By Adam Robinson, Director of Marketing & Digital Marketing Consultant at Cerasis
With the rise of eCommerce, the value of transportation has grown. Logistics professionals can no longer simply go about standard operations, and the days of peaks and lulls have ended. Yet, some may be asking, “why has demand increased so much?” To answer that question, let us turn our attention to some of the key top transportation trends we will see over the next 12 months, in part as a response to the growing customer experience movement.
The transportation industry faces a huge battle in 2018. Demand is increasing faster than anyone could have predicted, and new technologies are disrupting the market. The transportation industry will be shaped by these 10 top transportation trends as a response to the growing customer experience movement many industries are responding to.
1. Consumers Will Demand Faster Turnaround Times on Last Mile Deliveries
Customers have demanded faster deliveries for several years, especially following the rise of Amazon Prime. Customers now want products within 48 hours of ordering, if not the same day, and they are willing to pay an extra premium to get their products faster. For manufacturers, distributors, and transportation professionals, a reevaluation of transportation strategy will squarely focus on shorter turnaround times on last-mile deliveries, and the trend is expected to continue shrinking. Amazon is now offering same-day and two-day delivery cheaper, if not free, than their competitors, and Walmart has followed suit with a similar service. As a result, transportation professionals will need to work faster, harder and with fewer resources to meet rising demand and stay competitive.
Instead of focusing solely on perfect order deliveries, shippers will begin working more on just-in-time (JIT) delivery, meaning inbound freight will arrive at warehouses just in time for shipment. As a result, overall warehousing costs are likely to decline as carrying costs decrease.
2. Companies Will Localize Warehousing Construction
Remember our conversation about just-in-time delivery. JIT needs reevaluation in transportation strategy. The JIT is affecting where warehouses are built, as well as how they are used. Supply chains and transportation are moving closer to consumers, so having two or three major distribution centers is no longer enough to satisfy the fast delivery times consumers want. Therefore, companies will seek to localize warehousing constructions to areas with higher order rates, asserts On Time Logistics. Instead of larger, warehouses will get smaller, and they will become more numerous and regional.
3. Infrastructure Improvements Will Stimulate Logistics
Although an infrastructure spending bill has not been passed, the Trump administration made no secret of their plans to invest heavily in the nation’s roads, highways, bridges and transportation systems necessary for faster commutes and to make better use of fuel efficiency, reports Christopher Morgan of Fulfillment Services. Think about it: if truckers can get from point A to point B with fewer stops and less risk of damaging tires and other parts of the truck, or dealing with congestion, the costs of transportation decrease. This results in less costs to consumers, and shippers can move more product. It is a win-win for both transportation professionals and consumers. If an infrastructure spending bill is passed, it will serve as an immediate stimulus to the transportation industry and again a reevaluation of transportation strategy.
4. Lines Defining Peak Shopping Seasons Will Blur
The holidays are finally over, but have you noticed that stores and online sales seem to still be growing strong?
Chances are good that you have noticed a continued surge in sales with online retailers and brick-and-mortar stores. The parking lots are still full, but it is now well into the new year, so what exactly is going on? To answer that question, you need look no further than the trends in the reevaluation of transportation strategy that became evident in the past holiday shopping season. It started much sooner than usual, with online and brick-and-mortar sales beginning in early October, explains DB Schenker Americas. Meanwhile, Amazon had several weeks of sales for Black Friday, small business Saturday, giving Tuesday, cyber Monday and green Monday. Now, that excludes the pre-Christmas sales, liquidation sales, New Year’s Eve sales, New Year’s sales, winter storm sales and more.
There is a sale going on for everything, and it is not coincidence. The lines defining peak holiday shopping seasons are beginning to blur with traditional shopping. As a result, transportation entities will face added pressure to move more product, adhere to record-breaking deals of the holiday shopping season and provide superior customer service.
5. SNEW Waves Will Require Reevaluation of Logistics Strategy
Speaking of pressure on transportation companies, have you heard of the SNEW wave? It is not snow, but a combination of factors that impact logistic operations, including social media, news, event and weather data that will impact the reevaluation of transportation strategy. SNEW will become a major buzzword in 2018. As defined by Bridget McCrea of Logistics Management, technologies enabling the faster review of opportunities and threats to transportation will be the cornerstone of using big data for decision-making throughout 2018, and the importance of SNEW will continue to grow.
6. Variable Transportation Operations Will Become Standard
Imagine what work would be like if you could offer all customers free two-day shipping. It sounds great, but it comes with problems. Some customers do not want two-day shipping. They may want three-day shipping, or they may need ship-to-store shipping options. Even the best shipping options do not necessarily work for each customer, and customers will demand variable shipping options more frequently in 2018, reports Kushal Nahata of FarEye. This need is a partial product of the rise of package theft, and since transportation service providers may have a proverbial mountain of packages to deliver, they cannot realistically wait for signature on delivery for each package. Therefore, the burden of ensuring successful package delivery will fall to consumers, but transportation providers will need to set a priority in looking at all top transportation trends a mechanism to offer customers the ability select a delivery option that reduces risk for theft.
7. Brick-and-Mortar Stores Will Stay Relevant
As recently as last year, we predicted the number of brick-and-mortar stores to decline significantly, but we were slightly wrong. While some retailers, including Sam’s and RadioShack, have closed significantly more stores over the last year, consumers are flocking back to brick-and-mortar stores, says DB Schenker Americas.
Variable delivery options are one of the of the top transportation trends showing that consumers are beginning to visit brick-and-mortar stores with greater frequency, but their interest in use of online eCommerce shopping portals has not declined. Consumers are actively engaged in the shopping experience on their own devices, even while in the store looking at the same product on the shelf. This is the omnichannel supply chain, and it will require shippers to rethink their strategies. Instead of keeping all products at one location, they will need to begin varying product availability, and the 80/20 rule will not necessarily apply anymore.
8. Companies Will Aim to Improve Shipper-3PL Relationships
As demand for 3PLs grow, supply chain and transportation professionals will face greater pressure to improve shipper-3PL relationships. Instead of treating transportation providers as unavoidable, shippers in their closer look at top transportation trends, they will look at transportation providers as a strategic partner in ensuring adherence to customer expectations and delivering on such expectations. To stay competitive, transportation companies will begin offering more unique services, such as invoice auditing, automated freight classification, better rates on dimensional pricing, and a host of last-mile services, which Amazon has already taken great strides in with the creation of Amazon Key.
9. Transparency is Inherent in the Top Transportation Trends Shaped by Customer Experience
Transparency is everything in transportation. Consumers do not want to just know where products come from. They want to know how they were made, how they were moved, who they affected, who made them, what the wages of the people who made them were, whether people are being treated fairly, if products are sustainable and every other question you can think of, reports Christopher Morgan Fulfillment Services.
Fortunately, the Internet of Things (IoT) and newer technologies will be used to provide greater transparency into activities, and while blockchain technology has been widely touted as the ultimate solution to transparency, it does have some real problems when applied to shipment tracking. Proprietary information can be put at risk when used in blockchain technology, so blockchain technology is more likely to be used in areas that carry less risk and have fast value in transportation. In other words, blockchain technology will be more about shipment tracking than providing complete shipment and product transparency.
10. Openness to New Technologies Will Increase
Logistics professionals have an opportunity to push operations forward, increase productivity and leverage new technologies in 2018, but the ability to adapt will be priority in the mix of top transportation trends to arise from advanced technologies in the coming year. Logistics professionals must consider and evaluate the utilization new technologies, services and outside help from technology providers, either by a 3PL or some other entity. Inter-industry collaboration, even with competitors, are on the rise to beget new service lines, innovative technology, and overall process improvement in order to better deliver products and meet demands of the customer. In turn, this will redefine competitive advantage, transforming it from a state of secrecy and competition to a collaborative effort to the real customers, deliver on promises and exceed expectations.
What About the Role of Technology in Affecting Transportation Success in 2018?
Transportation technology is expanding to keep up with increased demand, and shippers need to know which technologies can make or break success rates in 2018. One of the top transportation trends to affect the industry in the coming year include automated transportation technologies.
What is the difference between transportation technology trends and supply chain technology trends?
The short answer is: not a heck of a lot! However, transportation focuses expressly on the movement of products, while the supply chain goes into deeper detail, including manufacturing processes, procurement, storage, and the flow of goods.
Although similar, the following will focus more on the big-scale technologies and their associated key concerns that will affect transportation in the coming months:
1. Big Data Utilized with other Automated Logistics Technologies to Improve Efficiency and Transportation
Big data is among the most important automated transportation technologies to affect transportation in 2018. Large-scale analysis of data is utilized to reduce inconsistencies, produce reports for quick decision-making and enable better merchandise and customer management. According to Edicom, the impact of big data will be further enhanced through cloud computing technologies. Powered by devices connected to the IoT, big data application analysis will lead to better asset tracking, increase productivity, better interaction of carriers and shippers, increase accessibility and less risk.
2. Big Data Will Get a Makeover
Back to big data; it is going to get a makeover in 2018. Big data has typically been about what is going on right now. It tells you what is happening and how it affects operations, which is known as descriptive analytics. This is the standard form of analytics used in transportation today, but it is transforming. Big data is empowering a new breed of analytics systems, truly transforming into the area of automated transportation technologies, capable of predicting potential failures and opportunities (predictive analytics) and detailing key actions needed to arrive at a best-case outcome (prescriptive analytics), explains the Logistics Bureau.
As explained by Logistics IT, advanced analytics algorithms can have a dramatic impact on other parts of transportation as well. They can improve warehouse management, reduce facilities costs, improve system integration, reduce risk and much more. Meanwhile, artificial intelligence and deep learning are using information gained from analytics to push equipment and systems to the proverbial limits. The ongoing self-optimization process of modern systems will give rise to smart, intelligent factories and transportation networks.
3. Cloud Computing Will Enable Elastic Transportation
Elastic transportation is a new concept on the transportation table. It refers to the ability to expand its capabilities to align with the demands of any given situation within a transportation operation. Flexible automated transportation technologies, as explained by Kushal Nahata of FarEye, enhance cost control, reduce limitations imposed by geographic restrictions, increases distribution channels, prioritizes deliveries, manages warehouses, and defines day-to-day operations, while adding real-time visibility and connecting all business processes to a centralized platform. Due to the vast and changing nature of elastic transportation, it must reside within cloud-based platforms, capable of rapid growth or contraction and fine-tuned through ongoing service and vendor support.
4. The Internet of Things Will Enable Service Expansion
The IoT is among the most remarkable automated transportation technologies in history. It connects devices, systems, people and products together in ways that have never been possible. In transportation, this new level of connection opens the door to new ways of management, ranging from inbound transportation in a warehouse to last-mile delivery and everything in between. Since providers will have more information, they can find new ways of reducing costs, increasing speed of delivery, offering new services and providing more bang for the buck to their clients. Service expansion is going to be a driving trend for increased use of the IoT throughout 2018 and vice versa.
5. Chatbots Will Be Used to Control Most Transportation Operations
Chatbots are voice controlled systems that interact with users to perform actions at a step in the supply chain, such as shopping, ordering, picking, and more and are expected to increase in demand and usage throughout 2018. According to the Logistics Bureau, the use of Chatbots will increase as bring-your-own-device (BYOD) movements in the workplace gain momentum. Similarly, the use of apps for transportation management will increase. Cross-platform development tools will enable integrations between existing systems and these automated transportation technologies, like chat-bots, in order to power the digital omnichannel supply chain.
6. The Robots Market Will Dominate in 2018 and Beyond
Robotics is set to change transportation more than any other area of the transportation technology trends in the coming year. As explained by i-SCOOP, Amazon’s acquisition of Kiva Systems robotics a few years ago, now known as Amazon Robotics, dramatically altered the robotic transportation landscape. Support for companies using Kiva robots diminished over the past years, and it is expected to end shortly. The decision by Amazon will result in increased development of robots for use in transportation and other functions in warehouses such as packing and picking. Further, we may see, as we are now in manufacturing, the rise of cobots, or collaborative robots, as coined by Rethink Robotics. The market is ready for the use of transportation robots to work in conjunction with the Industrial Internet of Things (IIoT), also known as industry 4.0. Cobots are involved in packaging, picking, shipping, delivery and visibility throughout transportation, but they are rapidly becoming key players in the artificial intelligence and data analytics movement.
By the end of the year, up to 30 percent of all new robotic deployments will use cobots that operate three times faster than existing robots deployed at the end of 2016. In other words, more robotic systems will be used for order fulfillment warehousing and delivery operations by up to 45 percent of mainstream global eCommerce and omnichannel commerce companies.
7. More Companies Will Explore In-House, Last-Mile Delivery Solutions
The demand for faster last-mile delivery is causing some major problems for shippers trying to implement in-house, last mile programs, says On Time Logistics. For many retailers, this will be difficult, requiring significant investment in two fleets, drivers, technology and additional resources to handle last-mile delivery.
Think about the typical costs associated with hiring and training drivers. Drivers credentials must be verified. They must undergo health and mental wellness exams. If a problem arises, the company must mitigate their losses. Creating in-house, last-mile strategies increases risk, so more companies will begin outsourcing last-mile delivery service in favor of meeting consumer demands.
However, last-mile delivery is not exclusive to home delivery, and it can include delivery to store. Ergo, ship-to-store and pick-up-at-store are last mile delivery options, and shippers can leverage existing brick-and-mortar stores to offer faster delivery to consumers. As a result, stores as a distribution center will become more popular throughout 2018.
8. Problems With Autonomous Delivery Will Become Evident
Autonomous trucks and drones are the 800-pound gorilla in transportation technology trends. They are the in-all solution to the concerns over the driver shortage, and they can save big bucks for transportation service providers. Unfortunately, self-driving trucks and cars are not yet widely available. Even when they can perform as their name implies, chances are good that regulatory agencies will act. This will result in added costs of using driverless vehicles, changes to insurance premiums and more.
Another side of the equation is labor; people are clamoring over the possibility of robotics, including driverless vehicles and tries, taking the place of human jobs. Although it might sound like a doomsday scenario, it is not a robot apocalypse. Driverless technology has a long way to go before it can be deployed on a nationwide scale, and 2018 will see more transportation service providers realizing the potential drawbacks to investing too much in autonomous delivery options right now. This also includes drone delivery. Instead, they will focus more on existing technologies and explore autonomous delivery with caution.
9. Safety and Cybersecurity Systems Will Be Top Priorities in Transportation Technology Trends
Safety and transportation will also come under the microscope in 2018. Recent hacks into nationwide companies have revealed potential cyber security threats throughout some of the most secure organizations on the globe, including Equifax. Furthermore, pushback against the new administration has led some states to adopt even tighter regulations, governing safety standards in the workplace and even if on a local level. As a result, transportation providers will be focusing more on safety. Increased demand for faster turnaround will also have an inescapable result of increasing the risk of accidents in the transportation process.
Workers are going to be moving faster and tends to result in a less-than-safe practice. Logistics providers that do not take the time to consider how safety will evolve throughout 2018 may be the recipient of unwelcome punitive damages and penalties on the part of injured parties or regulatory agencies. National regulatory agencies also understand that transportation companies will be doing overtime in 2018, so it is more likely that they will pass regulations sooner rather than later.
This will require the use of more advanced analytics to track employee performance and adherence to safety standards.
10. Transportation Service Providers Will Increase Mobile App Adoption
The rise of new technologies and the IoT will encourage transportation service providers to increase adoption of mobile apps. There are apps for trucking miles driven, freight sent, freight waiting to be sent, inbound orders, marketing leads, customer service interactions and more. Transportation companies can leverage information and capabilities via an app to reduce demand and effectively manage it. Freight sharing apps are one of the major app categories that will see a significant boost throughout 2018.
11. TMS Adoption Rates Will Soar
The use and adoption of transportation management systems (TMS) is expected to climb in 2018 and beyond, says Bridget McCrea of Logistics Management. A TMS has the value of being a “hub” for all transportation interactions and processes, including route planning and optimization, freight auditing and payment processing, carrier management and more. Furthermore, TMS applications have moved from terminal-based installs to cloud-based platforms, reducing delays in implementation, eliminating bottlenecks from downtime and improving cybersecurity simultaneously. As a result, more companies will adopt such solutions throughout the year to keep up with increased demand and to integrate into the increased use of the other aforementioned transportation technology trends.
Transportation Professionals Will Reach New Service Levels in 2018
Transportation professionals will have to consider a reevaluation of transportation strategy in 2018, but understanding a bit more about the top expectations can help them plan for success.
Transportation is moving forward, even as the industry starts to curve in on itself to handle increased demand, pressure to manage returns, fill more orders, and adhere to the latest regulations. Logistics service providers will be integral to the success of shippers in 2018, but the top transportation trends that affect the shipper can differ from those affecting third-party transportation providers, procurement professionals and freight shipping. The crux of these top transportation trends falls to the use of technology.
There are limitless possibilities and applications of these automated transportation technologies and more companies will begin deploying technologies to meet demand as the year moves forward. Within a mere nine months, the holiday shopping season will return, and transportation enterprises need to implement these technologies now if they hope to stay competitive. Of course, other technologies, like robotics, will continue to reshape the industry.
Transportation is poised to reap the benefits of technology in the coming year, and understanding these transportation technology trends’ implications will be key to success or failure. Consumers are only demanding more, and technology is the solution service providers have been looking for to move more product with fewer resources.
BIO: Adam Robinson oversees the overall marketing strategy for Cerasis including website development, social media and content marketing, trade show marketing, email campaigns, and webinar marketing. Mr. Robinson works with the business development department to create messaging that attracts the right decision makers, gaining inbound leads and increasing brand awareness – all while shortening sales cycles, the time it takes to gain sales appointments and set proper sales and execution expectations.