Supply chain disruptions have brought about an age of innovation. From a transportation standpoint, this has included major technological advancements. Last week, I gave the keynote presentation at the Dangerous Goods Symposium, sponsored by LabelMaster and the DG Exchange. In my presentation, I highlighted five key transportation trends that are changing supply chains from a technology standpoint. These trends and technologies include the network effect, innovation in transportation management systems, time slot management applications, autonomous trucks, and the future of last mile deliveries, specifically looking at autonomous mobile robots and drones for home delivery.
The Network Effect
The first of the transportation trends is the network effect is at the heart of supply chain transformation. Essentially, the network effect exists when all components of the supply chain technology ecosystem work together to improve the performance of the end-to-end supply chain.
From a transportation standpoint, the network effect relies on communication between applications to make freight moves more efficient. This can mean more efficiently matching loads with capacity, using visibility tools to predict more accurate ETAs, optimizing routes, and ensuring that trucks can be loaded and unloaded as efficiently as possible. Sustainability is a byproduct of the network effect, as load consolidation and route optimization mean less trucks on the road to deliver the same freight, which is important for reducing carbon emissions.
The network effect plays a role in the remaining trends below, especially transportation management and time slot management.
The second of the transportation trends is innovation in TMS. Historically, transportation management systems have offered a strong ROI. The primary reason companies buy a TMS is for freight savings. These freight savings can be attributed to simulation and network design, load consolidation and lower cost mode selections, and multi-stop route optimization. As freight costs have continued to rise, companies have looked more and more to their TMS to mitigate these rising costs. A big reason for TMS growth is due to the fact that technology has been steadily improving over the last few years. There are three innovation in particular that are playing a big role.
The first is artificial intelligence. Artificial intelligence has been, and will continue to be, a key component of transportation management systems. AI can be used to “learn” about constraints, such as capacity, regulations, and hours of service, and properly plan shipments. This gives a much better ETA of shipments to warehouses, stores, and end customers. Aside from improved ETAs, AI plays a role in other aspects of transportation management. Shippers learn which carriers meet on-time service levels and which do not, which lanes typically carry more chance for delays, and whether there is an optimal number of stops before shipments become late. AI aids shippers in better understanding how to drive efficiencies without sacrificing service levels.
A second innovation is real-time visibility solutions. 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 management 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. However, they are equally important for other modes. For OTR 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. Ocean ETAs are much different because the macro-factors are a lot different than over the road, such as currents and wind speeds, which play a major role in the overall transit times. Air cargo has rebounded with the capacity crunch. Air cargo is easier for predictive ETAs based on the network and speed of transportation when compared to ocean cargo.
The final technology for TMS innovation is IoT. An IoT-enabled fleet management solution can improve visibility and versatility for companies across multiple industries. Versatility is important, as each industry has its own set of unique requirements across fleet management and integrated logistics. The use of an IoT-enabled fleet management solution can boost performance by improving asset visibility and vehicle utilization, reducing wait times at destinations, and providing proactive maintenance-related cost savings.
Time Slot Management
The third of the transportation trends is the growing importance and interest around Time Slot Management. Time slot management helps to organize warehouse resources to prepare for an incoming truck. The warehouse needs to know who is coming and when, which begins with the ETA. Beyond that, warehouse workers need updates on what dock the truck is arriving, when the truck is loaded, what papers they will pick up, what needs to be signed, and when they are leaving the warehouse or yard.
There are elements that are out of your control which will impact shipments. It is really just a matter of how much of an impact will be felt. Time slot management applications can help to reduce the impact of changes. Whether it is due to traffic jams, missed appointments, or a variety of other reasons, loadings and unloadings will need to be rescheduled on any given day.
The fourth of the transportation trends is autonomous trucks. The jury is clearly still out on autonomous trucks – there have been plenty of pilots and publicity, but are self-driving trucks ready to take to the roads in a critical mass? One of the biggest drivers for self-driving trucks is the driver shortage which continues to grow every year. However, autonomous trucks are not the quick solution to the driver shortage. In fact, similar to autonomous robots within the warehouse, autonomous trucks are not here to replace human drivers. Instead, they are here to collaborate with drivers to make the task easier.
The practice of platooning seems to be a space where the reality of autonomous trucks, could first make an impact. In these solutions, the lead truck is equipped with technology augmentation while a follower truck operates in tandem through a fully autonomous system. The vehicles move in a group or platoon with the trucks driven by smart technology and communicating with one another. Each of the trucks still has a driver onboard for safety and for taking over when exiting the freeway. This allows the follower driver to log off and rest while the truck is in motion. This means that the two trucks, operating in tandem, allow drivers to drive twice as far while ensuring they don’t exceed hours of service regulations.
Autonomous Last Mile Deliveries
The fifth and final transportation trend in the future of last mile delivery. One of the most difficult and expensive aspects of the supply chain is last mile and home delivery. However, from a customer experience standpoint, it is also the most memorable and possibly important. As e-commerce continues to grow, we are looking at autonomous last mile deliveries as part of the solution.
Many companies have been testing drone deliveries for the last few years. The use of last mile drones is still challenging for a variety of reasons including FAA regulations, public perception, and the technology itself. However, more and more companies are exploring the use of last mile drones, hoping to bring down the cost of deliveries while improving customer service. The big names out there right now are Wing, Amazon, UPS, Matternet, Flytrex, and Zipline. Each of these companies has completed drone deliveries of small packages to a variety of locations. It still seems that the use of drones to deliver medical supplies and prescriptions has been the most effective.
The other side of autonomous home delivery is autonomous mobile robots. Many companies have begun testing autonomous delivery bots in cities and on college campuses. For many of these companies, however, the term “autonomous” may be a little bit misleading. In fact, throughout the delivery process, there is a team of human minders that are tracking the vehicle every step of the way. While the behind-the-scene workers mostly monitor the robot, if the bot runs into trouble, the human worker can use a remote control to drive or troubleshoot the vehicle. And if the robot becomes stuck or unable to make the delivery, these workers will come to the rescue to make the delivery themselves. Companies like Starship Technologies, Nuro, and FedEx have completed a number of pilot programs are deploying delivery bots right now.
Over the last two years, investors have pumped more than $8 billion into autonomous delivery companies. The big question is what is the public perception of these delivery vehicles? The jury is still out on that, but as they become more commonplace, and the use cases continue to pile up, the use of this technology gets closer to being the normal. Either way, it is a glimpse into what the future holds for home delivery.