While it’s no surprise that the pandemic has been good for e-commerce and logistics — Amazon’s sales were $96 billion for Q3 2020, representing a 37% year-over-year increase — COVID-19 isn’t solely responsible for advancements in the logistics industry.
While many believe that the pandemic hastened the adoption of technologies that can source, pack, and ship products at scale faster than ever before, the logistics industry had already been hard at work developing and implementing a broad range of technologies long before the arrival of COVID-19.
Digital transformation was well underway in the industry as players explored ways to capture more revenue. According to Material Handling and Logistics magazine, there is $1.5 trillion of value at stake for logistics players and a further $2.4 trillion worth of societal benefits resulting from widespread digital transformation in the transportation industry.
Let’s look at a handful of technologies in place before the pandemic that has served to reshape the logistics industry as we know it. Some of these technologies will continue to advance and give us a hint as to what the future might hold.
The Multichannel Consumer
Manufacturers, brands, and e-commerce companies have adjusted their technologies to help them engage more deeply with shoppers. For example, an e-commerce provider might maintain a Shopify website in addition to an Amazon Marketplace store, with both available via mobile platforms. As for sales, products might be sold as single units, bulk orders/wholesale, or subscriptions. Marketing dollars may be allocated to a broad mix of email, Google Shopping ads, Amazon Ads, Instagram, and the like.
These channels and associated technologies deliver more and more data on the customer and deeper insights into customer behavior — and the potential increased profitability — for the brand or e-commerce company. These analytics, often driven by machine learning or AI (artificial intelligence), can inform product sourcing, pricing, manufacturing, packaging, and distribution investments.
Logistics providers who partner with e-commerce companies on the fulfillment side are increasingly integrating their systems with their customers to deliver a more complete and robust picture of the product life cycle from manufacturing to delivery. Often, the systems can be customized to work with one another, as the packaging, shipping, and delivery of a product can be an essential part of the buying experience.
The Robots Are Already Here
Enter logistics robots (or machines that shuttle items around a warehouse). With humans’ help, the robots can increase efficiency by moving products from the shelves or bins to the packing and shipping area, removing a tedious task formerly held by humans.
The robots allow a logistics provider to shorten lead time, improve service quality, and scale operations. Robots or robot-driven technologies have already proven to be an essential part of the value chain. “These are three critical attributes in our business,” explains Tom McCormick, chief information officer for Taylored Services, having successfully helped introduce fleets of robots into operations.
Further, in addition to efficiencies tracked by management, even warehouse floor associates feel that the robots make their jobs go more smoothly. The robots perform the more time-consuming parts of the job: walking (or running) items from the shelf to the packing and shipping area. The human workers can attend to the more analytical parts of the job, such as prioritizing tasks and handling complex customer care issues.
There’s an App for That
Shipper-driver matching apps, such as Uber Freight, Convoy, and Loadshop, have been around for several years and have gained popularity. Like Uber and Lyft for consumer ride-hailing, these technologies are an introduction system to match drivers and trucking companies with different routes or loads. This increases efficiencies because trucks do not need to remain idle, and extra shipments and deliveries can get out the door faster. These apps have helped transportation companies of all sizes survive the pandemic’s turbulence and have even helped logistics providers maintain their transportation networks.
Driverless Trucks
While the general buzz of driverless cars may have died down from the noise just a few years ago, driverless trucks are currently being tested. They could very well become a significant portion of the logistics industry’s technology outlay in years to come.
Autonomous trucks rely on cameras and sensors to provide vast amounts of data, so the vehicle’s computer software knows what’s happening up to 3,000 feet up the road. Some vendors claim that a self-driving truck can react to emergencies 10 times faster than a typical human. Improved route efficiency and safety means shipments get to customers more quickly.
With robots in the warehouse, driverless trucks will not take away trucking jobs but give the autonomous truck owner a promotion. Instead of being on the road, the truck owner can instead be looking for spare freight (perhaps with freight apps, cited above) or interfacing with customers, increasing satisfaction and increasing the number of contracts.
3D Printing
When extra parts, packing, or even products are needed on the fly, 3D printing can be there to the rescue. While on-the-spot 3D printing might not be suitable for creating an entire inventory, auto manufacturers can use the technology to “print” spare parts. Fashion brands can create components of their clothing on the spot when needed. This technology speeds up logistics, leading to faster fulfillment of orders and higher customer satisfaction.
The Internet of Things (IoT)
The IoT refers to a network of devices or physical objects with embedded microchips, software, and other technologies that enable them to communicate with one another or with another network of devices.
The logistics industry has been using IoT devices anywhere it can to collect data, streamline processes, and reduce unnecessary workloads. For example, IoT or “smart” devices may be installed at specific points in a warehouse to monitor human movement, the weight of products on their shelves, or items’ proximity to other things.
Such data can warn warehouse managers and even their customers about ordering issues. With other automation technologies, shelves can be replenished automatically thanks to the data collected by IoT devices. In this way, the supply chain is more responsive and efficient, and goods can be shipped to customers faster.
The Final Say
Technology indeed continues to reshape the logistics industry. Claims that automation and robots take away jobs are unfounded; technology can take care of the tedious tasks and enable human managers to work on more strategic, high-value projects. Humans can analyze the data and make decisions without being tied down to repetitive jobs.
Jake Wengroff writes about technology and financial services. A former technology reporter for CBS Radio, Jake covers such topics as security, mobility, e-commerce, and IoT.
References:
https://www.govtech.com/fs/Driverless-Trucks-Are-Already-on-Texas-Roads-With-More-to-Come.html
https://www.yahoo.com/now/amazon-earnings-q3-2020-202253026.html
https://www.arcadis.com/en/united-kingdom/arcadis-blog/natalie-sauber/the-future-of-logistics/