What’s the True State of Digitization in Logistics?
Digitization and technology are things talked a lot about in global supply chain logistics. Unfortunately, the conversation is usually focused on the lack of both.
Criticism for failing to embrace technology is not as simple as blaming groups like freight forwarders. They are often simply responding to the marketplace. If their shipper customers don’t want to use an online portal to book shipments what are they really to do?
But, this is changing (at what seems to be an accelerated pace) as new technologies are gaining acceptance by both service providers and shippers.
Digitization in a lot of different forms is happening, here are a few of the ways it’s having the most impact.
The most visible example right now is with the shipper customer experience. By this we mean forwarder and carrier’s ability to provide faster and more accurate information to shippers - like track and trace. Customers now know with better precision than ever where their product is at all times, regardless of transport mode or location around the world.
Another is the ocean booking process with carriers. For reasons we won’t get into here, the process of confirming space on a cargo ship is messy at best. This includes getting access to other basic, but important information like sailing schedules and accurate freight rates. Connecting shippers, forwarders, and carriers through technology is making the basic function of booking a shipment easier, as well as improving the flow of key shipment data and costs.
With many benefits that are obvious (time savings, accuracy, etc.), digitization is also already streamlining the paperwork intensive process of international shipping. Electronically capturing and using shipment data with an application like www.interarc.co is simple first step towards digitization for many companies.
There are other future opportunities coming fast as well. The most talked about is blockchain technology which has the promise of streamlining the flow, security, and accuracy of data throughout the supply chain.
Domestic trucking is different (and in many ways simpler) than ocean container shipping but is experiencing interesting changes thanks to digitization as well.
Many of the coming innovations in the space made possible by digitization are rooted in the concept of IoT, which makes the sharing of data and communication between machines possible. Examples of this in practice include platooning and autonomous driving trucks.
Other examples for how digitization is improving domestic shipping include how carrier selection and load planning functions are more easily optimized. Leveraging technology, shippers are able to improve order routing to lower logistics costs and automate freight matching to find the best carrier.
While it sometimes feels it’s not happening fast enough, digitization is changing the logistics industry. Much of the resistance to adopting technology comes from customers (shippers), so it’s important that service providers (like freight forwarders) are diligent in pushing for more of this type of positive change. Technology and digitization applied in the right way can be transformative for the industry and it’s up to service providers to continue to sell that vision to shippers.