How Logistics Technology Helps Shippers Overcome Challenges

There’s never a dull moment for transportation professionals. Whether it’s finding capacity, managing costs, meeting more stringent service requirements, or creating a more resilient operation — the list of challenges is never-ending. Fortunately, continuous technology innovation is helping shippers keep pace with changing market dynamics and customer requirements. How is new technology making a difference today? Which of the many capabilities are most important? Those are a couple of the key questions I discussed with Steve Barber, Senior Vice President of Platform at Transplace, during a recent episode of Talking Logistics.  

Today’s Transportation Challenges

Before we dove into the new technologies helping shippers to navigate a turbulent environment, I asked Steve to discuss the key challenges shippers are facing today. Steve notes that capacity constraints is the number one issue plaguing shippers across all modes globally. “After the pandemic-induced slowdown, everyone is continuing to play catch-up with constrained resources as demand has rebounded,” he says.

Steve comments that increased customer service demands is another huge problem. “While this isn’t a new problem, the current capacity shortages are heightening the issues and shippers are looking for ways to mitigate the risks of service delays. Capacity constraints are also driving cost management challenges.”

How is Technology Helping with Capacity Issues?

I asked Steve about technology’s role in helping shippers to manage these capacity issues. “On the trucking side, at the end of the day, you still have to match a driver and truck with a load,” says Steve. “What it boils down to is finding an efficient way to make that match. While there’s a ton of technology that is helping to make that happen, there’s also a fair amount of adoption that still needs to happen for it to be really effective. You still still need a large, scalable solution in order to find the trucks that are really going to be available.”

Going beyond individual loads, from a contracting standpoint, “the ability to efficiently match a carrier’s network to a shipper’s network is also very important,” adds Steve. “So, procurement tools and carrier management tools are also critical from a technology standpoint. 80-85% of freight moves with contracted carriers for most shippers; it’s the other 15% that causes most of the pain. Therefore, you have to have the tools to manage the 85% very effectively and efficiently so you can focus on managing your cost and risk on the other 15%.”

Steve goes on to discuss how balancing the many issues concerning capacity, performance, acceptance rates, etc. requires a robust transportation management system coupled with a deep analytics platform and a data science methodology to make those decisions on a day-to-day basis. “Decisions have to be made faster to minimize the service and cost impacts for shippers.”

Risk Management and Resilience

One thing the pandemic taught us is the importance of risk management and supply chain resilience. Steve notes that it accelerated the technology adoption curve in these areas. “In some cases, 3-5 year adoption plans became 3-5 month plans. Mitigating risk comes down to using the technology to make decisions faster using better data. Tools like machine learning and data science became must-have rather than nice-to-have in short order. You have to be able use a network of data to measure yourself against the current market and your peers.”

Improving Productivity and Cost Management

All of the challenges associated with the pandemic are layered on top of shippers’ ongoing need to improve productivity and cost management. I asked Steve how technology can help with that aspect.

Steve says, “We work with our customers to create win-win opportunities to match loads to available capacity. The carriers benefit by reducing empty miles and increasing efficiency and shippers get committed capacity and good on-time service at a reasonable cost. Our collaboration technology and the scale of our network of freight under management is a big part of that equation for efficiency and cost improvement.”

Technology Platforms

With all of the talk in the marketplace about the network effect and the need for technology platforms to support this, I asked Steve to define platforms and what they offer. Steve remarks that the term is getting overused, but at the core it’s the joining and aggregating of technologies to provide visibility, scale, connectivity, analytics, and machine learning in a single place, and then connecting that platform to a scalable network “to really turn it into something that is not just a standalone technology.”

“It enables collaboration for better efficiency across the network so everybody benefits,” says Steve. “That’s why shippers and carriers participate.”

Of course, Steve’s explanation of platforms and their value is much more involved than I have space for here. Likewise, I was only able to scratch the surface of his comments on the other topics above, as well. Therefore, I recommend you watch the full episode for all of his insights and advice on this topic. Then post a comment and share your own thoughts and experiences.