To stay relevant in today’s trucking and logistics industry and beat your competition, you need to digitize your business. In fact, experts predict digitization will soon determine who survives and who doesn’t.
Put another way, “digitalization is transforming your company and its business and operational strategies to take advantage of the current technology,” says Scott Simon, owner of Better Hire, a company that consults with organizations who want to take their business to the next level using data people.
You can thank the ever-growing shift from retail to e-tail. “As we see more and more companies come online, you’ll see traditional storefronts become distribution centers,” says Simon. “The big players will always continue to ‘cut out the middleman,’ but as others come online we’ll need more and more delivery capacity.”
In trucking, digitization, however, goes beyond your off-the-shelf trucking software and the sensor-fed data on your fleet of trucks. Digitizing your business is also managing and analyzing those vast volumes of data.
If you have yet to invest in digitization, you aren’t alone: research shows that half of shippers are aware of the benefits of digitization, while less than a third have actually adopted the technology or personnel.
Here’s the good news: there’s still time to get ahead of the curve. Some experts say it’s wise to have been cautious about investing heavily in new technology. Those same experts, though, also think the peak of digitization is on the horizon.
“Smart phones have changed the game in the logistics industry. What was once only available to the large players with complex transportation management systems, is now common in most off-the-shelf systems. The same technology that allows you to check on a loved one’s location has brought real-time data to the logistics industry. For every simple ‘your package has left here’ message, there’s massive amounts of data that allow companies to perform complex calculations to help with optimizations,” says Shane Hill, Director of Information Technology at Pace in Pelham. Pace is a company that supports the shipping industry by building versatile logistics solutions with locations throughout the Eastern U.S. “Over 80% of our deliveries require GPS validation. And every late delivery requires an explanation why via a status code entry—traffic, construction, weather, accident, etc. Through driver education we’ve been able to cut down on the misuse of status codes and taken our EDI score from an average of 85% to 98%,” says Hill. (A low EDI score can suggest inefficiencies, which may mean the average processing time is increased.)
To keep up with hungry digital retailers seeking ways to expand their market share, though, you need to invest in data analytics and strategy. And a logistics professional is a major piece of the puzzle. A data scientist/architect or data analyst can deliver deeper, actionable insights into operations, and give your company the market edge you need to stay current. Despite all of the data at your fingertips, it’s challenging to figure out how to use it. According to Simon, there are tons of free tools out there to bang against data, but you need someone to understand the data. “The individual you hire to interpret and analyze your data has to be smart enough to ask key business questions and determine how can they be improved upon with data,” says Simon.
Shane Hill is a great example. Hill (a Simon Pick) joined Pace a little over a year ago and since he and his team have improved Pace’s package volume forecasting and made it highly accurate during one of the most challenging times of year—the holidays—to then bring the right number of drivers. “With most seasonal work, there’s a fair amount of turnover. By capturing historical data and applying models, we were able to reduce the number of backup drivers by 40% and still meet demand,” says Hill. Hill has also successfully leveraged internal and external data to bring their customers more competitive rates.
With the right data person in your organization you can also more efficiently manage your fleet. That includes things like analyzing vehicle data, live weather, and traffic reports simultaneously to optimize delivery routes in real time, as well as tracking deteriorating vehicle performance and scheduling maintenance to avoid costly downtime. All of this has the potential to yield an uninterrupted flow of goods and services, which will lower costs. “Think about data as a profit center,” suggests Simon. “For example, if you know which trucks are due for service, you can do bulk orders of parts, and bulk orders mean lower costs. But not the buy ten, use five and have the other five sitting in your warehouse somewhere. You buy five because you know that’s what the data told you.”
And perhaps most importantly, effectively using data allows your company to better serve clients and retailers. “Using geofence, we increased on-time delivery for one customer by over 90%,” says Hill. “It also helped us us understand where there were true issues versus human factors.”
As Simon rightly points out: “We live in an age of empowered consumers. Accurate, near real-time data is key to keeping the consumer informed and happy.”