The digitization of freight is one topic that has generated a lot of industry buzz and animated discussion over the past couple of years, but also a lot of confusion and questions. What exactly is freight digitization? Is it a disruptive force in the industry or a transformational one? And what actions should companies take to leverage the opportunities inherent in the digitization revolution? Those are some of the questions I discussed with Brian Reed, VP Business Development at GEODIS, in a recent episode of Talking Logistics.
Defining the digitization of freight
Given the confusion and questions surrounding the digitization of freight, I began our discussion by asking Brian for his definition. His straightforward response is that, “It’s taking manual or human-based processes and digitizing those and making them electronic.”
Brian compared it to the movie, television and audio industries where everything is digital now. There is no physical tape any longer. While the freight we manage is still real, he says digitization is getting rid of the human-intensive activity, replacing paper with automated processes.
Brian also points out that there are different levels of digitization, noting that transportation and warehouse management systems were early examples of automating manual processes. He mentions robotics process automation (RPA), machine learning and natural language processing as examples of more recent developments in this area that can take digitization to a higher level.
Is Blockchain part of freight digitization?
With so much industry buzz over blockchain, I asked Brian if it has a place in freight digitization? He says, “It’s just another tool in the tool box. Like RPA, machine learning and natural language processing, it’s a new technology that companies should examine to see if it adds value for their operations. But don’t force it if it doesn’t make sense. Educate yourself and try things to see what works best for your operations.”
Disruptive or transformational?
Is the digitization of freight a disruptive force that will replace old technologies with new ones or a transformational trend that helps the industry evolve? Brian says it is both, depending on the area you are addressing.
“If you’re talking about artificial intelligence and applying it to autonomous vehicles, that’s obviously disruptive. That’s going to change how we do things. But if you’re talking about taking RPA or natural language processing to digitize manual freight brokerage processes, that is an evolutionary change. For small carriers or freight brokers who are currently manual, that could be disruptive, but for the large brokers who are already automated it will be another tool to help them serve their customers better.”
The value proposition
What value will the digitization of freight have for the industry? I asked Brian for his thoughts. He notes, “The obvious answer is the human value, replacing manual effort with automation such as with autonomous trucks. RPA is another area where automation can replace human labor to drive savings. But that’s not where the big value is. The big value is the insights you can’t get today. For example, using machine learning to examine the data you already have to find insights that you could never find today because of the volumes of data and the time it would take to cull through it manually.”
On the flip side, what are the three biggest challenges Brian sees in deploying freight digitization? How are startups disrupting the industry? And what are the two things companies should do to start on the road to digitization of freight? For answers to these questions and more, watch the full episode and then post a comment and share your perspective!