Adapting for survival

15 November 2017

For transportation companies around the world, there are two ways to address the future: you can continue on down the road, so to speak, providing the services, products and performance you’re known for providing; alternatively you can embrace the inevitable changes, and become something new and different from what you’ve always been.

If nothing else, you’ve got to keep up with your customers – many of whom are already embracing innovation and new technologies and services.

As indicated by an article earlier this year in strategy+business (s&b), by adopting aspects of advanced vehicle-related IT systems, automated fleet management, cloud-based data analytics, robotics, location detection and autonomous vehicle technologies, you can gain the flexibility and capabilities to shift gears and focus on the most profitable services based on your customers’ ever-changing needs.

Hi-tech terminology notwithstanding, the outcomes of both scenarios are fairly obvious: the company that hesitates, or fails, to adapt to innovative change in the marketplace or the industry will likely be rendered obsolete by the companies that do.

Tech in transport

This certainly isn’t a new headline, but as s&b also suggested, 2016 was a breakout year for new technologies in the commercial transport industry, even while many companies continue to resist them. The difference is that, now, newer companies are emerging – companies that grasp these technologies and know how to maximise them with modern, cutting-edge business models.

A few examples (via s&b): Amazon Prime Air – a programme that delivers packages by drone to shoppers within 30 minutes of order placement; Uber’s autonomous trucking arm, Otto, made its maiden voyage in late 2016 – delivering 50,000 cans of beer through a self-driving vehicle; USA-based Local Motors embedded IBM’s Watson Internet of Things for Automotive into a driverless shuttle bus manufactured by 3D printing – which welcomed its first passengers aboard in Washington D.C. in 2016.

Future concepts

In addition, like the bitcoin concept, there’s software from Blockchain which creates a series of verifiable and auditable information packets out of transactions. Implemented in the commercial transportation arena, this technology could foster more seamless and transparent communications and interactivity between carriers and shippers, possibly cutting out distributors and other intermediaries. Then there’s Convoy,for example, a young company whose software matches deliveries coming into an area with the availability of tractor-trailers from smaller local providers. This maximises scheduling efficiency and minimises shipment downtime, it says. There’s also the ‘sharing economy model’, similar to what’s happening in the taxi realm, which is becoming a popular commercial transport option globally. UberCARGO in Hong Kong, Dolly in the USA, and Nimber in Norway are other players hoping to make a splash in this arena.

And s&b explains that an even bigger disruptive force is on the horizon: the rise of free-floating, contractual services – the shipping versions of an e-marketplace. The “operators” will be cloud-based platforms that co-ordinate entire routes for shipments by choosing between carriers, hubs, depots and warehouses to find the most efficient use of capacity. In this environment, the owner of a single truck can compete head-to-head with companies owning hundreds of vehicles.

It should go without saying but, with this new wave of disruption (and disruptors), commercial transportation companies around the world can no longer sit and try to “wait it out” or hope to remain insulated within an exclusive service offering and process. In a concerning recent find by global consulting powerhouse PwC, only 28 percent of the industry claims a high level of digitisation today.

Up to this point, commercial transport companies have often been hesitant about adopting more advanced technologies. If nothing else, now is the time to educate yourself and your people, and start focusing on a horizon point where change equates to your company’s survival.

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