End-to-End Visibility Is Driving Innovation in Logistics

end to end visibility - End-to-End Visibility Is Driving Innovation in Logistics

It’s always interesting to take a step back and consider the forces at work in the marketplace and examine how they are changing the sector. Logistics has undergone an especially remarkable transformation, expanding into almost every facet of corporate operations, while blurring the lines between client and service provider.

The most interesting takeaway from the recent KFC missing chicken fiasco was how integrated DHL Supply Chain was with the fried chicken purveyor’s operations. As their economic importance grows, logistics managers are being forced to move fast, adopting technologies from other sectors or developing their own.

As logistics companies took on a wider portfolio of business solutions, their clients still expected the same oversight that they themselves had exercised. Just because supply chain operations were outsourced didn’t mean that clients didn’t want to know the exact location and condition of their inventory. If enterprises could gain better visibility over supply chain events, they could react to them quickly and run operations more efficiently. The more visibility, the better.

As a result, tracking technology has made its way into containers and pallets across all modes of transportation. Where those devices didn’t exist, logistics technology companies found ad-hoc solutions. That cell phone in a driver’s pocket became a tool to track shipments and register handoffs. Traffic data sourced from the internet was integrated into cargo management software. The list goes on, but it’s worth staying ahead of the most recent technological developments, and ones that are on the cusp of breaking into the sector.

The Internet of Things (IoT)

Sensors are only helpful if they contribute to a complete picture. For high-value shipments, “black-holes” along the supply chain pose the risk of theft or other excursions that could render a shipment worthless. The power of IoT is its ability to get devices to communicate with each other, creating a detailed real-time picture that shippers and logistics companies can use to ensure that their shipments are safe. According to consulting firm KPMG, 87 percent of companies either had already invested in IoT, or were planning on doing so.

A growing list of sensor-driven visibility tools is giving users an unprecedented level of insight into the events along the shipment. Expanding cellular networks, more efficient batteries, and advances in cloud computing are enabling affordable, long-lasting, globally connected tracking devices that make real-time supply chain visibility a viable option.

According to the UN Food and Agricultural Organization, one-third of perishables are spoiled in transit. IoT sensors let shippers stay connected, with real-time data, alerting them to temperature excursions before they damage goods. Logistics companies handling the shipments are alerted to those same excursions, helping them head off losses.

Blockchain in Shipping

Shipping company Maersk found that a shipment from East Africa to Europe went through nearly 30 people and organizations, involving more than 200 different communications among them. That’s an incredibly challenging environment for visibility, but recent developments in blockchain technology have proven that it’s possible and more secure than ever.

A survey conducted by Chain Business Insights found that more than 30 percent of supply chain professionals were already working on blockchain based solutions. Because it is highly encrypted and impossible to fabricate, blockchain makes it easier to share insight into the status of shipments, while also tightly controlling who sees that data and what they can do with it. For supply chain managers with access, every one of those aforementioned 30 handoffs would be available in real-time, ensuring that freight never languished in “black-holes.”

Blockchain is quickly moving from concept to market acceptance. In late February 2018, Singapore-based PIL, terminal operator PSA, and IBM announced the successful completion of a blockchain trial to that tracked and traced cargo from Chongqing to Singapore. The logistics coalition says that they are ready to take the project to the next level.

Logistics Track and Trace Technology

Freight can spend days and weeks in transit, travel thousands of miles, and may change hands multiple times, which presents numerous challenges to visibility. Logistics companies have tackled this fragmentation by either installing sensors that can broadcast for extended periods of time, or by deploying passive solutions such as RFID tags that signal to receivers around them, in airports, terminals or warehouses.

This new generation of transmitters combine Bluetooth/Wi-Fi/and Global System for Mobile (GSM) hotspots and beacons. They can be attached to individual packages, pallets, or containers sending out location and condition information to sensors-in-transit or in-storage, in real-time using BLE protocols.

Recent improvements in track and trace from companies such as RoamBee address two major gaps in the industry: visibility and actionable data. Now, shippers can get real-time information on movement history, idle time, geo visibility and estimated time of arrival, light exposure (for signs of tampering), location, temperature, and humidity deviations (to monitor spoilage).

Digital Freight Forwarding

Innovating sometimes means taking what you have and find novel ways to use it. Digital freight forwarding doesn’t require users to spend millions on new equipment, instead, it uses existing fleets and technology to provide end-to-end visibility. Perhaps the most advanced equipment required is the smartphone that each driver carries. Those low barriers to entry matter, because the success of digital freight forwarding has been getting smaller carriers, with smaller technology budgets, to get on board.

This new way of booking and shipping freight online evolved because not only did shippers wanted real-time data on their shipment, they also wanted to know where additional capacity was. While conventional forwarders bought capacity from carriers in advance, that wasn’t always enough, and it was rarely efficient – think about the non-revenue earning miles that trucks travel between the unloading and the next loading place. In Germany alone, there are 6 billion kilometers that are being wasted. The global estimated distance trucks are rolling empty is 120 billion kilometers (74.6 billion miles) a year – Yes, billion with the “b”.

Digital freight forwarding provides the tools for carriers to advertise their additional capacity to shippers, online. If there’s capacity, it’s on the market, and shippers know when and where. Once the shipment is booked, those same phones used to book the shipment are used to relay the information about the shipment. The outcome is fewer empty running and more productivity, with carriers now able to take shipments on return hauls.

Computer Learning in Logistics

We are at the point where industry experts are asking whether the concept of “visibility” is outdated. Instead, some are pointing to the importance of “predictability.” Given the massive amounts of data that supply chain operators have at their fingertips, experts predict that we’ll have the technology to predict exactly where shipments are, and then use algorithms to make sure that shipments are routed properly. If we can factor in every important piece of information, this line of thinking goes, why can’t we control the way shipments move through it? That’s an exciting prospect, and there’s still a way to go.

Achieving supply-chain visibility remains challenging, despite all the new technology on the market. That’s because, in addition to the costs of the most advanced equipment, it’s hard to know where to start. Unless you are handling millions of dollars of high-value pharmaceuticals, for example, it probably doesn’t make sense to affix an expensive transmitter to every pallet. But, there are low-cost transitions that companies can make using technology that is already in their offices and driver’s pockets.

In the end, the customer is always right. Shippers read blogs like this one, carefully noting these technological advances, and they are starting to ask, why can’t I get service like this. That’s putting increasing pressure on logistics companies, but it’s also spurring a frenzy of investment and innovation, as the startups and established players alike compete to deliver on the promises of new technology. InstaFreight is excited to be at the forefront of this disruption, and our digital approach to the market ensures that we’ll always offer the latest solutions.

Further Readings on Supply Chain Developments

If you want to know more about these supply chain developments, we’ve found the following blogs to be especially helpful:

Logistics Newsroom: (logistics-newsroom.com) Compiled by the media guys over at DHL, this blog is a good representation at of what the integrators are reading. There’s also plenty of insight into their own operations, and it’s a great place to catch up on the latest robotics and supply chain management projects.

Logistics Viewpoints (logisticsviewpoints.com) With so much being written about the logistics sector, it’s sometimes hard to know where to start. The industry veterans over at Logistics Viewpoints help out, with clear and concise analyses of logistics trends, technologies, and services.

Supply Chain Minded (@SCminded) There’s a lot of insight on Twitter, but anyone that spends time on the platform knows how distracting it can be. Supply Chain Minded is an active online community of supply chain professionals where you can read about everything from source planning to reverse logistics.

Supply Chain Matters: (www.theferrarigroup.com/supply-chain-matters/) Global supply chain expert Bob Ferrari has been updating this blog for more than a decade now. Supply Chain Matters delivers independent, unbiased views, insights, and education into topics surrounding the managing and deployment of global supply chains.

Logistics Trends and Insights: (http://logisticstrendsandinsights.com/) This blog out of Atlanta, Georgia, the home of UPS is what you get when seasoned industry analysts decide they like to write as well. A big fan of all things supply chain, head analyst Cathy Robeson has a particular interest in e-commerce, cold chain logistics, air and ocean freight, freight forwarding and industry-specific logistics.

~3.5bn Venture Capital for Logistics Startups – The Acceleration of Disruption


We can expect the logistics landscape to look very different in a few years, as digitalization, and investment by logistics incumbents face off with more than a decade of venture capital investment into logistics startups. That’s one major takeaway from a report released by strategy and consulting firm Oliver Wyman titled, “How Start-ups Digitalize Logistics – 2018: The Acceleration of Disruption.”

But as competition heats up, financial backers of all stripes are training their sights on a broader spectrum of the logistics market, moving beyond the traditionally hot investments in last-mile. Start-ups are now engaged across the logistics value chain, “aggressively expanding into new spaces such as virtual/automated warehousing, supply chain visibility, and steering and supply chain financial services,” the report said.

According to Oliver Wyman, even storied logistics companies such as Kuehne + Nagel and DB Schenker are transforming, thanks to the digitalization of logistics. As startups push new technology and approaches onto the market, established companies are emulating them, often deploying strikingly similar technology and leveraging their market share and customer base to fend off challengers.

2018 OliverWyman How Start ups Digitalize Logistics dragged - ~3.5bn Venture Capital for Logistics Startups - The Acceleration of Disruption

Taken together, these observations from Oliver Wyman should finally dispel the myth that the logistics industry is “slow to adapt,” or “resistant to change.” Instead, the report indicates at least eight areas other than the last mile, where both venture capital firms and incumbent logistics providers are training their sights:

  1.       Digital freight platforms – Investors are watching this sector closely. These attractive startups are especially promising because of their low-cost, yet disruptive model that eliminates waste by digitalizing transactions along the supply chain. Startups in this sub-sector have also attracted interest as surplus capacity in trucking and airfreight dwindles. Online freight forwarding addresses this market scarcity by bringing additional visibility to unused truckloads and aircraft bellyhold. They then allow shippers to access this previously undiscovered space at competitive rates, making supply chains more responsive and reliable. Oliver Wyman found that startups in this sub-sector, including InstaFreight, attracted some 5 percent of total funding.
  2.       Maritime – Maritime startups may only be attracting 1 percent of total investment capital, but according to the Oliver Wyman report, these fresh-faced companies provide important services. Three areas of note were, vessel and asset tracking, route optimization, and ship-to-ship and ship-to-shore communications.
  3.       Land Transportation –  Autonomous trucking has been grabbing headlines for years now, but with the technology closer to market deployment than ever before, competition is pitting major venture capital firms against household names like Amazon and DB Schenker. And it’s not just trucks that can drive themselves. Digitalization is spurring investment in areas of land transport such as mobile solutions for drivers and fleets, fleet management, and alternative commercial vehicle tech.
  4.       Warehousing – With consumer habits irreversibly changed by e-commerce, warehousing has been undergoing a shift in the last few years that has brought in a massive amount of venture capital – 13 percent of total logistics startup funding. The rise in on-demand delivery is making these investments all the more pressing. Investors are looking for ways to increase warehousing efficiency, as well as ways to provide alternatives to warehousing and logistics giants like Amazon. With virtual warehousing, smaller companies can access the market by outsourcing warehousing to third parties. There’s also a major robotics and virtual reality component to this funding, with investors pouring millions into warehousing robotics, and wearable devices and services that make processes such as pick-and-pack more efficient.
  5.       Last Mile – There’s a reason why the last mile is still drawing in 53 percent of total venture capital funding, with major investments reaching into the billions of dollars in one or two cases. The last mile is the most complex part of the supply chain, pushing delivery companies beyond the predictability of their warehouses and well-worn FTL routes into the neighborhoods full of diversions, traffic, and customer interactions. Mistakes in the last mile can cost companies customers, while strong-performers earn market share. Startups that promise improvements in this sub-sector can translate into serious returns. Thus, attracting serious investment.
  6.       Integrated Logistics – This space is the perfect sub-sector for established players to leverage their experience, while newcomers are already creating efficiencies with new technology and business strategies. For both parties, digitalization has made this a productive area of investment, attracting 4 percent of total venture capital.
  7.       Supply Chain Visibility & Steering – With billions of dollars tied up in the global supply chain at any given moment, it’s not surprising that startups in this sub-sector are attracting 6 percent of total venture capital investment. Startups in this sub-sector are digitalizing the way that companies monitor and plan their supply chains, using big data to route shipments and avoid congestion. From inventory management to analytics and transport management systems, digital advances are attracting investors who see the remarkable savings potential in this software.
  8.       Security, Transparency & Risk Management – Supply chain management is migrating to the cloud. Logistics companies are rightly worried about the security of their data, and that’s driving a new wave of investment into companies that are using technology like blockchain to secure and bolster these transactions. There’s also increased investor interest in digital technologies in asset tagging and geo sensors, which are low-cost ways for companies to ensure the location and security of valuable products in shipment.
  9.       Financial Service – Ever since people started moving freight, getting paid has been a costly and time-consuming headache. Financial services startups are changing that paradigm by using blockchain to instantly transfer ownership rights, which is shaving weeks off outstanding debts. These same technologies are also allowing businesses to transact directly with each other, cutting out middlemen, and making logistics finances as simple as other B2B transactions in more digitalized sectors.

If there was ever an “invisible hand” guiding the marketplace, it’s at work in the digitalization of logistics. Venture capital is drawing the most talented startups and professionals into the logistics space, and that, in turn, is forcing the established players to adapt or die.

InstaFreight is one such startup that garnered a mention in the recent Oliver Wyman publication. Our online freight forwarding platform recently raised €8 million in Series A funding. We’re excited to be at the forefront of a disruption that is making our sector more user-friendly and efficient, and we encourage you to partner with us as we continue to define our marketplace.

Find Backloads, the Next Loads, and the Loads after That


How Digital Freight Forwarding Is Helping Small Carriers Find Backloads, the Next Loads, and the Loads after That


There are more than 700,000 carriers in Europe, and 70 percent of those carriers operate less than five trucks. That’s just shy of half a million of these small operators, a formidable force by any accounting, and a critical driver of Europe’s economy. But for all their ubiquity, small carriers have been held back by the segmented nature of the logistics market and their inability to access large portions of Europe’s shipping market.

That’s all changed, thanks to digital freight forwarding, a novel way of connecting small carriers to shipments that would normally be beyond their reach. As this new platform for freight transactions grows, digital freight forwarding is closing the gap for small carriers and leveling the playing field for companies that want to take on additional freight and grow their trucking business.

Are you a good fit?

Thousands of carriers are already taking advantage, and it has never been easier to get onboard than today. Each additional carrier that joins increases the utility of digital freight forwarding and makes it more attractive to shippers. That means more jobs and more volumes for carriers. As a small carrier, you keep your independence and still make all the decisions, but you gain power in numbers.

Here’s how it works

Carriers create profiles on the platform. This is where you can advertise your strengths, such as where you routinely have free capacities, and your drivers are most familiar with the roads and conditions. The more detailed a carrier’s profile is, with details such as the type of trailers, fleet size, and additional equipment, the better the business opportunities are.

In the past, small carriers had no way of communicating these strengths to shippers. Such carriers often lack the infrastructure, sales, and marketing resources, and probably do not speak four different languages which may be required to comfortably communicate with shippers and potential business partners across Europe.

With digital freight forwarding, setting up your profile only takes a few minutes, and suddenly thousands of shippers, theoretically, know exactly what your value is, and where you perform best.

Let’s use a hypothetical example, which we will call Carrier X, a Frankfurt-based carrier with four vehicles that specializes in regional transport around Germany. Carrier X generates most of its revenues by delivering furniture to business customers of independent retailers and warehouses that are located across Germany.

A typical delivery for Carrier X might originate at an auto parts supplier thirty kilometers outside of Frankfurt, drive over 200 kilometers to Stuttgart, where it makes the delivery at a warehouse, and then return to the Frankfurt suburbs for another delivery, or perhaps to the depot at the end of the day. That’s a normal delivery for thousands of truckers, but for a carrier that uses digital freight forwarding, that return trip or the trip to the depot is loaded and utilized.

The drivers at Carrier X have gained an incredible amount of expertise in just in time deliveries and navigating the spaces between factories and warehouses in that part of Germany. With digital freight forwarding, managers from Carrier X can now advertise their free capacity on these return routes.

Suddenly, Carrier X gains access to available shipments near their drop off points which need to be moved in the opposite direction – and that just so happens to be the direction that Carrier X is headed anyway. Simply by signing up, Carrier X doubles its haul with backloads, the next loads and the loads after that.

Getting the wheels turning is as easy as downloading an app and signing up. There’s no investment in equipment, no franchising costs, no advertising costs, or any of the other obstacles that kept small carriers from accessing these markets in the past.

Play to Your Strengths

Small carriers are agile. If you’ve got five trucks, you probably know everything about them, such as which one gets the best mileage, or which one needs an oil change next week. Most small carriers also know which routes operate with the most frequency, and that’s where they want to be.

Online freight plays to those strengths. If a carrier regularly has free capacity in Berlin, the system will show them available loads in Berlin. If there’s an intercity route, built-in algorithms will make sure that carriers see those shipments.

It does not take long to make digital freight forwarding a central part of your business. Carriers can use data from their deliveries to build their strategies. For example, if there are recurring shipments outbound from Berlin, carriers can make more shipments into Berlin, allowing them to take advantage of recurring backloads from that area.

Need for Speed

If you are a small carrier, another thing you know is that every euro counts, and waiting up to four weeks for payment for services rendered wastes resources that you can’t afford. You delivered the goods, and you deserve your money.

Digital freight forwarding makes those lean weeks a thing of the past. Instead, you get paid within 72 hours. That’s just how it works. The online freight forwarder verifies that the shipment has been satisfactorily completed, and makes the payment to the carrier. Moreover, small carriers can manage all their administrative work, invoicing, shipping document management, and much more, saving them thousands of euros in administrative costs.

And if you are worried about computers taking over, don’t worry, the digital freight forwarder has logistics experts on hands to help you sort out those shipments, so there’s always a dispatcher to talk to.

And we mean it when we say that the carrier is always in control. InstaFreight’s algorithms calculate the most competitive “buy now” market price, but if the carrier wants more for the job, they can bid at a higher price or call the dispatcher to discuss it. And if the shipper agrees, then the rest is smooth sailing, with more backloads, the next loads, and the loads after that…

Sustainable Freight: How to Get Started

sustainable freight

An overwhelming majority of consumers report that their purchasing decisions are affected by a company’s environmental policies. With global warming dominating the headlines, we’re racing against the clock to save the planet, and customers are increasingly avoiding polluters in favor of companies with strong environmental policies.

If you work in logistics, chances are you fall into the former category. There aren’t any hard numbers because logistics pollution is usually calculated as part of whichever industry it is serving. That said, notice how close carbon emissions from industry (14.7%) and transportation (14.3%) are, according to the World Resources Institute (WRI), and that gives you an indication of how polluting logistics is.

For more information, if these and other sectors are then assigned to various end uses, it is giving us the following results (click on the image to enlarge):

which industries and activities emit the most carbon - Sustainable Freight: How to Get Started
Source: WRI / The Guardian

If we further break it down into modes of cargo transportation, according to calculations by Lufthansa, the average modern ocean vessel emits between 10 and 40 grams of CO2 to move one tonne of freight one kilometer. By rail, the emissions generated are 30 to 100 grams per tonne-kilometer and 60 to 150 grams for trucks. Airfreight is by far the worst offender, at 500 grams and up per tonne-kilometer.

Let’s put this into perspective though. The “Diesel-Gipfel” drew attention to the fact that many commercial trucks are already running cleaner than cars. Recent data from the International Council on Clean Transportation (ICCT) showed that commercial vehicles emitted on average 210 milligrams per kilometer, for cars, that number was over 500 milligrams. Depending on what sort of car you drive.

This doesn’t mean the industry can rest on its laurels, because, there’s the matter of externalities –  side effects or consequences of industrial or commercial activities that affect other parties, without showing up in the price tag. Externalities are a major concern especially in logistics because when you ship something, you pay for the cost of moving it, not the trillions of dollars that we can expect to pay in damage from global warming.

Those are some sobering facts. However, the good news is, our industry’s reputation as a major polluter also represents an opportunity for progressive companies to distinguish themselves and add value for their clients by making their supply chains more environmentally friendly.

Every electric truck that hits the road, aerodynamic trailer, more efficient routes, reduction in unused trucking capacity, and good-old-fashioned communication with customers and the public, each of these developments are cause for celebration.

Each business is different, and there’s never a one-size-fits-all solution, but here are a few suggestions to get you started.

  •         Plan ahead – if you ship internationally, there’s an old saying in the airfreight business that goes, “if you have to fly it, you’ve already made a mistake.” Air freight is notoriously costly, and with a capacity crunch underway, it’s worse than ever. Now factor in those 500 grams per tonne-kilometer, and all of a sudden overland and maritime are a lot more attractive – and cheaper! It’s not always possible, and sometimes that freight just has to fly, but with predictive analytics and proper planning, it’s sometimes possible to go with a slower, less polluting mode. And the best part is, you save thousands of dollars per shipment!
  •         Carrier selection – Another way to reduce your supply chain`s carbon footprint is by monitoring, recognizing and rewarding the carriers that demonstrate a commitment to improving their carbon efficiency. That’s becoming easier every day, as carriers across all modes are not only taking steps to improve efficiencies, they are also doing a better job of communicating that.

Digital freight forwarding is another way to ensure that you are maximizing the capacity of carriers and reducing empty runnings. Digital freight forwarding platforms connect trucking capacities with shipments at any given time.

  •         Efficiency – It doesn’t matter if you are a forwarder, carrier, or some other logistics company, there’s always more you can do to make sure you aren’t creating unnecessary pollution. Some areas to consider are shipment consolidation, selection of routes and choosing vehicles that deliver more revenue tonne kilometers and generate lower emissions. For asset-light operations, there’s plenty of emissions reductions to be gained from information-sharing, planning, and forecasting.
  •         Talk is cheap – but incredibly valuable if you’re doing it right. Your customers might not realize how their behavior is generating pollution, but if you work with them, you can pinpoint and correct bad habits. For example, you can help your customers identify areas where they can consolidate, use more efficient packaging, or chose slower, less carbon-intensive shipping options.
  •         Don’t be afraid to brag – your company is an important part of an industry-wide conversation that’s taking place, and your efforts to go green compel others in the industry to follow suit. All the major express companies and 3PLs have widely publicized carbon reduction programs. As e-commerce pushes the logistics industry into the spotlight, it’s a great time to promote your company’s efforts.
  •         Carbon offsetting –  Offering carbon offsetting mechanisms in your product portfolio, such as surcharges, lets your customers know you are serious about cleaning up your act. That also addresses the externalities problem we mentioned earlier, because, if your customers want environmentally friendly products, they won’t mind paying for them. It’s all about marketing and communication.

Every company must strive to be sustainable and efficient. Whether it is finding a more efficient way to communicate or cutting down on packaging, sustainability and efficiency go hand in hand. While it’s easy to dispense advice, effecting change on the ground isn’t always so easy. That’s especially true when you’re trying to manage a large-scale operation like a supply chain. But, these goals are within your grasp, especially today thanks to digitalization of the supply chain.

InstaFreight is a digital freight forwarder and proud to be a winner of the prestigious Eco Performance Award. The Eco Performance Award is the leading European award for sustainability in the transport and logistics sector, and our nomination reaffirms how important sustainability is to us.


Logistics Models Explained: 1PL through 5PL


Logistics as a term originated in the military. Initially, it was used to define troop and equipment movements in the various areas of military operations.

Today, logistics is an integral part of Supply Chain Management. It involves the process of planning, implementation, shipping, and storage of goods. The aim of an operation is to move and store products in the most efficient and cost-effective way. Transportation may include both, the forward and reverse flow of goods.

The entity that offers and provides the services as mentioned above is called a Logistics Services Provider. In the provision of logistics services, there are a few different logistics models and logistics service providers. These are explained below:

1PL – First Party Logistics Services Provider

When the manufacturer, producer or exporter of the goods takes care of the transportation and logistics services themselves, then this model may be termed as First Party Logistic Model (1PL). In these events, the service provider is a First Party Logistics Services provider.

The manufacturer, producer or exporter of the goods normally handle all activities. They use their own company departments and own assets, such as trucks, trailers, warehouses, etc.

2PL – Second Party Logistics Services Provider

In some cases, the manufacturer, producer or exporter of the goods may outsource the provision of transport and warehousing services to a logistics services provider. However, it retains the control and administrative management of the business themselves.

The logistics service provider generally owns and operates their own assets in this model. This model is known as Second Party Logistic Model (2PL).

3PL – Third Party Logistics Services Provider

When the 2PL logistics services provider appointed to handle the transportation and warehouse operation further outsources the services (in part or in full), then this model may be termed as a Third Party Logistic Model (3PL). In such events, the service provider is called as a Third-Party Logistics services provider.

The third-party logistics model is a common model used in commercial shipping today. This model may also include a variety of other services such as freight forwarding, customs clearance, weighing.

As per the definition of The Council of Supply Chain Management Professionals, a third-party logistics service includes transportation, warehousing, packing, freight-forwarding, cross-docking, and managing inventory functions.

Clients that use one or more third-party logistics services provider usually enter into a long-term contract. The agreement(s) allow(s) them to measure, evaluate and take corrective actions relating to the performance of both, the supply chain and the third party logistics service provider.

4PL – Fourth Party Logistics Services Provider

When the manufacturer, producer or exporter of the goods outsources the operational handling of the transportation, warehouse service and also the administrative management of the business themselves the model may be termed as the Fourth Party Logistic Model (4PL).

In the Fourth Party Logistics Model, the fourth party logistics service provider handles the entire supply chain operation. The main characteristic of this model is that the logistic service provider operates a non-asset-based business model as they do not own warehouse or trucks or other assets used to provide the service.

A fourth party logistics model is more integrated than the most common third party or other logistics models. It also involves the administration management and monitoring of the logistics processes.

5PL – Fifth Party Logistics Services Provider

There is also another logistics model which employs the use of supply chain networks. This is called the Fifth Party Logistic Model (5PL) which happens when there is a switch from supply chains to supply networks.

A 5th party logistics provider may consolidate the demands and bulk volumes of 3PLs and 4PLs. It negotiates favorable rates and services with service providers such as transporters, carriers, airlines, etc. It also provides strategic, innovative logistical solutions and concepts.

The application of logistics services to a business also includes the provision of a framework for planning, implementation, and delivery of several aspects of a supply chain. This includes materials, services, information, and capital flow that require planning, delivery, scheduling, and tracking.


Logistics services have developed and evolved rapidly in recent years. They are quite dependent on digital technologies and solutions. Big Data, IoT, digitalization, digital tracking, have become critical in providing an efficient and universal method of planning, scheduling, and tracking a shipment through the supply chain. The increased usage of intranet and Internet technologies related to shipment tracking, coupled with the interdependency of information and technological innovations have transformed the provision of logistics services. Integrated logistics service models starting from the order desk to the point of delivery will continue to service the global industry forever.

Fresh Trucking Capacity in Tight Market Situations

Trucking Capacity

Trucking companies spent a lot of time on the phone last year telling disappointed customers that they could not carry out their shipments. “During this year’s peak season, our priority was making sure our large, long-term customers made their shipments on time,” one manager explained.

It was a frustrating period. But, the success of a relatively new shipping model – digital freight forwarding – points shippers and trucking companies alike towards a new strategy. A solution which offsets the frustrating delays and capacity crunches.

It is worth backing up a few years to add perspective, because it is not trucking companies, per se, who are at fault here. In Germany, ‘heavy goods vehicles’ sales have been in the double digits for three years running. Capacity is actually rising. What has happened, is that a whole new category of shippers has entered the market, driven by e-commerce and a shift in consumer habits. And, like a first date, these new market entrants and trucking companies are both trying to figure each other out. Logistics is a complex business, and many companies are just getting started.

In the medium-term, demand for capacity is not likely to subside given the latest round of trade data released by Germany’s statistics office. November trade figures exceeded expectations, with industrial output up 3.4 percent month-on-month. Exports were also up, more than 4 percent month-on-month, while imports were up over 2.3 percent.

In a digital economy we live in today, it follows that the response to this increased demand and the capacity crunch would be internet-driven.

In years past, supply chains were relatively stable with predictable operations. Shippers calculated demand and booked capacity far enough out. Thoughtful planning ensured products were delivered in full and on time. Then, industries like e-commerce and customer trends like “buy-it-now-have-it-now” came along, and it became harder to plan ahead.

Time Is Money

Let’s throw together a hypothetical situation. A microbrewery – let’s call it Microbrewery X – based in Berlin, debuts a new style of beer. The product quickly gains nationwide attention due to a savvy viral advertising campaign. Within days, retailers and bars are clamoring for the new product. The microbrewery in question goes into overdrive, producing more product. But, in today’s market, if Microbrewery X can’t get its beer to customers quickly, consumers will move on to the next fad. There’s a small window of time. Microbrewery X suddenly needs to scale up from a citywide logistics network to a national one. Or, perhaps, even international, once other nations get a taste for the product.

The logistics manager from Microbrewery X has a few options. He can call around to conventional freight forwarders, to see if they have the capacity – but trucks are only available a few weeks out. It is even more likely that our manager will be rejected because his volume is “too small”. Anyone who has gone through this process has faced this sort of rejection.

Microbrewery X Needs to Get Their Product in Motion Right Away

There is a third option. Our logistics manager turns to digital freight forwarding, which is as easy to use as downloading an app and signing in. From there, digital freight forwarders, like InstaFreight, connect shippers to truckers, in real time. They set up end-to-end delivery solutions in minutes.

Digital freight forwarding is successful. It applies the 24/7 ridesharing app approach to freight, with the same transparency and instant pricing you get when you get a rideshare to the airport. In any given city, dozens of smaller trucking companies have idle capacity. However, size of their operations makes it hard for them to market directly to shippers. And, vice versa, shippers can’t easily reach these carriers.

By connecting these parties on one platform, a digital freight forwarder and the applied technologies open up a pool of trucking capacity that the shipper could not reach before. This is a new level of granularity. It brings companies, even with five or fewer trucks into play. The model helps shippers uncover capacity they would not find otherwise. While that’s technically not “new capacity,” it certainly feels that way when there is a tight market.

This is a significant distinction. These smaller operators represent a large share of Europe’s trucking companies, and they are a growing segment of the market.

It’s a Win-Win Situation

In a tight market, large carriers prioritize their established customers, pushing small shippers to the margins at the worst possible time. During the contracting season, big shippers typically reserve the necessary capacity. For smaller shippers, that is not an option.

Digital freight forwarding is changing the market as we know it. It provides efficiency in the supply of trucking capacity.

Digital freight forwarding platforms also allow smaller trucking companies to play in larger markets by linking them with a whole new group of customers. Carriers can take on shipments that align best with their expertise and transport routes.

If there is untapped capacity, a digital freight forwarder is going to find it. The database is electronically connected to thousands of carrier partners with a vested interest in filling their trucks.

Results are tangible for shippers as well as they can focus more on their core competencies. They are free from the time of finding capacity, negotiating prices and services.

In short, using a digital freight forwarder is like having an on-call trucking service. And that is a game-changer especially for small and medium-sized companies that don not have their own logistics infrastructure.

A “one-stop shop” to overcome tight trucking capacities, peak seasons, and obstacles to expansion.

Supply Chain Innovations: What to Watch for in 2018?


How will consumer trends and new tech impact supply chains in 2018?

When computers first started showing up in workplaces decades ago, it wasn’t immediately apparent how transformative their presence would be. But, half a century later, our jobs would be impossible without them. What is the next transformative technology? Where is the market shift that defines the next decade?

In logistics and trucking, we carried on for years using outdated “technologies” – yes, paper, mechanical pencils and fax machines – but over the last few years, changes in the market and consumer expectations have forced this notoriously backward industry to embrace change like never before. The recently closed EUR 8 million round of Series A funding by InstaFreight is part of a larger trend, as VC funding chases one of the most promising intersections of technology and trucking tech startups. According to CBInsight, trucking tech startups, for example, were on track for their first billion-dollar year in cumulative funding in 2017.

Trucking Tech Annual Global Financing History - Supply Chain Innovations: What to Watch for in 2018?As 2018 begins, the supply chain is more central to the global economy than ever before. This time it is reaching into homes, workplaces, and schools, underpinning every facet of the economy. At InstaFreight, we experience this change every day which, in our opinion, is only the beginning. Here are some areas of supply chains where that evolution is most apparent:

Deliveries Define Reputations

Ten years ago, when you needed a new pair of shoes, you went to the local shoe store, where an employee would help you pick out the appropriate footwear. The cashier would ring up your sale, and voilà you were out on the street with a new pair of kicks. A few years later, we started buying everything online, and instead of clerks and cashiers, customers’ primary interactions were with the logistics companies that delivered their online purchases to their doorsteps. The delivery man has become the face of shippers.


B2B e commerce revenue - Supply Chain Innovations: What to Watch for in 2018?

Delivery companies are investing in making this interaction as meaningful as possible. Every interaction is a data point that helps improve the next. A decade ago, an ill-tempered clerk could cost a company lost sales, but in 2018, a botched delivery can send customers elsewhere. What’s new this time around is that companies (logistics providers)  that historically worked behind the scenes are the new faces, not only of customer service, but sales as well.

The last mile of the delivery will only grow in importance. As trackability of shipments improves, logistics companies will make their services more proactive. They will alert both, delivery people and customers on ETAs, potential delays, and obstacles. Shippers that are looking to optimize their customer experience are aware of this, and they will be on the lookout for delivery partners who know their markets, have the capacity, and can ensure successful deliveries.

Robots are the New Normal

With annual global e-commerce sales on track to hit $4.5 trillion, automation is the only way for shippers and logistics companies to handle these new sales. While there were plenty of stories that broke last year about newer and faster robots on warehouse floors, it has been the acquisitions of robotics companies over the last few years that underscore how big this trend is. Prime examples of this are Amazon.com’s Kiva Systems buyout back in 2012, and German forklift maker Kion Group’s more recent acquisition of robot maker Dematic for about $2.1 billion.

In 2018, we are going to see the results of these robotics trials, with more companies removing humans from the warehouse floor.

The Sharing Model Promotes Excellence

The sharing model is going to go mainstream in 2018. As more business processes are automated, companies will migrate to platforms that can provide flexibility and visibility to their customers, while ratings and performance metrics will help delivery companies excel. We are already seeing this happen in trucking, where the digital freight forwarding model has unlocked small truck fleet capacity, at competitive price points and high-level customer service.

That is great news for smaller trucking companies. Online freight platforms like InstaFreight can connect them with shippers. Moreover, the transparency of the sharing model also rewards specialization, allowing trucking companies to focus on routes or deliveries that they excel at. For shippers, this translates into more reliable, easily manageable and more competitive logistics programs.

As more operators integrate their fleets into these systems, we’ll see that trend pick up the pace. That is all the more pressing due to a looming driver shortage facing carriers of all size. Online-freight platforms maximize the utility of truck fleets in a way that individual operators can’t.

More Data Means Smarter Decisions

Artificial Intelligence will take over more and more decision making, proactively mitigating against disruption, and moving towards more economical routes and modes.

Here is how that’s going to work. As machine learning grows increasingly complex, computers can already make better decisions than supply chain managers, in some cases. For transportation companies, this has huge implications, especially when it comes to route and capacity planning. Predictive analytics will soon allow machines to automatically place orders based on a customer’s ordering patterns, which means companies can anticipate surges and bottlenecks. On the proactive AI side, real-time data irregularities indicate a disruption long before people take notice. Much like Waze uses AI to redirect and mitigate congestion in real time, logistics AI could anticipate and defuse a potential cargo jam without humans ever needing to know.

That is just one area where AI is about to shake up logistics, because more broadly speaking, this new technology leverages the routine, and the predictable, allowing managers to focus on business processes where humans excel: innovation and interpersonal transactions.

One thing is for certain about the year(s) ahead – changing markets are going to reward the technology driven company. Having said that, technology bets will need to be backed up by serious market knowledge.  


The Year 2017 in Logistics and a Few Bold Predictions for 2018

predictions 2018

The dynamics of 2017 have put the logistics industry on course for even more change in 2018

Historians will spend decades talking about 2017. Although they did not always grab headlines in the way that political events did, the logistics industry experienced an equally historic year, and we will be experiencing the implications for years to come. But before we delve into what those implications might be, we need to examine the last twelve months and identify correctly what those defining trends were.



People have been talking about sustainability for decades. In logistics, that conversation took on a new urgency in 2017, one that required us to expand the scope of what it means to be sustainable – because it is a lot more than just recycling at the office, it means adopting new technologies and business practices.

There is a reason the spotlight is on transport and logistics – it is one of the most polluting industry after major emitters such as the energy sector. The UN dedicated three of its “Ten Principles of the UN Global Compact” to tackle the environmental impact of business pollution, forcing some serious introspection on behalf of the industry.

There is a social sustainability component as well. As one sector after the next transitions towards the ‘gig-economy’ model, truck drivers are facing growing insecurity, as well as worsening conditions, making jobs like trucking increasingly unattractive. And with looming labor shortages, trucking companies are being forced to reconsider their view of drivers as modern-day indentured servants, in favor of one that treats drivers as long-term assets and partners.



Pretty much every conference worth its salt this year had at least one panel dedicated to digitalization. With cloud computing and logistics software finally within reach (and affordable), the industry got on board, recognizing the efficiency gains at hand, due to cost reduction and time savings.

But digitalization was not just about getting rid of paper in favor of a tablet computer, or using APIs to connect partners along the supply chain – it also gave us a roadmap to operational integrity, using new sources of data to pinpoint bottlenecks and security weaknesses.



We spent the last twelve months watching as this new form of encryption and data sharing went from theoretical data sharing to the must-have technology in the industry.

What makes blockchain so crucial in 2018 and beyond is its ability to secure data. With blockchain, shippers, forwarders, carriers, and everyone in between can control who sees what data, while creating an unforgeable ledger of all transactions. That means if a shipment of pharmaceuticals experiences a temperature excursion, everyone is going to know, and the responsible party is going to be held accountable. And, on the flip side, blockchain means that shippers won’t have a hard time identifying high-performing partners.



It has been a long time since we have seen this sort of demand for available freight capacity – but it is not strictly an equipment deficit. In fact, there are still many trucks on the road with unused capacity. Meanwhile, shippers struggle to find carriers with available capacity where and when they need it. Cooperation fills the information gap, expanding the market-scope of all, forwarders, carriers, and shippers.

InstaFreight Is at the Epicenter of These Trends

We are future-focused. We are doing our part to make sure we are moving freight in a world that we would want to pass on to our children. That is why we are so honored to win the prestigious Eco-Performance Award, in recognition of our efforts to promote social, ecological and economical sustainability – both as an organization and across the industry.

As a digital freight forwarder, digitalization is in our DNA. The events of this year, including a series A funding round of EUR 8 million with a private investment company, really drove that home, as investors recognized the importance of our digital strategy.

Our digital solution provides end-to-end operational visibility and ensures instant pricing. Our pricing algorithm, in particular, caught the eyes of PYMNTS.com editors too.

It was also an excellent year for cooperation here at InstaFreight, with the launch of a union with consolidated cargo network CargoLine. Building up our own network of carriers for consolidated cargo would not have made sense. For our customers, the cooperation with CargoLine provided instant access to all, technology, high-quality carriers, and most importantly, trucking capacity.

The Pace of Change Is Only Going to Increase in the Year Ahead

Nobel Prize-winning physicist Nils Bohr once quipped that “prediction is very difficult, especially if it is about the future,” and we can’t help but agree with him. A few years back, most of us could not have anticipated how impactful technologies like blockchain and big data were going to be, but with so much happening, it is worth at least considering the impact of current trends on the future.

Digitalization of supply chain and transportation will continue which means a lot of technologies that are currently in beta will be an integral part of our operations, soon. AI, for example, is already using big data to make shipping decisions, and those transactions will increasingly be conducted via blockchain.

Digital freight forwarders are also going to be a lot more visible in the year ahead. There is a sea change underway, and just as travelers migrated to the internet for their ticket purchases, the freight industry is ripe for a change. We saw venture capital firms cotton to this idea over the last year, and in 2018, digital freight forwarding will only increase in attractiveness.

The Amazon effect is not going away anytime soon, but what is different this year is the sheer scope of e-commerce. With volumes surging across modes, the logistics business is going to have to reexamine the way it approaches everything from last mile delivery to cross-border customs clearance – expect some major changes in the year ahead.

We also do not expect the “fight” over regulations to abate in the year ahead. The feud over labor rules for truck drivers who travel across the bloc will continue to pit Eastern vs. Western European carriers. Eastern carriers are sticking to their criticism of Western European countries, who they accuse of creating barriers to restrict Eastern European truck traffic. Speaking of drivers, however, the looming labor shortage is drawing closer, and in the year ahead, especially Western European carriers will continue to face challenges hiring qualified drivers.

Since 2017 was the year that Brexit became a big part of our vernacular – well, also 2016 – it is worth revisiting, since 2018 will be defined by a broad spectrum of preparation efforts. In the year ahead, new customs and trade will test all, shippers, carriers, customs officials, regulators, and preparation will take on a critical role.

But whatever the future holds, InstaFreight can always fall back on our asset-light digital business strategy to capitalize on new trends and offset disruption. And regardless of capacity crunches, Brexit, and other market trends, one thing will hold true in 2018 – our customers and partners will continue benefiting from the convenience of booking and processing freight transport, end-to-end operational visibility, and transparent pricing.

So without further adieu, here’s to the new year!

Must Read Logistics Blogs 2018


Our TOP picks: The blogs that everyone in the freight industry should have bookmarked

The freight handling business has never been as dynamic as it is now, and with each passing month, the list of new technologies and industry defining events expands. Looking back on 2017, we saw ocean freight tank, air freight soar, and for overland, Tesla’s new trucks have freight companies scrambling to catch up. Mergers and acquisitions have been shaping the industry as we know it, new technologies have already and radically changed the freight industry, and will continue to do so as the technology develops further. Some worry that robots are taking human workers out of the line while others think that it is just the next necessary step in the industry’s (r)evolution. Blockchain technology also bears mentioning as it will play a considerable role in shaping supply chains in the future. Very exciting!

In short, freight is moving faster, getting smarter, and more responsive to the market. These new changes will undoubtedly provide a challenge for even industry veterans. Staying abreast of these developments is just as challenging, and that’s why we at InstaFreight have compiled this list of news outlets that go above and beyond, delivering the latest industry news, and providing insight that helps us understand this rapidly changing market.

While we do our best to keep you informed about the events that shape our industry from around the world, we simply could not do it alone. We would like to thank the news sources and the journalists who keep them running for bringing us the latest news, industry trends, and expert opinions.

Deutsche Verkehrs-Zeitung (DVZ)

This German-language news outlet delivers news and analysis for logistics, transport, freight and toll, standing out in part due to its exemplary political insight. It is the perfect read for managers that need to know how political and economic developments could affect their operations. You can follow them on Twitter at @dvz_news


The Journal of Commerce has earned a reputation as a source for timely news and insight across all modes of transportation, breaking important logistics-related stories and following up with analysis that takes readers deep into the narrative. When cyberattacks struck Maersk shipping lines for example, joc.com was the go-to website for the latest developments. Follow them on Twitter at @JOC_Updates


This website should be in the bookmark bar of anyone in the freight industry that uses European overland services. Thanks to their wide coverage of topics from the latest freight technology, to legal developments that could have serious ramifications across the business. The VerkehrsRundschau has been covering the sector for more than 70 years, providing up-to-date, critical, practice-oriented information for specialists and executives in the logistics sector, as well as for transport logistics decision-makers. On Twitter, you can stay up to date at @vr_online

The Loadstar

The London-based Loadstar represents a new breed of agile multimodal coverage that keeps readers up to date on everything from airfreight markets through road freight to technology that is defining the sector. The website has also served as an important platform for discussion about industry trends, with Loadstar reporters leading the discussion about what’s next. Follow the Loadstar on Twitter at @theloadstar

The International Road Transport Union (IRU)

The IRU bills itself as the world road transport organization, promoting the interests of bus, coach, taxi and truck operators to ensure economic growth and prosperity. Shaping mobility policy and practice in over 100 countries, the IRU’s newsletter conveys more than just, ‘what’s happening,’ instead showing where the organization is investing its time and resources to advance the cause of its membership. It is a worthwhile read for logistics professionals that are interested in policy making and the nexus of government and logistics. Their Twitter handle is @the_IRU

Logistik Heute

This one is for you supply-chain wonks, but like any industry coverage worth its salt, Logistik Heute goes past the headlines to provide a nuanced insight into everything from labor and staffing, to transportation and storage of chemicals. There’s also e-commerce insight on this website, which is an important part of covering the industry these days. Follow them on Twitter at @LOGISTIK_HEUTE

Automotive Logistics

While some news outlets cast a wide net, Automotive Logistics sticks to what it does best – automotive logistics. But anyone familiar with that sub-sector knows that it is one of the most complex and dynamic markets to cover, and Automotive Logistics is up to the challenge. Catch them on Twitter at @Auto_Logistics

Transport & Environment

You will certainly find plenty of newsworthy coverage on Transport & Environment’s website, but what makes the body representing 50 environmentally conscious stand out from the crowd is its cogent opinion and advocacy positions. “Our job is to research, debate and campaign with the facts available, the organization says, but in 2016 Transport & Environment expanded their scope to expose the real impact of transport on our climate, environment and health. Join their 30,000 followers on Twitter at @transenv

The Chartered Institute of Procurement and Supply (CIPS) 

The CIPS is the leading global organization serving the procurement and supply profession. Their website is a great place to learn about best practices. CIPS is providing a wide range of services for the benefit of members and the wider business community. The organization’s website is also a great place for people who want to stay up to date with the latest trade developments, like Brexit, and to hear from CEO’s at the helm of the industry. They have got an impressive 13,000-plus follower count on Twitter, @cipsnews, and it is a great way to stay informed.

DPDHL News ( DPDHL News )

Everyone’s favorite integrator is passing on its industry expertise via its news portal. This is the website you’ll want to check out if you are following the way how e-commerce is changing the industry. You can also follow them on Twitter at @DeutschePostDHL

European Automobile Manufacturers Association (ACEA) 

Backed by 14 Europe-based car, van, truck and bus makers, the ACEA’s blog delivers industry insight and intelligence, sourced from a variety of institutional, non-governmental, research and civil society partners. With that sort of expertise on board, their updates are a must-read for followers of the industry. Then, there’s always Twitter to catch up on what they are doing, follow them at @ACEA_eu

International Transport Journal (ITJInternational Transport Journal)

This 75-year old source for news and insight is a ‘household name’ for industry coverage if, like us, you see this industry as one big family. And if that is not the case, you are still going to get a lot out of their broad range of coverage. From freight forwarding to every mode of transport that you can imagine, the ITJ should be a part of your daily blog-roll.

WHU Inside Business

If you are tired of reading – and after all these recommendations, that is entirely possible – you are going to appreciate WHU Inside Business, a YouTube channel offering insights directly from executives and managers in the areas of digitalization, supply chain management, and finance. After you have watched interviews that take you the heart of the most pressing industry matters, click on over to their Twitter account and follow them at @whu_ib

International Forwarding Association

This blog comes courtesy of a network of more than 40 independent, small and medium-sized forwarders throughout Europe. That is also the angle of their curated news, European-oriented forwarding news that gives readers the granular details of the business.

Logistics Business

This blog takes you deep into the warehousing side of the logistics business, so regardless of your role in the supply chain, there is something for you on this website. You can also follow them on Twitter @LogBusMag


Last, but certainly not least, SupplyChainBrain is a great place to learn about the latest industry innovation, from the experts who make it happen. Follow them at @SCBrain


We have a lot to be hopeful for in 2018. As for you, our readers, we would like to thank you for following us and letting us keep you in the loop. Thank you! Stay tuned, follow us on Twitter and we will keep you up in the know with the latest and greatest logistics and supply chain news.


The Robots Can’t Come Fast Enough!


When an English weaver’s apprentice named Ned Ludd allegedly smashed two stocking frames in 1779, his actions inspired a movement known as the Luddites, workers who destroyed machinery that they said threatened their jobs and livelihoods. More than two hundred years later, professionals across the economy are nervously eyeing headlines trumpeting automation, and wondering to themselves – are robots coming for my job next?

In logistics, this trend is especially pronounced. Every day, more and more conventional freight forwarding task move online, and robotics advances could eliminate humans from the warehouse floor in the next decade, trucks will one day drive themselves, and drones could handle those complex last-mile deliveries.

All that justifies some nervousness, but there’s a lesson to be learned from those 18th century rebels, and it’s certainly not the one that Ned Ludd and his followers would have expected, because just as the industrial revolution created scores more jobs than it created, automation is part of a larger socio-economic trend as well, one that we’re just beginning to grasp.

It turns out, those robots aren’t “taking” jobs. Instead, they are filling a role created by the very technological advances that brought them into existence.

If this is all starting to sound too philosophical for a logistics article, don’t worry. It’s actually as simple as remembering that those “advanced” looms in the 18th century Britain were actually part of a bigger picture. New machinery like the looms allowed companies to manufacture more textiles, at cheaper prices, opening the market to consumers who otherwise would not have purchased textiles.

That same dynamic impacted pretty much every market. Sure, certain trades such as the people who crafted horse buggies saw their sales decline, but that was around the time that technological advances made car manufacturing and sales possible. And now that people were buying cars, there were suddenly millions of new jobs to fill. That meant hiring people to build more roads, gas stations, bridges, the list goes on…

This isn’t a history lesson on the industrial revolution, but those lessons are worth bearing in mind as we turn to robotics, and fit them into a broader trend of artificial intelligence, the internet of things, and e-commerce.

Computers Changed the Game

The job market evolves in response to purchasing decisions, and how those products are purchased. With e-commerce, it is often said that the brick-and-mortar storefront moved into people’s homes, via their computers, but that’s only part of the equation. The storefront also took the form of logistics companies because rather than interacting with a clerk, consumers started dealing with integrators, forwarders, and last-mile delivery companies.

Here’s where it gets interesting – the decline of brick-and-mortar actually created jobs, by the millions! In the US, the Progressive Policy Institute found that from December 2007 to May 2017, e-commerce created 397,000 jobs in the country, while at the same time, traditional retail only shed 76,000 jobs. That’s a net gain of over 300,000 jobs.

In Europe the picture is identical. Amazon announced that its expansion into Europe would create 15,000 new full-time jobs in 2017. That puts the European-based workforce of the US retail giant at more than 65,000 by the end of the year (2017). That’s just one company. In trucking, the continent is facing a looming labor shortage, while consumers are increasingly opting to click, rather than walk.

On a global scale, the logistics market is expected to grow from US$8.18 trillion in 2015 to US$15.52 trillion by 2023, growing at a CAGR of 7.5 percent from 2015 to 2024. In volumes, that’s a market growth from 54.69 billion tonnes in 2015, to 92.10 billion tonnes by 2024, growing at a CAGR of 6.0 percent over the same period.

Simply put, the current labor pool can’t meet that sort of demand, and automation is the only way forward.

So, What Happened?

Advances in computer technology spurred a 21st-century version of the industrial revolution, and by reducing the time and effort required to purchase goods, computers allowed consumers to purchase more goods. It turns out people’s aversion to shopping was not just the price tag, but instead, a complex interplay of opportunity costs such as transit to the store, time-intensive return policies, and lack of choice at individual outlets.

There’s a complex and costly logistics response to this new trend, and companies are struggling to meet surging online orders. They’re struggling in a number of ways, but one consistent challenge is providing the manpower to sort and ship those millions of packages that, simply, didn’t exist a decade ago. That’s a whole new business process that needs addressing, and whatever fills that demand will be the first solution there. As 2017 comes to a close, it’s increasingly likely that robots will be the solution.

The industrial revolution certainly came with its fair share of negative externalities, ones that drove home the importance of sound governance and regulations. Hundreds of years later, advances in computing and automation are likely to do the same, but this time around, we’re better prepared to meet the challenges, but to do so, the industry needs to attract talent, and that’s a challenge.

Those hundreds of thousands of workers on warehouse floors across Europe are the first place to start sourcing that talent, and it’s those robots that will make it possible because soon, logistics companies will be able to use their hiring firepower to attract more qualified workers to take on the growing role of logistics.