PHOTO COURTESY: TESLA MOTORS
So what exactly is digitized trucking? Imagine a time when trucks are traveling down the highway managed and guided by a central software platform. Imagine if that software platform was monitoring the health of the truck, trailer and driver. Imagine if that software platform was connected to other trucks and other shippers, and automatically matched cargo based on maximum profitable utilization of available space. Imagine if the driver wasn’t in the truck at all but in an office operating the truck with a joystick. Imagine if every truck was zero emission, optimally maintained and was never involved in a road accident. Well imagine no longer – every single one of these technologies is here today.
The Transformation of the Global Logistics Industry
Two eminent research and consultancy firms, Frost & Sullivan and PWC, see digitized trucking completely transforming the global logistics industry within the next 10 to 15 years. The two primary drivers are the explosion of e-commerce, which according to Forrester will be a $500 billion business by 2020, and global regulations forcing the industry to develop cleaner and more efficient trucks. Consumers want their products “right now” and they want them delivered in an environmentally friendly manner.
In order to successfully compete and survive in this new environment shippers and carriers have to become more agile and efficient. Only a combination of business model restructuring and technology can do that.
The Transformation of the Freight Brokerage
“Road freight is a $725 billion market in the US, and €395 billion market in the EU . The industry is highly fragmented, the top five logistics firms in the US earn less than 20 percent of the total revenue, and hence brokerage forms an integral part of this network. In US, freight brokerage is estimated to be worth $130 billion, while in EU the respective figure is €86 billion for the year 2015.”
The freight brokerage industry is notoriously opaque and cumbersome. It is ripe for disruption and there are numerous technology startups currently offering digital freight matching services including Convoy, Freightos, Flexport and Uber doing just that. These “automated on-demand freight brokerage solutions” offer significant benefits. The shipper gains increased efficiencies, cost savings and complexity reductions, while the carrier gains increased revenues and greater asset utilization.
The 6 Steps to a Digitized Trucking Future
PWC takes this one step further. It sees a future where the supply chain becomes digitized and fully automated in much the same manner as described in the opening paragraphs above.
Vehicle-to-infrastructure (V2I) communication will provide complete “self-awareness” for the truck via GPS tracking and connectivity with the road and other infrastructure installations. This will optimize traffic flows, automate routing, improve parking efficiency and safety and increase driver efficiency.
Vehicle-to-vehicle (V2V) communication will decrease fatalities and improve accident rates.
Remote diagnostics through continual monitoring of truck performance will enable the development of much more efficient maintenance schedules, considerably reducing truck downtime.
Autonomous driving will negate the need for a driver, reducing “driver error” caused accidents and reducing total cost of ownership.
The integrated supply chain. Modern manufacturers will have complete visibility and control of their supply chain from raw materials to production to finished goods to warehousing/distribution to the end customer, (as Apple currently does.) Digital trucks will become an integrated part of that supply chain and be automatically managed based on daily supply/demand requirements.
Automated freight matching. Connectivity to fleet management and shippers will enable automatic freight matching and increase asset utilization.
The new era of digitized trucking has just begun. It will completely transform the trucking and logistics sectors over the next 10 to 15 years. There is significant opportunity ahead for us all in the logistics industry.
If you’re interested in learning how shipping by rail and truck might better meet your freight transportation needs call New Mexico Transloading at 505 – 908 – 1911. We’d be delighted to have a conversation with you.