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.