UK Brexit is around the corner and freight logistics management technology is proving its value daily with companies going ahead with systems innovations. Venture capital investors also recognise that transport and logistics offers huge returns for those companies transforming the transportation industry with freight management software and tools.
Transport topics claim that for freight broker companies and third party logistics providers (3PL) to remain competitive in this fast changing market, adoption of efficiency driving tech is essential to remain viable. The risks of not adapting were made clear early last month at the Transportation Intermediaries Association’s inaugural ‘3PL Technovations’ conference.
One supply chain management cloud services agency representative described the pace of technological change in the sector thus: “We are in the middle of a revolution.” Those companies that adopt the technology available will be the survivors through the process of uncoupling from Europe politically and beyond.
Smartphones and portable devices are “…far more powerful than the computers NASA used during the Apollo program,” says Transport Topics. Incredible processing power of modern digital ware also allow for the growth in artificial intelligence applications to garner data from pre-existing and enhanced computer systems to identify operational gaps, challenges and business opportunities for the future, according to one speaker.
Apparently, more business investors are supporting sector innovation. Kurt Cavano of GT Nexus referred to a pool of untapped venture capital and private equity totalling $1.1 trillion, this money while committed for investment, “remains unspent”. Given the scale of digital and technological advancement yet to be realised in freight management, the modern investor recognises the potential returns on investment in this multi-trillion dollar, global industry.
As Brexit issues remain unresolved fully, investors in the UK will be playing their cards close to their chests, but there are some who understand that however detrimental Brexit could be in the worst case scenario, the UK remains the fifth largest global economy and overseas trade could experience unanticipated benefits following the 29 March Brexit deadline.
UK overseas trade is in a transition stage, but with UK government investment in freight forwarding system technologies, chances are, private investment will be less difficult to achieve in terms of match funding.
Whatever the UK’s trade outcomes, technologies are unavoidably transforming businesses of all types and sizes and procrastination over upgrading current freight systems risks companies being left behind. Potentially comparable to the industrial revolution of over 100 years ago, companies cannot avoid the inevitability of winners and losers from freight management software and hardware innovations happening.
Cavano puts this latest fight for survival of the future fittest in stark terms: “We’re going to go through this incredible transformation, and it’s going to leave no one undamaged. You’re going to either be on the train, or you’re going to be run over by the train.”
The president of England Logistics and chairman of TIA’s board, Jason Beardall, suggested in his speech to the conference that logistics and transport professionals regard emerging technology “not as a threat, but as an opportunity”. Currently, some companies are still afraid to innovate for fear the technology they invest in could be superseded by the latest generation of upgraded systems. This indecision is actually hampering growth, given such systems have already proven to pay for themselves in terms of savings they facilitate.
Some industry experts also fear that technologies coming through could lead to the replacement of the freight broker or 3PL provider. However, strategic decisions still need to be reviewed by human partners to the technologies at play. Current AI based tech requires human collaboration, given the scale of variables at play for any particular business and scenario. Certainly, however, the data can suggest alternative decisions being made to what may have otherwise happened.
Logistics firms and their stakeholders need to recognise that there are countless opportunities available in harnessing the latest logistics management technology. Not only the early investors can benefit, but their customers too will appreciate the savings and level of accountability they can achieve from their service providers who can prove their word, backing up performance claims with robust statistical analysis. Companies can create efficiencies that help them gain real competitive advantage in the market, said Beardall.
He further commented that “The problem is our willingness and our pace of adoption.” This was a message echoed by others and which we fully endorse at Logistician.
Bob Voltmann, President of the Transportation Intermediaries Association’s speaking recently at the inaugural ‘3PL Technovations’ conference pronounced on technological innovation in logistics management, saying: “If we don’t change and adapt, we’re dying”. Voltmann was talking to an audience of third party logistics (3PL) providers, transportation brokerages and freight forwarding company representatives, actively encouraging listeners to “be the disrupters, not the disrupted”.
From the range of speakers at this industry conference, the audience was left in no doubt about the necessity to move with the times in terms of adopting a freight brokering system fit to take businesses forward into a highly competitive future.
One example among many described how contemporary technology demonstrably improves the supply chain for all concerned. For fleet owners and managers, one obvious efficiency saving is in the visibility of under-utilisation of truck capacity, where road freight vehicles are often prone to carrying less than load, resulting in sub-optimised use of resource, excess vehicles on the road and most importantly for operatives, lost profits. Despite the freight market being strong, under-capacity remains an intractable problem without, for instance, software packages that connect business partners and enable greater co-operation to minimise losses.
Jason Beardall, President of Logistics England suggested that if freight brokerages and 3PL’s took up the technology currently available, operators could “…offset the capacity shortage by curbing wasted, empty and out-of-route miles and reducing or eliminating driver detention time.” A good example of this is the connectivity facilitated by an app based freight forwarding system that individual truck owner operators could tap into to pick up the slack of last mile deliveries, for instance.
To maximise the potential of freight management software capabilities and service provider transport, Mark Carroll, director of product strategy for Descartes MacroPoint, suggests that collaborative data sharing among 3PLs can unlock “trapped capacity.” This is a transformative business model which the immediacy of digital communications facilitates. Increasingly, competition between companies will be enhanced by partnerships across supply chains. Trust requires transparency that data harvesting with digitised and automated logistics management provides for.
Another traditional source of losses for operatives is during the booking of a truck by a 3PL, when the carrier completes the delivery, “that truck often isn’t matched with the most efficient route to take next because that route isn’t available in that particular 3PL’s network.” Obviously, when partners come together, they can make best use of that vehicle by allocating it to another job in their system. The detail of fee systems for such new collaborative projects can be easily negotiated, such that each party benefits. Ultimately, the public will also benefit, with less vehicle congestion and the government regulations on pollution are complied with more.
Carroll of Descartes MacroPoint (formerly Descartes Systems) said: “Because we work in a closed environment, the information around that carrier isn’t shared, and the capacity becomes trapped within your four walls. We believe in open, agnostic networks where we can share information.”
Tom McLeod, CEO of McLeod Software explained how shippers are outsourcing more, given the convenience of interconnected freight management software. However, this is not squeezing brokers, as one might expect, given that manufacturers, wholesalers and retailers
“… have no core competency in maintaining relationships with wide numbers of carriers. This is something that freight brokers do extremely well, and this is the key to having reliable capacity.”
Connectivity between brokerages and their clients merely enhances transportation operations and potentially helps more goods move faster, benefitting all concerned.
The conference will become an annual event in order for stakeholders to remain abreast of technical developments and associated industry developments. The TIA wants to help its members understand what is at stake, which technologies are appropriate for them and to embrace the opportunities now available to them, according to Ramona Hood, vice president of operations strategy and planning at FedEx Custom Critical and chairman of TIA’s technology committee.
She commented: “You hear about disruption. You hear about transformation. And the goal of the committee is to give you the information and the insights so you can be an early adopter” and create a “competitive edge for your business.”
Following this well-attended event, there is sure to be a rapid uptake in freight forwarding software and new logistics management technologies, particularly in view of the UK’s imminent exit from the European Union which will bring its own transport and logistics transformations.