What does the future of the logistics industry look like?

When was the last time you went online to book a shipping container to transport your goods to another country? Probably never.
3 August 2018

AI to revolutionize trucking industry. Source: Shutterstock.

Logistics makes it possible for businesses to send goods to one another, whether they’re across town or in another country.

Logistics, essentially, is what makes international trade possible, and after government policy, is the second most critical item on any supply chain managers list.

However, the industry, as efficient as it might be, hasn’t really evolved in years. People still pick up the phone to ask for rates and book cargo space on a shipping container or railway carriage, and much of the paperwork is still done manually.

Within the logistics sector, it seems as though ocean carriers and freight forwarders are the biggest laggards in terms of technology.

According to McKinsey, only 6 percent of the largest ocean carriers and freight forwarders have end-to-end online booking capabilities.

Some 38 percent of the former and 5 percent of the latter do not even offer online quotes, while most of those that do merely log an online request for a quote, which has to be followed up by e-mail or a phone call, often a day or two later.

Further, an analysis of the websites of 33 large ocean carriers showed that more than 50 percent of them typically took 13 seconds or more to load on a mobile device, while 20 percent took more than 20 seconds. In comparison, the front pages of leading e-commerce companies typically load in significantly less than 10 seconds on a 3G network.

McKinsey believes that the long load times contribute to high bounce rates – the share of users who do not explore a website beyond the first page.

On average, page load times are 50 percent slower for users that “bounce” than for those who continue to engage with a website. This is an unnecessary loss of potential business considering the ease with which load times can be improved.

While there’s few and This being said, it’s clear that there’s little to no technology in the logistics space, at the moment.

What can technology do for logistics?

For ocean cargo and freight forwarding, technology can bring in smarter pricing and more tailored solutions, more collaboration along the value chain, and more data-driven products and services.

Advanced analytics and the Internet of Things (IoT), for example, could help create end-to-end shipment visibility – maybe for pharmaceutical companies whose temperature-sensitive products need constant monitoring – if containers, systems, and fleets were modified.

Better links to terminals and truckers could also enable ocean carriers to offer prioritized loading and unloading facilities for a price.

The fact is, it’s important for the logistics industry to embrace technology because its what is turbocharging the future, especially with IoT tracking, driverless trucks, and drones on the rise.

When the technology is commercialized, shipping containers and railway carriages will simply be mounted by drones onto appropriate driverless trucks, which will be autonomously driven and unloaded at the right factories.

Unless the industry moves into the gear and adopts new technologies quickly, they’ll be disrupted. Because the customer is king, and they’re demanding more convenient services.