Digital Change: Why The Transport Sector Now Has To Rethink Fundamentally

The transport sector forms the backbone of today’s economy. However, the transport sector is lagging behind many other industries regarding digitization – and has been for quite a while. The good news is that this trend can be reversed. By using digital solutions, we can achieve efficiencies that have a positive impact on the economy, businesses, and the environment.

The transport sector connects businesses, streamlines supply chains, supports business growth and can foster green initiatives. However, transport processes can also inhibit such positive developments. This can happen when companies don’t pay attention and care to their transportation strategy.

Compared to many other industries, the transport sector is lagging in digitization – and has been for quite a while. Even before the pandemic, before the war in Ukraine, before the energy crisis and before increasing inflation and the rising cost of living. Or, to put it another way: long before many of us even realized the crucial role transportation plays in the global supply of essential goods.

In today’s transport market, many things are far from being as mature as they could or should be. Unused capacities, empty runs, a lack of flexibility, unnecessary waiting times, and silo thinking in the company cause considerable economic damage. In addition, underinvestment in digital transformation and digitization has led to high administrative burdens, an excess of manual tasks, gut decisions rather than data-based ones, and a lack of actionable insights. And as if that weren’t enough, unmeasured and uncontrolled CO2 emissions also cause significant ecological damage. In other words:

The good news is that this trend can be reversed. By using digital solutions, we can achieve efficiencies that have a positive impact on the economy, businesses, and the environment. In this way, we can bring transportation into harmony with the world. All we need for this is a fundamental rethinking in three core areas.

Collaboration

Collaboration is the be-all and end-all for companies in the transport sector. Because the resulting benefits can make a crucial difference: Trucks don’t need to drive hundreds of empty kilometers to pick up their next load when a car of the same type is probably discharged nearby. It’s time for shippers and carriers to connect, agree on common business standards, collaborate and leverage a single platform that enables network-wide interoperability.

The networking of shippers, load recipients, service providers, brokers, forwarders and carriers is essential if a cooperative transport community is to be created. Common standards and the enabling of interoperability open up new business opportunities for all players and thus lead to savings in operation. Only through collaboration will the transportation market gain the resilience and agility — critical components of any robust transportation strategy, according to the 33rd Annual State of Logistics (SoL) — needed to adapt to changing market dynamics and respond to unforeseen events.

Automation

Excel spreadsheets, manual searches, and endless searches for routes, capacities, and fares create an inefficient administrative burden. This devours valuable resources and does not ensure optimal results – quite the opposite.

To achieve this, it is time to no longer only collect data from the transactions made but also generate transactions from the available data. Overall, automated data-driven decision-making in a collaborative, cohesive network using options, historical patterns, current data, and forecasts is proven to improve transportation processes. Their economic impact is also taken into account.

Real- Time Insights

Control is at the heart of optimized and timely decision-making. It’s all about having the necessary insights at hand – visibility of CO2 emissions, access to spot rates, or an overview of capacity or ETAs for transport. Access to this real-time information combined with execution capabilities enables logistics companies to predict the future status of a load, intervene quickly when something goes wrong and control the efficiency of operations.

As highlighted in a recent issue of Logistics Management, over the past two years, “the priority seemed to be achieving any outcome at almost any cost, rather than rethinking logistics to achieve better outcomes”. Even if this was probably primarily out of necessity, companies need to break with this modus operandi. Because otherwise, he will continue to undermine the entire industry.

Therefore, bringing transportation in line with the world will require a fundamental rethink – both in the approach and the industry’s mindset. The challenge is not in a single organization but in the entire transport sector. The challenges in the freight sector occur between companies. This is precisely where you have to start to solve the problem. To achieve this, it is essential to adopt digital tools, foster a culture of collaboration, automate decision-making processes and use real-time data.

Also Read: Machine Learning And Big Data In Transportation