To be successful in 2022, supply chains must continue to negotiate a very volatile and uncertain environment. Leveraging technology and network data will be more important than ever to keep supply chains on track. How can technology help address challenges like tight capacity in freight transportation? How is automation helping companies improve their transportation operations? And what kinds of data and insights are logistics decision-makers looking for to create a competitive advantage? Those are some of the questions I discussed with Steve Barber, Senior Vice President of Platform at Transplace, in a recent episode of Talking Logistics.
Déjà Vu All Over Again
As we begin 2022, it doesn’t feel like things are a lot different than a year ago. So, I began our discussion by asking Steve what’s new and what’s changed. Steve acknowledges that a lot of things are similar, but he thinks the difference is we are more prepared for it.
“We came into 2021 expecting that we were on the tail end of the pandemic and anticipating change. What we didn’t anticipate was the unprecedented pent-up consumer demand, along with new supply chain problems such as chip shortages, port delays, driver shortages and container shortages fueling unprecedented supply constraints,” says Steve. “There has also been double-digit inflation in transportation costs.
“On the technology front, there has been tremendous increases in investment and acquisitions in supply chain companies and technology,” continues Steve. Transplace’s acquisition by Uber Freight is a good example.
Tight Capacity and Rising Costs
Tight capacity and rising costs, across all modes, remains top-of-mind for transportation and logistics executives. I asked Steve how technology can help companies address these challenges.
Steve points out that shifting from a relatively soft market in previous years to one of tight capacity necessitates being part of a wider network. “If you’re still dealing with the same 10, 20 or 50 carriers and brokers, and you haven’t adjusted to take advantage of the technology available through a network partner, the ability to find continuous moves and backhauls, or to tap network capacity as needed through digital platforms, you won’t be competitive.”
Steve mentions that in addition to finding previously unused capacity, especially from smaller carriers, digital networks provide greater efficiency in operations and freight visibility by tapping into driver apps and communications. Plus, the ability to see and analyze transportation data in real time, and make adjustments in real time, creates tremendous value not available with traditional, backwards-looking monthly reports.
Labor and Automation
Labor shortages are another factor driving the need for automation. Steve notes that using automation to deal with labor shortages and inefficiencies has been critical, but challenging, because there have been so many exceptions to normal operations over the past two years.
“I’m excited by what is happening with APIs and the realization by shippers, carriers and technology providers of the value of standardization in connected networks and the ability to transact quickly. More data can be available on demand and in real time. Things like instant rate quotes through APIs offer huge increases in efficiency over phone calls or emails, but at the same time, you have to make sure the rates are benchmarked and competitive. Digital platforms can give shippers confidence in those rates as well as mitigate risks.
“Another area of explosive growth is in AI-enabled RPAs [robotic process automation] and machine learning-based automation to automatically process invoices and proof-of-deliveries, for example. It’s important to work with a partner who already has those capabilities baked into their systems.
“And finally, there is the growth in visibility through networked devices, the possibilities of the Internet of Things, and the implementation of 5G networks. I think you’ll see shippers take more control over their visibility options because of these capabilities.”
Making Smarter Decisions Faster
Technology can help companies make smarter decisions faster. But Steve also points out there are a number of areas where it may be better not to automate. However, Steve says the amount of data available to all members of the transportation community today is extraordinary, and together with machine learning and AI, can significantly improve decision-making speed and success. For more of Steve’s insights and advice on this topic, as well as his thoughts on what trends and technologies will have a major impact in 2022, I recommend you watch the full episode. Then keep the conversation going by posting a comment and sharing your own thoughts and predictions.