Transport operators may think they are on top of digital technology with on-board telemetry, track and trace, routing and scheduling systems. But, they may be wrong…
Up to now, ‘digitisation’ has largely been about ‘playing the game better’ by using IT to improve efficiencies and reduce costs. However, Big Data, Artificial Intelligence, the Internet of Things, autonomous vehicles and additive manufacturing, will not just change the rules of the game but the very game itself. Now commonly referred to as ‘digitalisation’.
Amazon or farmers market?
Commerce seems to be polarising between the Amazon and the farmers’ market models.
Both depend on collaboration and is all about the network. Theoretically it always was, but with ‘digitalisation’ it becomes a reality. Different networks will have different rules but for the most part, machines will use vast amounts of data to co-ordinate and optimise every movement and event across a cast of thousands. This will be carried out objectively, regardless of personal relationships or brand values.
Transport, which is the lifeblood of economy, cannot help but be profoundly affected. Digitalisation is already blurring the boundaries between B2B and B2C. Combine that with additive manufacturing, like 3D printing, and many traditional volume flows could be disrupted.
While the big 3/4PLs will survive, they won’t be setting the rules in the ‘new game’ and they certainly are not ‘too big to fail’. however, the biggest threat, as witnessed in e-retail, will be for mid-sized operators.
Prepare to survive
Don’t panic just yet. Transport operators can do a lot to improve their prospects and even modest investments could put you ahead of the game.
Rather than focusing on specific current solutions, take a look at the bigger picture. What will your customers expect of you when they themselves embrace digitalisation? Try asking them.
- What data would they need or expect to be able to access automatically from your systems?
- And what could or should they be showing you?
- Do your current systems allow this, and how secure would that be?
- Don’t worry too much about formats – integrations are pretty easy to come by, but do you actually have – in any format – the sort of data your customer’s machine might demand?
As a hint, they will be looking for a lot more data on, for example, sustainability performance – because they care, or because they can. Is your EDI/communications capability up to the job? How much of this can you/are you willing to automate?
The correct answer is ‘Anything I can’t make a positive, cost-effective improvement on by doing it manually’.
Intelligent freight matching
By engaging with customers you can build a reputation as a firm that is willing and proactive on the digitalisation journey. But go further and dip at least a toe in the water by participating in intelligent freight matching, for example. You will get a feel for systems and data requirements, and equally importantly, you’ll learn what factors like security, openness, confidentiality and trust look like in this new digital world.
The fact that freight matching will probably pay for itself anyway, is just an added benefit.
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