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Digitalization Is Ushering Visibility Into Supply Chains

The North American trucking industry is extremely fragmented, as over 90 percent of all fleets own six trucks or fewer. This fragmentation, aside from inhibiting technology incursion, has impeded visibility and transparency in freight movement.

 

The opacity in operations impacts stakeholders across the trucking value chain. Oftentimes, this lack of visibility or transparency within the supply chain is due to outmoded and dated systems of communication.

The opacity in operations impacts stakeholders across the trucking value chain. Oftentimes, this lack of visibility or transparency within the supply chain is due to outmoded and dated systems of communication. Not only do these systems impede efficiency, but they also result in a number of missed opportunities for shippers, brokers, and carriers alike.

The adoption of digitalization within the trucking industry has spiked in recent years. A lot of it has to do with the rise of e-commerce and its associated ‘Amazon effect,’ which has created the need for expedited supply chains, especially the last-mile. This necessitated that trucking operations shed off inefficiencies especially with respect to visibility, which in turn led to a rise in innovations and the digitalization of the industry.

 

The Data Differentiator to Visibility

Stakeholders within the freight industry, be it fleets or traditional brokerages, suffer from siloed operations that do not interact with other functions within the same organization. This leads to data streams being trapped within workflows, thereby reducing operational efficiency and visibility.

Companies should phase out paper documentation and adopt digitalization in order to usher in visibility, and reduce complexities in gathering and processing documents. Aside from increasing efficiencies, this will also reduce material consumption, helping companies reach their sustainability goals.

 

With data streams being streamlined, stakeholders can leverage them via data analytics to gain insights into operations.

With data streams being streamlined, stakeholders can leverage them via data analytics to gain insights into operations. For instance, data analytics helps brokerages prime their operations to be more proactive to market volatility as opposed to only remaining reactive to change. This is particularly crucial in the age of e-commerce, where logistics businesses are expected to be malleable to continually evolving consumer expectations. To help meet expectations, leading companies are (or should be) taking advantage of linking their existing ERP systems to a TMS system.

For fleets, digitalization enables them to have visibility over driver behavior and freight movement. Aside from letting fleets provide an accurate estimated time of arrival (ETA), better visibility allows them to come up with flexible delivery models and faster shipping options.

On-demand fulfillment is a significant differentiator in the last-mile delivery segment. For this, businesses must understand customer behavior and buying characteristics – possible only by analyzing previous orders and having cognizance of market demand.

 

The Efficiency Perspective of the Freight Hauling Equation

Digitalization enables businesses to create greater visibility and increase cumulative efficiency across supply chains. Automation of repetitive manual tasks at the back office helps channelize worker hours in more productive and value-added endeavors. End customers gain access to shipping information, including real-time freight location, which improves overall customer service levels. Data streams are now stored in the cloud, making it easier to recall and share information between stakeholders in the value chain.

With technology like 5G coming up within the industry, high latency issues via the LTE network transmission will also be solved. Latency is the time it takes for data to travel from the place of origin (like a truck cab) to the destination – which is the cloud. High latency is a problem for data analytics, as it results in insights that are not, in essence, real-time. Bad cellular signals, which are commonplace when trucks haul through the country, result in high latency.

With 5G potentially becoming mainstream in a few years, the latency value can be expected to reduce. Stakeholders would then be able to access more ‘real-time’ insights, helping to further improve efficiencies.

 

Digitalization has helped businesses to eliminate cumbersome manual processes that have been an industry’s staple.

Digitalization has helped businesses to eliminate cumbersome manual processes that have been an industry’s staple. Data levels the playing field for shippers and carriers, whatever be their size of operations. With visibility being ubiquitous across the industry, the overall market can learn to handle volatility better, especially in the context of economic recession or a black swan event like the COVID-19 pandemic.

Of course, adopting new technologies is a costly and time-consuming endeavor, which discourages many companies from adopting newer innovations. This is where digital freight management, specifically third-party logistics providers (3PLs), shine. Partnering with a 3PL allows companies to reap the benefits of these digitized systems without the heavy investment cost of overhauling legacy systems.