Digitalization, as an industry trend in the logistics world, has emerged quite late. However, now that digitalization and innovation seem to have caught up the industry’s pace, much transformation can be expected. Digitalization refers to using advanced technologies to integrate physical and digital worlds through a seamless exchange of information occurring at different supply chain nodes. Hence, the process helps improve productivity, use data analytics for informed decisions, automate mundane manual tasks, reduce the scope of error, and induce process excellence throughout the supply chain.
Logistics, as a whole, is experiencing this wave of innovation in automation and digitalization initiatives.
Logistics, as a whole, is experiencing this wave of innovation in automation and digitalization initiatives. When we refer to trucking, digitalization may refer to a comprehensive and automated system where processes are monitored and controlled by technologies that optimize operations while directly contributing to the bottom line. The extensive growth of e-commerce is a driving force behind driving digitalization in trucking. Changing consumer behavior, prolific e-commerce discounts, same-day deliveries are all changing the way products move at different stages of the supply chain. The need for digitalization in the industry is greater now than ever.
Elements of Digitalization in Trucking
Digitalization can be witnessed in broadly four segments of the industry: Goods, Conveyance, Infrastructure, and Business Processes. Therefore, the elements of a digitally enabled trucking system can be an autonomous communication system, remote diagnostics, real-time tracking and tracing capabilities, and seamless exchange of information among integrated systems. The large-scale penetration of mobile connectivity, smartphones, geo-location tracking systems, and sensor technologies like the Internet of Things are all contributing to the logistics industry’s digital revolution. With the growing need for data analytics, the future of trucking will be mostly dependent on critical insights from analytical systems to drive forecasts, meet demand, manage risk, and reduce costs.
With the growing need for data analytics, the future of trucking will be mostly dependent on critical insights from analytical systems to drive forecasts, meet demand, manage risk, and reduce costs.
Goods: Inserting tracking devices such as a tracking bar, QR code stickers, and RFID tags in goods are common. RFID tags are quite useful in providing real-time information about location or GPS and external climate conditions such as temperature and humidity. Having such tracking systems in goods and containers that carry these goods is particularly relevant because tracking them while on transit across geographies is necessary to provide real-time data and shipment status. Sensors, connectivity, and the application are the three elements that comprise the tracking technology for shipping containers. Sensors tell the containers’ location, and through connectivity, the data transmits to the application. APIs are used to extract this data further and put it on the logistics platform to be analyzed.
Conveyance comprises the trucks, delivery vans, and other vehicles equipped with sensors that report their location, speed, engine condition, etc. to the systems.Routing and navigation are integral elements of this aspect as they facilitate improved operations considering constraints such as congestion. Autonomous trucking is finding increasing mentions in enabling digitalization in the industry. PwC, in a 2016 report, predicted that trucking and logistics would soon comprise an ecosystem of autonomous vehicles, combining driverless, cabless trucks and delivery hubs staffed by robots. It further stated that a fully automated end-to-end supply chain would be capable of building a product on a digitized assembly line with digital capabilities that signal and book transport for its delivery when it is close to being completed. The customer’s address that the goods are shipped to will be already coded, and the freight-matching system would match the available capacity on trucks destined for the specific route. While this may seem a bit futuristic at present, autonomous vehicles are invariably gaining momentum, and companies like TuSimple, Aurora, Daimler, and Embark Trucks have aggressively ventured into this avenue. German automaker Daimler AG is also experimenting with ‘Platooning’ to improve efficiency for long-haul transport. Platooning is when a single truck pilots a fleet of trucks that follow the same route and instructions as made by the driver. The trucks in platoons will be controlled centrally to ensure uniformity in speed, fuel consumption, and delivery speed.
The digitalization of infrastructure is also of utmost importance, including the things that support the transportation activities. The road infrastructure is the central element in the planning and management process of road transport. Thus, digitalizing roadways, terminals, distribution centers, logistics parks form an integral part of the initiative. Equipping infrastructure with sensors helps monitor their use and condition that enable effective traffic management systems to optimize capacity. Similarly, smart roads with sensors and data collecting devices that can detect collision points and warn nearby drivers can be of great use in avoiding road accidents.
Business processes are the glue that binds all the different elements of a supply chain. These processes support the transactional functions of freight distribution. Business processes such as inventory management, demand forecasting, assigning load to carriers, managing and allocating warehousing capacity, freight invoicing etc can all be digitized using TMS, WMS, and their integration with ERP. EDI (Electronic Data Interchange) has, for long, governed the integration of information between systems. Lately, APIs have enabled seamless data sharing for easy management of platforms and extraction of relevant data. Another technology that is enabling automation of business processes is Robotic Process Automation (RPA). This technology is non-intrusive in nature and leverages the existing IT infrastructure of organizations. The increasing adoption of Electronic Logging Devices (ELDs) as a replacement for paper logs is also an initiative to move to more digitized systems.
Benefits of Digitalization in Trucking
With the proliferation of e-commerce and the need for trucking growing leaps and bounds, the digitalization of trucking is needed more than ever now. The digitalization of trucking comes with its share of benefits that enable optimum fleet and space utilization, enhanced efficiency, significant cost-cutting, and integrated systems.
1. Optimum utilization
Empty runs of vehicles is a major cost in trucking. Inefficiencies of dispatching systems where trucks travel to pick-up destinations without load contribute to additional costs and wastage. Digital platforms interconnecting systems help in the consolidation of truck capacity are a necessity.
2. Enhanced integration
Digitization facilitates the integration of trucks in sync with the logistics chain through real-time data of locations, estimated shipment arrival times, and information regarding departure times to factories, warehouses, and customers. Such integrations foster timely delivery, better performance, and customer satisfaction, enabling them to track the shipments’ status remotely.
3. Enhanced efficiency
Digitized trucking enhances efficiencies at granular levels as well as in the broader scope of processes. By incorporating cutting-edge materials handling practices into daily operations, better allocation of space, capacity, and resources, enhanced inventory control, and significant cost reductions contribute to enhanced efficiency and productivity.
Digitized trucking will enable faster transfer of goods in and out of distribution centers and to end customers.
Digitized trucking will enable faster transfer of goods in and out of distribution centers and to end customers. Through easy track and trace capabilities and smooth booking processes, customer experience can be improved. Measurement of key performance indicators can further help improve operations. Furthermore, blockchain can enable the complete transparency of the social and environmental footprint of purchases shared with end-users. All in all, the digitalization of trucking as an industry is a win-win scenario for all.
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