The Future Of Deliveries Is Digital
It is safe to say that the time has come for the traditional logistics space to make the leap and get “smarter”
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Let’s say you order a meal through an app. It costs you< 300 bucks, and takes ~45 minutes to arrive. You can get the ETA, track the order, pay for it, and rate the experience, at the touch of a button. The app (company) knows the status of your delivery, how much you paid (and receives it immediately), and your satisfaction level, versus mine. They also know our ordering patterns, and tastes and use this information to serve us better food, and experiences, every day. This is true for taxis, restaurants, groceries and carpenters, today, and boy, do we love it!
Now let’s say you ordered something worth 300,000 bucks, was fragile, and takes weeks to arrive. Would you expect a similar experience? What if you did this hundreds of times, every day? Would you want more, or less information about all of your deliveries?
B2B Logistics is a black-box — and the costs are huge
Unfortunately, though, this great user-experience is restricted to e-commerce deliveries — which barely scratches the surface of global commerce. A majority of global (read:“traditional”) commerce is driven by B2B deliveries, that operate with little to no information. Irrespective of industry or scale, outsourced logistics is hugely fragmented, multi-tiered and low on tech. This leads to an enormous number of intermediaries between pure demand (shippers) and pure supply (vehicle owners/drivers). Companies are forced to deal with a few dozen entities for each delivery — transporters, brokers, vendors, and partners for first mile, long-haul, last mile, warehousing, and transshipment. Documents, payments, and information are held in silos, and transacted in, physically.
Irrespective of industry or scale, outsourced logistics is hugely fragmented, multi-tiered and low on tech.
Shockingly, even the world’s largest companies — that have efficient, digital workflows to manage their customers, finances, assets, and employees — coordinate their deliveries using multiple spreadsheets and emails, every day. Thousands of reams of paper, litres of ink, and calls and SMSs are invested in tracking, monitoring, reporting, and communicating progress of each delivery. Tragically, all of this data disappears at the end of every transaction. The consequent lack of (equal access to, and analyses of) information makes deliveries inefficient, and costly.
Companies of all sizes are weighed down by these costs. Our research showed that proactive supply-chain managers and COOs at pioneering companies all over the world had repeatedly tried solving this problem. Some companies had sponsored in-house products. Others had implemented expensive Transport Management Systems available in the market. These products, some ingenious, had been costly to build, took years to implement, were cumbersome to maintain, and feature-focused to the point that they were often not scalable, or user-friendly — at best relegating them to legacy systems that were not very helpful, or at worst, making them completely unusable.
This problem is big. In India alone, outsourced logistics rakes up ~US$ 200 Billion every year. Globally, this number is close to 10 Trillion. Assuming inefficiencies account for 2% of top-line, we are looking at a $200 Bn problem (TAM). Developing economies face challenges similar to those in India, under almost identical market structures. Excitingly, that is most of the world.
Building The Future of Deliveries™
The best way to transform the traditional logistics space will be to infuse it with some “smart” technology ideas. An intelligent, predictive, scalable platform will enable companies to control their fragmented, multi-tiered ecosystems. This can only happen if there is direct communication with key stake-holders in the logistics space – supply chain managers, CEOs, COOs, truck owners, drivers, etc. Understanding challenges every step of the way, will make it easier to fine-tune the platform to ensure that it can adapt features to new cases and build features to counter infrastructural challenges.
From the transporter’s perspective imagine having one central dashboard where real-time reports and other key data can be easily accessible? It will help large companies continuously access all transportation from, to and within an organisation and their clients, and information about vendors, loading and unloading points, trips, and trucks, contracts and materials. All this data can be continuously visualised digitally and securely. It can also at a later stage eventually aggregate to industry-wide data, and that in turn could be made useful to industry bodies, government agencies, etc.
It is safe to say that the time has come for the traditional logistics space to make the leap and get “smarter”. While making the shift will be a challenge nevertheless, there are players in the market who will ensure that the transformation takes place seamlessly so that companies can delight their customers one delivery at a time.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.