Anyone who hasn’t been living under a rock for the past decade will hardly dispute that the world is becoming increasingly digitized. From cell phones to computers, the Internet of Things (IoT), a network of physical devices outfitted with digital technology to enable remote connection and data exchange, is now a ubiquitous part of modern life. One result of this change is increased mobility in nearly all areas of business and everyday life. With that in mind, it’s hardly surprising that the transportation and logistics industry would spot a major opportunity.
Mobility is, obviously, the name of the game for the transportation industry. According to an IDG survey, 64 percent of corporations cite mobility as a top priority on their technology agendas, and IoT, which boosts mobility through devices such as GPS and tracking solutions, is expected to see a compound annual growth rate of nearly 17 percent by 2020. In the shipping realm, IoT uses analytics and electronic intelligence to digitize and optimize freight movement. New software has facilitated modernizing products, monitoring production lines to suggest improvements, studying patterns for predictive maintenance and collecting real-time operating data to immediately fix problems on the road. For logistics providers, this means improved information quality and data-gathering efficiency, reduced need for maintenance personnel, and avoiding costly repairs and delays due to equipment failures.
“There’s no doubt IoT is transformative for the industry,” Supply Chain magazine declares. “A clear gauntlet has been laid down, the growth potential and competitive advantage to be gained through IoT is there for the taking.”
Alongside the burgeoning mobility of the IoT movement, e-commerce is taking on a major role in the transformation of the transport industry. As more people take their shopping to the digital marketplace, shipping needs are skyrocketing. Sparked by Amazon’s international, expedited model, businesses are searching for ways to handle an influx of orders and make shipping as fast, efficient, and cost-effective as possible. Neither this nor IoT is a simple beast; both require multiple systems, integration, and analysis — a strategic approach.
Enter, 3PL. Third-party logistics, more commonly known as 3PL, offers a solution for this rising logistics and analytics need with an explosion of tech and digital innovations. A method of outsourcing the distribution and fulfillment services of a business, 3PL adds a fresh element to the two-part goods transportation system: shipper, shipping carrier, and now, 3PL firm. Essentially, 3PL companies such as SmartWay take care of receiving goods, holding and warehouse storage, shipping and distribution, and even logistics such as optimization and cost control, so that an enterprise can focus on its products or services. And savvy corporations are starting to take notice. According to a recent report from Armstrong & Associates, Inc., an estimated 86 percent of Fortune 500 and 96 percent of Fortune 100 companies use 3PL services.
As the quest to adapt to and utilize the digital landscape continues, one avenue logistics is turning to is increased automation and real-time data. Though it may seem the stuff of science fiction, Inbound Logistics says artificial intelligence (AI) is rapidly gaining ground in this arena. Increased data volume, scope, and complexity in the new digital domain is quickly outpacing traditional systems, leading to delays and extra cost. Yet, AI has the ability to process and analyze massive amounts of information automatically and in real time. From optimization to performance and supply/demand forecasting, assessments and process automation, AI can collect and analyze data and even make adjustments simultaneously, creating a much more efficient operation.
From e-commerce to IoT to AI, the global marketplace is increasingly digital, and transportation is quickly following suit. Allowing increased mobility, efficiency, and ultimately, profit, these innovations are overturning the conventional freight industry, and on the front lines are rising 3PL companies, tackling the logistics and complexities that come with intertwining physical transit and digital technology.