The logistics and transportation industry has become an open field where traditional logistics providers compete with new entrants for customers. Both are trying to consolidate overall supply chains around end customers to provide them with a seamless experience, price transparency, product tracking, and convenient digital services.
Software technology and logistics innovations have already become key differentiators that keep customers loyal, businesses efficient, and profits sustainably growing. Those who are stuck on legacy approaches and turn their backs on new transportation technologies risk lagging behind new market entrants. Innovation in logistics is strictly aligned with new customer-centric business models and helps unlock tangible value at each stage of the supply chain.
Logistics service providers should think about innovation as a determiner of future success. If they don’t, they’re in trouble. As the world finds itself between transformational decades both behind and ahead of us, trend foresight has never been more important. Many transformational trends are here to stay, while new ones constantly arise.
Let’s look at the key technologies that come in handy to meet customer demand and cover the growing need for innovation in logistics.
What’s inside:
- What logistics and transportation innovations are lurking around the corner?
- What we truly want from logistics innovations
- What’s next for logistics innovation?
What logistics and transportation innovations are lurking around the corner?
Traditional relationships between incumbent logistics companies and their customers are built on trust. But today, apart from trusting recognized brand names, customers want a human experience delivered by everyday technologies they’re used to. Also, they want to maximize benefits and minimize expenses on tools they don’t need. Customers want to be in the driver’s seat all the time.
What’s on the planning desks of innovative transportation and logistics companies for the coming years? There are plenty of options that can adjust your service right away as standalone solutions or gradually grow your customer base by providing a complete digital strategy for implementing an ecosystem of technologies built around customers’ needs.
Autonomous logistics and automation
Autonomy promises us a lot of positive changes along the delivery route, starting from automated collection of data on customer preferences and demand, continuing with automated order processing, and finishing with automated workflows at warehouses and throughout the delivery process. Recent transportation innovations related to autonomous trucks give logistics companies a chance to eliminate risks related to human error and increase the safety of goods and workers. But most of all, autonomy for logistics means transparency. Data flows from around the supply chain can be monitored in real time without human intervention, resulting in more efficient supply chains.
AI and robotics in warehouses and beyond
Robotic process automation is the natural consequence of autonomous logistics. The use of robotics for warehouse operations is efficient and safe. Robots for loading cargo and exoskeletons to reinforce human capabilities can be game-changers in logistics. Beyond that, artificial intelligence used for robotics systems can adapt to customers when communicating with them for ordering, invoicing, and dispute resolution. In this way, robotic automation can streamline not only routine operations but can increase sales and customer retention.
Continuous connectivity and IoT
Smart sensors installed in containers and throughout logistics infrastructure provide enough visibility. But this visibility means nothing without continuous connectivity between these sensors and a user IoT application that generates insights. There’s no doubt that the future will involve edge computing where smart devices operate independently from centralized systems. But when it comes to the overall traceability and resilience of innovative logistics, connectivity shows its true value. Timely actions on the go can save most costs related to cargo or vehicle incidents. Predictive maintenance based on real-time monitoring of vehicle conditions and route optimization based on road information depend hugely on connectivity between moving objects and planning systems.
5G and digital twins
When it comes to connected logistics services, recent advancements like 5G and LoRa can provide the stable connections required wherever cargo goes. But the true value of undisrupted connectivity gains its momentum for real-time adjustment of virtual supply chains. Virtual ports, warehouses, containers, and entire cities are the products of digital twins technology. And logistics innovation cannot happen without it. A digital twin is an accurate digital replication of an object’s physical features and functionality. At the same time, a digital twin should adjust to any changes that happen to the real object. Connectivity plays a huge role in aligning digital and real objects, whether those are containers, cargoes, or virtual roads.
SaaS models and digital platforms
Platforms make it feasible to target customers with value-added services that work together seamlessly and operate with the same data. With a platform, users don’t need to onboard to new services as they can access all the services within a single environment they need through one gateway. Everything the customers personalize for a particular business is applied to the new solution they connect with. Once they have optimized a single part of their logistics process, customers can continue their digital journeys using platform capabilities to work, collaborate, and develop in the same place. Running digital services in a cloud platform allows logistics providers to equip customers with solutions that meet their needs and can be accessed on a subscription basis. Customers win by eliminating costs and time for manually setting up IT infrastructure, while service providers grow their user bases and praise customers as the focal point of logistics services.
Big data analytics
Extensive quantities of data come from the complete ecosystem of digital touchpoints that supply chains are equipped with from head to toe. But is it good or bad to have so much data? Without intelligent analytics, all this data will become a headache for logistics providers. Data requires approaches and tools. Sorting, structuring, labeling, grouping, and processing data are the basic steps to introduce any innovation in logistics. After that, data can become a powerful input for other value-added logistics services.
Last-mile delivery with innovative options
Sometimes it seems the last mile lasts forever. Our cities are overcrowded, and when the traffic stops it seems time stops too. Deliveries within cities require a completely new approach. Where usual vehicles have problems getting through, other means of transportation can get to customers. Drones and micro-mobility transportation can save the day for logistics providers. Combined with automated services powered by robotics technology, swarms of drones can deliver packages from a big truck throughout the city in the blink of an eye. What do they need for this? Simple navigation, integration with your logistics software, and enough power to carry their packages.
Augmented reality
Augmented and virtual reality have come a long way from being fun technology to having real business applications in a range of industries. Starting from allowing customers to virtually try on clothes and ending with augmented warehouses with comprehensive images of stock locations, augmented reality gives advantages from every angle. Combining digital twins and augmented reality avoids overhead from unmatched packages and containers, increases the safety of cargo, and provides better visibility of defects than with the naked eye.
Blockchain and distributed supply chains
Customers don’t want to limit themselves to one delivery option. Their main demand is to get products as fast as possible, track them along the way, and ensure the highest quality. Logistics providers can cooperate with retailers and a wider network of vehicle fleets by distributing their orders between the most convenient delivery options for the customer. At the same time, distributed ledger technology for logistics will ensure traceability of product origins no matter who delivers the product.
What we truly want from long-anticipated innovation in logistics
Workflow automation, predictable outcomes, robust integrations, supply chain traceability, and enhanced data analytics have the highest demand in the logistics and transportation industry. Technological breakthroughs can change every aspect of logistics operations. But companies often focus on adopting an entire range of technologies. This complexity of transportation innovation makes digitalization an even more challenging task for the logistics sector.
The clue for introducing the right technology mix is hidden in what logistics providers want to achieve with innovation logistics. Technology can do much more than necessary. The logistics sector should find a particular goal to apply technology. Here’s a list of several major reasons to introduce innovation in logistics.
Customer interactions
Customers want to minimize unnecessary communication. They don’t want to be asked questions when their preferences don’t count. But most of all, they want logistics to look like their usual and cozy experience in everyday life. When customers order goods and get them the same day, they’re the happiest loyalists in the universe. Don’t you want the same for your logistics company? Technology can make it happen. With the goal of enhancing customer interactions with your service, you can tap into automation technologies, convenient last-mile delivery, and transparent tracking. If you don’t, your customers will switch to someone who offers services they need more.
Operations
This is where all businesses struggle the most. Logistics services are overwhelmed with operational tasks, from processing orders, managing the workforce, and maintaining vehicle fleets to matching schedules, building routes, and satisfying customers. Throughout all the routine tasks logistics companies deal with there’s one very new one. Processing massive data flows is becoming an integral operation of logistics businesses as much as their core delivery services. Analytics as a service has become the main driver for companies to introduce data-driven technologies for all operations related to data, from gathering to reporting.
Logistics services and delivery
Logistics services themselves require technological innovation. Emphasizing business growth, logistics providers leverage the power of digital platforms to collect solutions targeted at different logistics needs under one umbrella. The thing is that logistics now requires much more than a simple route from point A to point B. Customers demand much more. As businesses are starting to explore offerings of big retailers who are good at providing customer-centric services, logistics providers are in a hurry to deliver even better service. By uniting various services into a single cloud logistics platform, they can target customers who need a complete technology ecosystem around their business.
Shared capabilities
The sharing economy has suffered the most from the COVID-19 pandemic. Fewer people are willing to share vehicles or any other goods to avoid unnecessary contact and public interactions. On the other hand, the demand for shared logistics services is on the rise. Retailers may require specific delivery services only for last-mile delivery, as they already have their own trucks. Logistics providers require access to wider fleet capabilities to manage loads faster with a better focus on customers. The COVID-19 outbreak also caught logistics providers unarmed with containers stocked in ports and no possibility to return them even when empty. Business stopped. But shared containers with smart tracking technology could assist in situations like this by notifying logistics providers of free containers.
Sustainability
The world is changing, and logistics companies are starting to consider sustainable ways of running their businesses. Sustainability means taking a wise approach to transportation through cities, digitizing paperwork, reducing waste, improving fuel economy, improving driver safety, and using eco-friendly EV trucks for delivery. The goal of sustainable supply chains requires a lot from logistics providers, and technology can provide a solid basis to leap ahead. Regulating fuel consumption and measuring CO2 emissions to comply with regulations as well as geofencing areas on logistics maps are small steps toward bigger outcomes.
What’s next for logistics innovation? How to act from here
Technology and innovation in transportation and logistics can be overwhelming if you don’t know the ropes. Most often, IT and software capabilities are far from the focus of logistics providers. They would rather buy and struggle with ready-made products than establish scalable engineering organizations to develop, implement, and maintain their own solutions. Today and in the near future, logistics companies should learn how to partner with and trust vendors with specific expertise they’re lacking.
Partnerships and new models of cooperation that facilitate wider adoption of logistics technologies will give logistics players a good chance to make the future of supply chain management more predictable, sustainable, and profitable. A well-defined and well-structured cooperation model will unite the entire scope of logistics operations into a single technology ecosystem. Small and medium-sized product companies can cover the end-to-end development of separate components, while software service companies can bring all solutions under one umbrella.
The multiplicity of technological solutions mentioned above makes developing an end-to-end solution that covers all customers’ needs within one company rather cumbersome. But cost-effective partnerships can pave the way for innovative logistics.
Besides, companies should not overlook the standardization of software development for logistics. Standards such as ISO 9001, ISO 14001, and ISO 22301 cover almost every process at the organizational level. A lack of quality and security standards applied to logistics software significantly complicates integration between systems, which results in limitations to both separate products and the entire ecosystem of logistics solutions.
At the same time, integrating various components into one digital platform becomes more expensive due to the same lack of standards. The example of mobile network providers is illustrative. There are a huge number of software vendors who coexist within the ecosystem of a particular mobile operator. So why logistics provider could not do the same?
It seems that the future of logistics is two steps away, and there’s no way to hide from it. The first step we need to take is standardizing software tools and data, which can be achieved through consensus between large corporations. The second is integrating separate solutions into one ecosystem. This integration will open opportunities for product and service companies of all sizes. Time will tell whether large companies are interested enough in meeting this challenge by making such standardization profitable for themselves.
The challenges we see today are the main drivers of change. It’s best to start shaking the rust and mud from supply chains and introduce tech innovations rather than sit it out until the dust settles. The game begins now. Those who don’t hide will win.
If you understand the urgency of logistics and transportation innovation, we’ll be glad to assist you with innovating your services. Contact Intellias engineering, advisory, and IT organization transformation experts to introduce innovation in logistics.
