Next Technology Innovation for the Logistics Industry

Background of disruption

Uber has disrupted the cab marketplace. It has changed the way people hail cabs. Technology has been a game-changer across industries, and the transportation industry is no different. Owing to the boom in e-commerce, there has been an urgent demand for better utilization of trucks. Some of the barriers that impede the growth of the logistics industry are the lack of using available trucks optimally and charging arbitrarily. Besides, as tracking routes taken by the trucks are not possible, they have no accountability to their logistics companies.

The uberization of the transportation industry has led to the maximum usage of trucks and reduced costs. According to an Accenture report, uberization of the logistics industry has successfully brought down the costs by an estimated 10 – 20%, and 15% during the last mile delivery. Uberization ensures effective revenue allocation and effective use of available assets.

Smart start-ups in the logistics industry are equipped with machine-learning algorithms, hand-held GPS devices and cloud computing for seamless freight transportation. Truck booking apps have changed the way the logistics industry functions today, just as the Uber app has transformed the taxi industry. This provides the tech-savvy start-ups with the opportunity to adopt new technology and lead the way for the largely fragmented logistics industry [1].

Here are 5 ways why logistics start-ups should opt for uberization:

  1. Track trucks available in the vicinity

Truck booking apps, enabled with GPS, detect the location from where freight needs to be transported. This prevents the prevalent industry-specific discrepancy of shortage of trucks for freight transportation despite trucks being available within a short distance of the pickup location [2].

  1. Connect customers with the mode of transport

After detecting available trucks for freight transportation assignments, it matches the nearest truck with the pickup location. Hence, automation makes life easier for utilizations that require freight transportation services. These truck booking apps also offer a rating system for both the trucks drivers and clients of the logistics company. This further promotes quality of service, establishing and strengthening the client-business relationship. This leads to the fragmentation of the logistics industry enabling optimal utilization of available trucks [3].

  1. Hassle-free tracking of pickup and delivery destinations

The cumbersome process of keeping a track of the pickup and delivery destinations verbally or in the written form has been the accepted practise among the traditional and fragmented logistics industry. Truck booking apps have transformed the way businesses transport their freight on time in terms of memorizing and tracking destinations manually. The cash memo with the mentioned address getting misplaced, inaccurate addresses being communicated to truck drivers due to negligence or lack of connectivity over the phone were commonplace. Technology has made it possible for truck booking companies, drivers and businesses to keep a track of the addresses right on mobile apps, doing away with any scope of incomplete or incorrect addresses being communicated [4, 5].

  1. Track route

Truck booking apps assure complete transparency in freight transportation solutions by showing the route to be taken by the truck. Cloud-enabled automation enables the mobile apps to recommend the shortest and most secure route to the destination. The truck driver, the 3PL firm that the truck belongs to, as well as the utilization whose freight is being transported can track this route. This ensures complete transparency in the transportation system and makes the drivers accountable for quick and safe delivery.

  1. Indicate estimated time of travel

Truck booking apps offer further transparency in timely delivery of freight by informing the client about the estimated delivery date and time. It indicates traffic along the recommended route and the delay that they will cause. In case of prolonged traffic, apps reroute and shows the preferred way to the destination, along with indicating the extra time that this will take the truck to reach the destination.

  1. Generate the estimated bill amount

It is common knowledge that a fragmented logistics industry gives truck drivers the opportunity to charge businesses indiscriminately. Truck booking apps generate the total bill basis the weight of the freight to be transported, and the distance between the pickup and delivery destinations. This ensures complete transparency in the generated bill. Automated generation of the bill leaves no scope for manipulation or any other malpractices that is otherwise rampant in the industry. Additionally, it also eliminates chances of human errors by logistics companies.

  1. Enable online payments

After essential information about the addresses for pickup and destination has been added in the truck booking app, along with the details of the freight, these apps generate the bill online. These apps enable digital payments through Debit and Credit Cards, Net Banking and digital wallets. Analyzing the recommended route and considering the toll changes that need to be paid along the way, the total bill amount includes the toll charges too. Online payment prevents truck drivers from charging exorbitantly for freight transportation services.

Robots In Logistics

Traditionally the role of robotics was restricted to manufacturing, but with the widespread adoption of technology and customer demands evolving, the use of robotics will percolate to warehousing, packaging, handling, and even delivery and dispatch of cargo.

On an average it takes around four hours to either load or unload a commercial vehicle, when done manually. This process increases the time of delivery of the cargo substantially. However, if this process was to be mechanized, that is if robots were used to load and unload trucks, commercial vehicles could be en route faster and human errors could be minimized. According to a report by SupplyChain247, DHL robots present the potential to unload 500 average sized boxes in an hour.

Robots To Be In Charge

According to a Cerasis report, businesses are likely to make use of more and more robots while loading shipment into cargo trucks and while unloading them at the destination. Robots are also likely to drive higher efficiencies as regards the storage of goods and cargo is concerned.

Warehousing is set to benefit from robotics. If a DreamOrbit report is to be believed, 80% of warehouses in America use no significant form of automation for their warehousing needs. On an average, a logistics company employs over 1000 people to assist with the packaging and handling of goods. By leveraging robots, logistics companies are giving themselves the opportunity to lower operational costs and increase the efficiency of operations.

Humans And Robots Or Human Vs. Robots

While most fear that robots and automation could overtake jobs and make employees redundant, and with reports issued by the US government claiming that 1.7 million truckers could be jobless, the cause for robots and automation is further strengthened.

The trucking industry is worth $700 billion, and over one-third of the costs are used in compensating drivers. One of the prime reasons for logistic companies to adopt robots is to offer their services at a more competitive price, and as a result cater to a larger audience. So, instead of employing people to execute laborious jobs, robots will carry out all the heavy lifting as well as record data, minimize errors, complete the task in a shorter span of time, and at a reduced cost.

Strength In Numbers

According to IDC and Forrester reports, the worldwide spending on robots and robotic technology will reach the $188 billion mark by 2020. This will lead for logistics companies as well as shippers to benefit from a superior pool of shared intelligence. Omni-channel companies and eCommerce websites will turn to robotics for their warehousing, order fulfilment, and delivery needs.

Robotics is also garnering a lot of funding from government and private bodies. The US government alone has granted $96 million through university grants for R&D of robotics, while Amazon and Google have brought their interest in robotics to the forefront. China too is collaborating with Russia to build a robotics research centre worth $200 million.

There has been a lot of automation lately in the load booking industry. Like any other industry, the logistics sector too is interested in robots for the same reasons. Of course, faster computers, low-cost sensors, mobility, cloud technology, better batteries, and big data analytics have further fuelled the cause of robots and added to their value. What’s more, researchers and businesses are working together to make this technology a prominent part of logistics by developing efficient container unloading robots and trailer loading robots.

We have come way ahead of concentrating solely on automation through data-driven software. These software that offers valuable insights and powers important decision-making has been here for a while now. It’s time to look forward and experiment with newer and more exciting innovations. Right now, drones seem to be the answer.

Use Of Drones In Logistics Industry

About two years ago, an Audi sUVA commercial grabbed eyeballs with its futuristic presentation of transport drones, parodying the superhero, Terminator. It’s been some time that industries worldwide have realised that automation will drive their future. The prediction soon became a reality with Amazon’s 30-Minute drone delivery – driving home the immense possibilities of this tech innovation. Google X’s drone delivery system named Project Wing, patented and announced in 2014, targets a 2017 launch. DHL, the global shipment delivery service, has also been experimenting with the idea of drone delivery system called Microdrones.

Keith Kaplan, the Head and Event Organiser of the Unmanned Aerial Vehicle Systems Association believes that “The drone economy is exploding.” If Dave Vos, the Head of Google Vox’s Project Wing is to be believed, drones will be a safer mode of transport for freight than the aircrafts of the aviation industry.

It’s early days for industrial drones. The effective implementation of these in the logistics industry will serve as a safe and efficient means of freight transport. Today’s businesses understand the necessity of quicker delivery systems for ensuring brand loyalty from existing customers and acquisition of new customers. They collaborate with third-party logistics (3PL) companies for better supply chain management. No wonder, smart businesses are always on the lookout for updated technologies for improving their business outcomes. This in turn will enable them to pass a chunk of their increased profit margin to their customers, reducing the costs for services offered.

Image Courtesy: cyzerg

Automation and IoT has, therefore, emerged as the relevant technology that enhances the speed of delivery and accountability towards their customers. Here are some reasons how industrial drones will maximise the business efficiencies for the logistics industry:

  1. Tracking inventory with greater accuracy

Cloud technology has made it possible for businesses to trace data, take stocks and keep records of the same. Robotic drones take this a step further, ensuring more accuracy. They can be controlled by humans simply by activating the drone robotic assistant with the click of a few buttons.

  1. Quicker pickup & delivery

As Amazon’s 30 Minutes business model makes it apparent, delivery with record timings to nearby locations will become possible. It will also make the concept of same day delivery a reality. [5, 6]

  1. Makes returns & replacements hassle-free

Drones also make it possible for businesses to offer speedier service for replacement and returned shipments. The delivery process for replacements can be initiated when the cargo being returned is in transit. It guarantees faster turnarounds for quicker resolutions, removing e-commerce barriers.

  1. Automate moving of freight

Drones will do away with moving, sorting and loading of shipment from warehouses and unloading at the destination through manual labour. What’s more, multiple drones can be deployed for meeting increased demands of freight booking. It offers better flexibility in reconfiguring the pickup and delivery points, improving handling performances and reducing labour costs. A PwC Survey reports that drones are expected to help businesses save a whopping $125 billion, as evident from the graphical presentation below.

Image Courtesy: Business Insider

  1. Improved surveillance for reducing theft

It will be a superior substitute for traditional video cameras, as it will offer accessibility to places that cameras cannot reach out to. This empowers drones to survey warehouses and reduce thefts [7].

  1. Enhanced freight security

Besides being used as a freight carrier, drones can also be used for improving security of shipments. These specialised security drones keep a close eye on the cargo being transported via rail, road and waterways and also watch over ships loaded with high-value cargo. Some global freight transportation companies strongly believe that security drones account for about 44% reduction in the number of thefts in the first half of 2015. .

Selective references

[1] Kar, A. K. (2014). Revisiting the supplier selection problem: An integrated approach for group decision support. Expert systems with applications, 41(6), 2762-2771.
[2] Kar, A. K., Pani, A. K., Mangaraj, B. K., & De Supriya, K. (2011). A soft classification model for vendor selection. International  journal of Information and Education Technology, 1(4), 268.
[3] Chauhan, S.,  Agarwal, N.,  & Kar, A. K. (2016). Addressing big data challenges in smart cities: a systematic literature review. info, 18(4), 73-90.
[4] Bijwaard, D. J., van Kleunen, W. A., Havinga, P. J., Kleiboer, L., & Bijl, M. J. (2011, November). Industry: Using dynamic WSNs in smart logistics for fruits and pharmacy. In Proceedings of the 9th ACM Conference on Embedded Networked Sensor Systems (pp. 218-231). ACM.
[5] Kawa, A. (2012, March). SMART logistics chain. In Asian Conference on Intelligent Information and Database Systems (pp. 432-438). Springer Berlin Heidelberg.
[6]  Enrquez, C., Maqueira, J. M., & Bruque, S. (2017). Mapping the time. Method for logistics management software. Computers in Industry, 89(C), 1-12.
[7]   Albekov, A. U., Parkhomenko, T. V., & Polubotko, A. A. (2017). Green Logistics in Russia: The Phenomenon of Progress, Economic and Environmental Security. European Research Studies Journal, 20(1), 13-21.
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