I learned about Intermodal Europe 2018 while scrolling through my LinkedIn newsfeed. It was two days way – I knew I had to register!
I was only able to make it to one of three days of the conference, but I thoroughly enjoyed the the panels I attended. As someone who doesn’t currently work in the industry but wants to serve the industry, it was quite enlightening.
Change Is Coming to the Logistics Industry (or at least it should be)
I constantly heard that one of the main factors slowing progress is the resistance to technology and change.
Today, we can download an app to hail a cab and watch it approach our location, while also turning the heat on before we arrive and ordering food to be delivered to our home. In contrast, logistics companies can’t tell a customer where their shipment is or how it disappeared.
One speaker noted that one of the highlights of last year’s conference was a type of tracker that goes inside the shipping container. That was 2017.
Why hasn’t the industry progressed? Why does the supply chain seem to encounter the same problems it did 100 years ago?
The resistance to technology is not just a change of inertia – it’s also a fear of job losses. People are constantly afraid that artificial intelligence will replace them, rather than approaching it as a tool.
And this resistance to technology has ripple effects. The Women in Logistics panel highlighted not only the absence of women in the industry, but the absence of any interest from the upcoming workforce. Logistics and supply chain has not proven itself to be a forward-thinking industry compared to other fields currently embracing the unknown technological frontier.
While there is some innovation is coming from within the industry, other fields are also developing solutions for the inefficiencies of logistics.
Digital Platforms: Baby Steps into the 21st Century
I still find it shocking that the logistics industry hasn’t, as a whole, made the shift to digital platforms. How does anyone trust that their items will get from point A to B? How is anyone held accountable? How do companies stay competitive if they don’t have a user-friendly interface or website? Who has the time?
Companies like FreightBro offer great solutions for customers and freight forwarders to reduce their paper use, communication delays, and time spent connecting the dots. By centralizing all their freight operations in one application, companies and customers waste less time searching for solutions and create a better workflow.
But while digital platforms may help streamline administration, they do not address all the challenges facing the logistics industry.
Blockchain: Take the Plunge
Another universal sentiment seemed to be the need for collaboration. No one functions alone as part of the supply chain.
Being really good at administrative tasks isn’t enough. Shouldn’t everyone be able to file paperwork correctly and communicate efficiently? By specializing in a field or aspect of the supply chain, a company can secure its position in the industry and prove its value as a partner.
Nico Wauters from T-Mining, Tom van Dijk from CGI, and Clinton Senkow from ShipChain were all passionate advocates for using blockchain to improve the supply chain. By implementing its technology, companies can shift their focus from “fire fighting” to providing premium customer service.
Currently, blockchain trials are being conducted in small, private networks. If (and when) the technology takes off and becomes commonplace in the industry, transactions and payments will be visible to everyone on the blockchain.
Building Trust within the Logistics Industry
Change isn’t easy for everyone. Blockchain is not only a change in a company’s workflow, but also its mindset. You have to trust others in the industry that they will make good choices, too.
Van Dijk said that blockchain is disruptive by creating a layer of trust between points on the supply chain. It seems like such a strange definition of “disruption,” but with the lack of visibility in the industry – another universal complaint – it’s easy to see how that trust between partners is not easily earned.
Sharing is Caring
As part of trust-building, some people call for data sharing. It feels risky – why would anyone want their competitors to know how well they move product?
Currently, everyone operates based on the information they are given and the data they produce. This, however, is an incomplete picture of the supply chain.
Thomas Bibette demonstrated how DCBrain is helping companies put their own data to practical use. But with more data available, new trends may reveal themselves, which may lead to better solutions, which may lead to less churn for you.
Without sharing data, it will be increasingly difficult to pin-point issues in the industry so that everyone can improve. Remember: no one functions alone in the supply chain. (At least, if you don’t want giants like Amazon and Alibaba putting you out of business.)
How to Get Decision Makers on Board
It’s the million-dollar question. From what I saw, it seems that many leaders in the industry are focused on making today’s sale, or on the number of shipping containers lost last week. It’s hard to plan for the future when there’s a fire that needs to be put out today.
As step one of his value-based 5-step method, van Dijk suggests starting with creating awareness among key stakeholders before experimenting and creating a pilot.
But how do we create awareness that will change the mindset of this ancient industry?
Maybe start with a few examples of how blockchain has proven its positive impact on the supply chain. The ports of Antwerp and Rotterdam have shown interest in it. Companies like Walmart have experimented with shipping lettuce using the technology, and IBM and Maersk developed a blockchain partnership:
Through better visibility and more efficient means of communicating, some supply chain participants estimate they could reduce the steps taken to answer basic operational questions such as “where is my container” from 10 steps and five people to, with TradeLens, one step and one person.
One step with one person. The efficiency is almost unimaginable. Why would your company want to be left behind in this technological advancement?
These, however, are industry powerhouses. They have the resources to invest in this type of research and experimentation. The blockchain infrastructure doesn’t fully exist yet – it is still only comprised of private networks.
But even so, ShipChain is running pilot programs with Perdue and CaseStack, and has had its work recognized in the DHL white paper on blockchain and logistics. While these names, again, are heavy hitters, the growing investment and interest in the technology cannot be ignored.
As Senkow said, this is just the “dial-up” stage of blockchain. It has so much potential and there’s no denying that it will be here to stay.
At the moment, it seems that offering services at the lowest cost is everyone’s priority. With giants like Amazon and Walmart offering free shipping, it’s no wonder people expect low costs, regardless of quality of service.
But that just can’t be the case.
At the moment, clients may be willing to pay a low price for the risk of the item getting lost. But if you could guarantee that their product could be tracked all the way from point A to B with your stellar customer service, wouldn’t that be worth the risk of investment?
And, as I mentioned before, the future of logistics is also dependent on the type of talent that the industry attracts. Don’t you want the best and the brightest? Because as the logistics industry strands, it’s not looking very attractive.
Logistics is the backbone of the global economy. Why isn’t it a leader in advancement?
Interested in nerding out about supply chain logistics? Talk to me!