for businesses that have a complex business model, or operations that cross national boundaries and various jurisdictions. Flexible modules, integrated into tailor coded systems, or upgrading of legacy IT with more secure, flexible and end to end data management mean companies can have greater confidence in:
- Greater visibility into operations in real time
- Compliance through automatically generated, on time documentation
- More transparent supply chain management
- Reduced or eliminated human errors
- Machine learning that predicts future demand for improved planning
- Smoother, clearer communications between supply chain partners
- A more satisfied workforce, whose word is backed by big data
Partnership is Power
In T&L, of course, it isn’t all about the efficiency of office systems, it’s about the people and while companies struggle to attract the necessary talent, there is always outsourcing during transition periods.
Partnering with a digital partner who has direct experience of the T&L sector means that the assessment your business must go through, to move from current data systems to the ideal future back office and field connectivity, this should be easier. TMS software providers are two-a-penny, but expertise of your industry is everything to ensure you build the appropriate system to meet your future business objectives.
Companies, such as Logistician, can work closely with T&L operators to build a customised IT system to meet the demands of the most sophisticated international players and secure the smaller competitor against the global threats of cyber-terrorism, while also potentially give advance warning of terrorist activities on the ground to transport managers who can then reprioritise at a moment’s notice and connect immediately with truck drivers on route.