As a simple overview - a detailed, computerized method of managing logistics in which technology optimizes the management and performance of assets and loads.
In your day to day work, this could mean for instance GPS tracking for both vehicles and goods, automatic tolling solutions and fleet management tools. It could also be automatic payment solutions that can lower administrative costs and give you a broad view of your financials.
The logistics industry hasn’t had the digital transformation that most other industries have been through in the last 5-10 years. There are still many manual processes that could be automated or made more efficient through digitalization.
Advances in technology both regarding cost and ease of use together with changes in society are driving digitalization in the trucking industry. The industry is also being boosted by the growth in global consumption, trade and urbanization. Meanwhile the way products are being transported at different stages of the supply chain is also changing. E-commerce, home deliveries and changing shopping habits fueled by online discounts and same-day-delivery promises, is creating new pressures.
Busier cities, more congestion and restrictions on weight and emissions for trucks is also creating the need for logistics firms to put an increased emphasis on safety and environmental care. Managing these changes well and profitably will require you to make the most of digital opportunities.
But these aren’t the only reasons for you to now digitize your business. There are an increasing number of start-ups, one example is digital freight forwarders focused on load utilization rates, who are looking to digitally transform the industry. These customer-focused and digital native companies see a highly fragmented market in terms of data, many manual processes and sense that the time is right to quickly and profitably set up new ways of doing business.
All of this sounds pretty daunting but the good news is that as technology becomes more accessible and easier to integrate, there has never been a better time to digitize your operations!
There are many ways digitalization can benefit your business today and below I have listed some of the most obvious ways:
Improve rates of utilization: Empty miles account for 20% of road freight traffic in Europe, a number that can go up to 40% in countries like China. A major cause for this is inefficient dispatching systems where trucks are travelling to a pick-up destination without any load. Interconnected digital platforms could solve this problem by consolidating the transport capacity of thousands of carriers and provide shippers with sufficient and the right kind of capacity when and where needed. This kind of improvement in utilization rates would also have a positive impact on industry margins that have reached historic lows.
Reduce administration: Today’s manual and telephone-based demand matching processes mean that time and money is spent arranging capacities and set prices often with imperfect information. These processes typically need several days whereas an algorithm could set the price in a millisecond, a bit like how booking platforms do this today for the travel industry. Digitization can also simplify communication before, during and after transportation and keep all parties in the loop with status push updates. Regular reporting to authorities regarding safety and environmental standards could also be digitized and automated.
Improve customer experience: A natural outcome of digitized processes and interfaces is an improvement in customer experience enabled through easy to use booking platforms and the ability to track vital information about shipment. The experience can be further improved by the measurement of key performance indicators and metrics to identify areas of improvement to processes and protocols. Through the use of technologies like blockchain there is even the possibility to give end consumers complete transparency of the social and environmental footprint of their purchases.
These are just some of the ways in which digitalization can have a positive impact on your business. As the pace of technological development continues, I am sure there will be many more benefits that the industry can reap. What can be said for now though is that the era if digital trucking is here to stay and will greatly benefit those who will be able to leverage the new technologies!
I have put together a guide for you showing how digitalization can be used to increase productivity for your business. Included in my guide is:
Jonas is a VP of Productivity Services at Volvo Trucks.