I am continuing to work on my latest Transportation Execution and Visibility Systems study, which looks at the total size of the market, the forecasted growth through 2026, and the leading suppliers across a number of categories including industry, region, customer size, and mode. One thing that has become abundantly clear over the last few years is that visibility solutions are becoming more necessary. The need to know where products are, whether they are on the way to the warehouse, store, or customer, is critical to ensure a positive experience. The rise of visibility solutions at the container level is helping to drive the transportation execution market to new heights, with real-time visibility as a major growth driver.
Real-time visibility tools are generally most effective for over-the-road shipments. For these shipments, the visibility is based on integration to truck carrier’s systems. The carriers in turn are tracking the ELD devices on their trucks or by a downloadable app that the driver puts on his smart phone. There are a variety of external data streams that also play a role in providing better visibility and improved ETAs. Companies are partnering with data aggregators to get a better idea of when shipments will arrive.
However, real-time visibility applies to all modes in the transportation journey. However, the nuances and granularity of the data will vary depending on the mode. Ocean ETAs, for example, are much different because the macro-factors are a lot different than over the road. These include currents and wind speeds, which play a major role in the overall transit times. The majority of ocean shipments go through trans-shipments, or stopovers, meaning that the journey is more than just port to port. The route can easily change based on a variety of factors, but it will still keep the same trans-shipment locations. These changes can add significant time to the ETA.
Air cargo visibility is also becoming a more important aspect of overall transportation visibility. This is due to the limited capacity on trucks and boats as capacity has shrunk and demand has surged. It is a lot harder for many companies to find capacity on boats. The result is air cargo has rebounded to levels that are on par with the pre-Covid economy. Air cargo is also easier for predictive ETAs based on the network and speed of transportation when compared to ocean cargo.
Real-Time Visibility Data
At the end of 2021, I participated in a survey to examine the transportation visibility market. The survey looked at the importance of visibility, the challenges surrounding visibility, accuracy of ETAs, and deployment model, among others. Of the 50 respondents, the majority of respondents indicated that 40 percent or less of their transportation is true multi-modal. Multi-modal is defined as having an over the road (FTL/LTL) leg, a drayage (container) leg, and then an ocean or rail leg. The weighted average was 31 percent was true multi-modal.
Respondents were asked to rank the importance of real-time visibility across a variety of individual modes. These modes included full truckload, less-than truckload, drayage (container), ocean, rail, and air. Not surprisingly, full truckload, less-than truckload, parcel, and drayage are the most important for respondents when it comes to visibility. This is not surprising, given the nature of these lanes. Tracking items that are on a truck is inherently easier than tracking it across other modes.
When looking at the main challenges in respect to truckload visibility, more than three quarters of respondents indicated that visibility to inbound shipments that will be late is the top pressure. Too often visibility is pigeon-holed into outbound logistics. Namely, when will the customer get their order. However, understanding where items are on the inbound side are equally as important, and most companies will prioritize this information when it comes to the overall order to fulfill process.
Achieving high service levels is the second most felt pressure. Service levels are ensuring that the order is delivered in full and on time. Visibility clearly plays a big part of this.
When it comes to truckload visibility, most respondents receive their data from carrier portals or EDI messages from carriers. This shows there is a gap for shippers, as they are reliant upon carrier technology for shipment visibility.
When looking at a truckload visibility provider, the most important attribute is the quality of ETAs. While data quality and the ability to use analytics for benchmarking and understanding the completeness of data is also important, knowing when an order will arrive is most important. This is not surprising given that this is the essence of real-time visibility.
However, the accuracy of ETAs, according to the survey respondents, is lagging. The majority of respondent indicate a fairly average level of accuracy, with the weighted average coming in slightly lower. This shows that there is a big opportunity for real-time visibility solutions as the current state of the market leaves something to be desired.
Real-Time Visibility Technology
To help improve the accuracy of real-time visibility, there are a number of technologies that are enhancing these solutions. Machine learning is becoming increasingly important in transportation visibility systems. The most notable application is generating a more informed and up-to-date ETA for shipments. Machine learning is working with real-time visibility solutions to learn more about constraints (such as capacity, regulations, and hours of service) and then using that information to give a much better ETA for shipments to warehouses, stores, and end customers.
The Internet of Things (IoT) is driving interest in the market. For a truer ETA, companies are using IoT data from trucks to get a better understanding of driver behavior, such as typical driving speeds and times, as well as how they operate in heavily congested areas. Companies can take sensor data from trucks and incorporate hours of ser-vice rules to know when, where, and for how long a driver needs to stop.
And finally, blockchain is important for specific industries. This technology is all about a digital ledger as it applies to a chain of custody. For pharmaceuticals, this is a critical component of transporting goods throughout the supply chain. Most pharmaceutical companies have a small window to get products from point A to B, without any changes in temperature. Blockchain monitors have access to the temperature data and whether that changes between modes.
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