Top Trends Driving Change In The Freight Industry
The freight industry is in a period of rapid change where technologies and consumer expectations are constantly evolving. Innovative solutions are powering growth, allowing businesses and consumers to connect like never before.
With the industry’s annual revenue of more than $4 trillion, carriers can’t afford to miss out; they must be proactive in shaping the future or risk being left behind. This article explores key trends defining the freight industry, the opportunities they present, and how organizations can best prepare for the changes to come.
Shifting Customers’ Needs
Customers’ expectations are constantly changing. Business customers are calling for faster, guaranteed delivery time while individual customers expect low-price or free shipping. Manufacturing is also increasingly being customized – which is great for consumers but can put tremendous strains on manufacturers and carriers.
Buyers are demanding more transparency about the conditions and status of their goods. They want control over delivery time and locations, making shipping processes more complex than ever before.
These new expectations come in spite of the changes happening in eCommerce. Reliable access to the Internet, payment gateways, and the proliferation of internet-enabled devices are fueling the growth of the online retail industry.
With more and more customers shopping online instead of brick-and-mortar stores, the pressure to deliver goods at a faster pace has grown. Where a single truck once delivered a large volume of goods, the same quantity of goods is now being be transported by multiple vehicles to shorten delivery time. While this helps improve customer experiences, the costs can be prohibitive without collaboration among carriers.
The issue with pickup timing is that there’s potential for things to fall through the cracks. The system can be more effective and sustainable if the parties involved – shippers, carriers, and the recipients – make good on their end of the bargain, or are flexible with timing or delivery locations. That’s why many freight companies are building delivery facilities to get goods closer to customers.
Reducing the distance to delivery is one way to make shipping more efficient. This is why smart lockers — secure locations where customers can pick up their goods at a later time– are increasingly popping up. Smart lockers allow shippers to combine multiple packages and deliver them all at one time.
Additionally, it’s easier to track packages with smart lockers. Some lockers are mobile too and can meet delivery workers or recipients anywhere in the city, significantly shortening delivery time. This method can make the overall network more effective compared to delivering to customers home addresses.
Implementing a simple solution like the one above can add great value to last-mile delivery. Studies have shown that costs and shipping time can be halved when distribution centers are moved closer to the cities and the recipients.
As speed becomes a top priority for consumers, relocating stores or distribution centers nearer to prospective customers can be very effective in minimizing costs and delivery time. To make this system more efficient, unsold inventories should be positioned strategically where prospective buyers are likely to be located. This approach will not only save time but will also reduce costs and enhance customer experiences.
Collaboration and Resource Sharing
The traditional transportation system is currently being challenged by the emergence of ridesharing platforms such as Uber and Lyft. These platforms have helped change how people get from point A to B at relatively low costs. The same is beginning to happen among carriers, shippers, and third-party vendors who are combining resources to deliver goods at a lower cost.
By sharing assets, carriers can expand their network capabilities and get more done at minimal expense. For example, a freight company can utilize other carriers’ assets to deliver goods outside its region, expanding its business without investing in new vehicles or facilities that may be prohibitively expensive without sharing. Collaboration and asset sharing are more prominent among regional carriers, but this can be expanded with the help of technology.
There are many ways technologies are helping transform shipping, such as how technology can help connect adjacent networks or integrate an existing network of carriers with a shared one. By using advanced cloud-based technologies to connect carriers, drivers, and customers, collaboration will be broadened and pricing will more accurately reflect demands. These cloud-based technologies can also provide customers with real-time visibility into the transit of their shipped goods, a capability that most customers have come to expect.
Tech Trends Shaping The Future Of Freight
As the freight industry grows at a rapid rate, more and more organizations are investing in innovative solutions and technologies to bolster their opportunities in this critical market. Traditional business services such as freight brokerage are being transformed as a result of new tools and new ways of shipping. Below are technologies and platforms disrupting the freight industry:
A number of platforms offering real-time freight booking have grown rapidly over the past few years. These platforms provide customers with more shipping options and create transparency on cost. Leading logistics platforms include Uber Freight, Transfix, and DashHaul, are new services that are connecting carriers and customers through innovative online platforms. Instead of going through the time-consuming brokerage process, shippers can quickly look up available trucks and compare prices. These platforms make booking and managing shipments fast and easy with online accounts.
Online logistics companies go by many different names including digital freight matching and
‘Uberization of Freight’, but they all have a common mission: making transportation affordable and more efficient. Getting carriers the right cargo at the right time is the hallmark of these platforms; they’ve made booking freight online easier than ever. Experts believe that the adoption of logistics platforms will become more widespread as their capabilities become more advanced and more accessible.
Blockchain and Internet Of Things (IoT)
Consumers are increasingly demanding transparency – most want to be able to track their goods in real-time. With Internet of Things and blockchain technologies, customers would be better able to have full visibility of where their goods are at any given moment. Organizations are also reporting greater engagement and collaboration as a result of using these powerful tools in logistics. Industries such as finance and insurance are utilizing blockchain in combating fraud and increasing the security of online transactions. The same can be done in logistics where this technology can bring a much-needed change.
Through connected devices, IoT will provide a platform for greater visibility, transparency, and effective management of cargo. Downtimes will be reduced through the use of these devices, and they will play a vital role in managing schedules, tracking routes, and monitoring vehicle usage, all of which will help ensure that goods are delivered as planned.
Delivery Robots and Drones
Delivery bots and drones are being used by companies looking to reduce overheads or tap into the enormous opportunities that these technologies bring. An example of a company utilizing drones in delivery is UPS. UPS uses more than sixty thousand drivers to deliver packages every day. A research conducted by the company found that over $40 million could be saved annually by simply reducing one driver mile a day. Using drones and bots in logistics could transform the traditional shipping market by making delivery cheaper, faster, and more efficient.
Besides being good for business, bots and drones are also great for the environment. They can help reduce carbon emissions and road congestion in many densely populated cities. As the drive for instant gratification increases, these technologies can help meet on-demand and local delivery needs. Companies in industries such as healthcare and hospitality are already using these powerful technologies to deliver goods and supplies to remote places where large vehicles can’t go. Delivery bots and drones are more suitable for automation because they are smaller and consume less power, which makes them easier to use in urban and rural environments.
Data-driven organizations are leveraging big data and analytics to obtain accurate, timely insight into business performance. New trends and bottlenecks can be identified with the help of big data. In shipping and manufacturing, network planning, real-time optimization of routes and preventive maintenance, which helps in preventing breakdowns are some of the areas that big data is being put to use.
Some leading freight companies are utilizing data from GPS trackers to study operational efficiency and prevent bottlenecks. With big data and predictive analytics, logistics companies will be able to enhance delivery speed, reduce costs, and provide accurate real-time package tracking for customers.
Augmented Reality (AR) And Virtual Reality (VR)
Augmented reality (AR) and virtual reality (VR) have the potential to transform customer experiences in logistics and retail industries. Some studies estimate that in the next three years VR adoption will be more widespread while AR will become more mainstream in the next six years. However, in some industries, the use of these technologies is already gaining significant traction. This includes in manufacturing where VR and AR are used in product design and development, repair, and maintenance of industrial equipment. In the retail space, product virtualization is helping customers make informed purchasing decisions.
Conversational systems such as chatbots and virtual personal assistants (VPAs) are playing a critical role in communication and customer service today. These technologies come with the capability to answer many varieties of questions and offer solutions without help from human agents. They can handle online transactions, provide access to information quickly, and ensure delivery.
With so many powerful technologies popping up every day, there’s no doubt that the freight industry is undergoing a major technological change. These shifts in technology demand that logistics companies become more agile and more responsive to the growing demand from clients. By leveraging the technologies discussed above, freight companies will be able to meet the evolving customer expectations and thrive in this constantly changing market.