4 Supply Chain and Logistics Trends for 2019

The integration of technologies and the digitization of supply chain and logistics will continue to transform the industry in 2019.

Last year, changes in global markets and the boom in e-commerce increased consumer spending and expectations significantly. According to Statista, 21.1 % of supply chain executives found visibility to be the top challenge facing supply chains in 2018. In second place, 19.7% of respondents believe fluctuations in consumer demand was the most significant obstacle. The industry responded with the integration of innovative emerging platforms such as artificial intelligence (AI), predictive analytics, cloud technology and machine learning. This also led to the development of data-driven and predictive solutions that enabled companies to focus on providing personalized, customer-centric experiences.

At the beginning of last year, Morai Logistics discussed the Fourth Industrial Revolution known as Industry 4.0. The need for digital integration and adoption has indeed shifted from being an attractive add-on to a necessity to survive in changing markets. Despite hesitation to risk, change and integration, digital transformation is being progressively adopted by many industries, especially in supply chain and logistics. According to expert forecasts on future trends in supply chain management,

…over the next five years about 80% believe ‘digital supply chain’ will be the leading industry model

Indeed the last year has seen incredible resilience from transportation supply chains against the disruption caused by digitization. However, what trends will be at the top of the list this year?

This article reviews 4 supply chain and logistics trends of 2019.

1. Capacity Crunch

In March of 2018, Morai Logistics discussed the nationwide truck shortage and its effects on deliveries and rates. This year, the diver shortage will continue to require third party logistics (3PL) providers to improve their services. They provide shippers with solutions through ‘network connections, competitive volume rates and ongoing integration of information technology’.

2. Transportation Regulations

Another industry trend hat will carry over from 2018 and cause turbulence, is electronic logging devices (ELDs). Despite being introduced into the industry back in 2012, ELDs were officially mandated in 2017. Although this is a positive move to monitor the health of drivers, it has remained a top stressor for the industry.

3. Digitization

As mentioned above, digitization will continue to impact the transportation supply chain industry this year. The adoption of technologies, apps and emerging platforms in response to consumer demand will become necessary to compete with changing markets. Data analytics will be a major player this year as companies will have to assess ‘supplier risk, tariff risk, logistics costs or manufacturing costs’. In addition, AI and machine learning will be two significant technologies of 2019.

According to Forbes, machine learning will impact the following areas:

  • Warehouse management systems
  • Robotic vision systems
  • Supply chain planning
  • Supply chain visibility

4. Warehousing

According to Deloitte, by the end of 2018, ‘online sales of consumer products were project to increase 350%’. The dollar value of would equate to ‘USD$36 billion’. With over 2.14 billion people expected to shop online by 2021, the ecommerce market is significantly impacting consumer demand. This increase in expectations on service and delivery will require warehouses to focus on direct-to-consumer fulfillment.

What does this look like? Experts see a widespread adoption of automation and adaptable and scalable solutions such as robotics and drones. This will be highly important for the retail industry. Furthermore, improved strategies on ‘design and location’ of warehousing will ensure products are within range of consumers to guarantee fast delivery. The added pressure to expand, innovate and adopt new technologies will also have a significant impact on the labour force. Wages are expected to increase across supply chains, which should motivate companies to create ‘employee engagement programs’.

The above supply chain and logistics trends are four of many that will shape the industry this year. In order to develop solutions geared toward improving the customer experience and combating consumer demand, technology will continue to play a significant role in 2019.

How Supply Chain Orchestration Improves the Customer Experience

Experts recommend supply chain orchestration as an effective solution to help organizations deliver positive customer experiences.

When it relates to personalization, 76% of customers expect companies to understand their needs and expectations. Findings also indicate that 67% of customers have switched vendors to seek ‘a more customer-like experience’. Customer expectation is a significant driver to the way organizations operate. Providing both convenience and speed is crucial to building a customer-centric business and building long term relationships with those customers.

Logistics are learning to adapt to the demands of customers, and organizations are seeking the most effective solutions to remain competitive. Supply chain orchestration (SCO) has been connected to providing a positive customer experience. According to supply chain experts,

SCO enables you to make informed, conscious choices about how to serve your customers better.

Orchestration benefits ecommerce markets in particular because it increases a customer’s accessibility to a larger variety of products and services. Therefore, customers are provided with a wider variety of delivery options due to an expansive ‘network of operators and carriers’. In addition, SCO also provides a variety of benefits that help close the gaps when it comes to visibility and efficiency.

This article uncovers the foundation of supply chain orchestration and how supply chains can leverage it to better the customer experience.

Supply Chain Orchestration Foundations

To understand how supply chain orchestration improves the customer experience, it’s important to first understand the need for SCO. As mentioned above, consumer demand is changing dramatically in response to a variety of factors including a significant increase in accessibility. For instance, customers who shop online are becoming increasingly expectant of fast delivery, personalized customer experience and order fulfillment.

A poor experience can influence a customer’s intent to re-purchase. Research found that 67% of customers would stop buying from a company if a competitor offered a better experience. Omni-channel touch points and visibility must be a core focus to organizations who cater to different generations and demographics. To ensure all consumer demands are being met, a seamless supply chain operation must be implemented.
According to Supply Chain 247,

Successful SCO is based on the right blend of elements for end-to-end oversight and control, but at the root, it is driven by a desire to put the customer first.

The goal is to create a supply chain network that takes into consideration both the bottom line and customer experience.

The Benefits of SCO

By implementing SCO, you will provide a variety of benefits to improving customer satisfaction in a cost-effective way. Inbound Logistics identifies a number of trends supply chain orchestration can provide.

1. Increase Visibility

Personalization is only successful when an organization can understand the needs of their customers and deliver. SCO enables organizations to take a holistic look at their entire supply chain. Thus, they’re able to optimize their processes to delivers ‘the maximum volume of on-time, in-full orders’.

2. Optimize Inventory

An increase in orders requires organizations to ensure warehouses and inventories are abundantly stocked and ready for delivery. Therefore, experts suggest streamlining their networks which includes ‘warehouses, 3PLs, suppliers, and in-transit stock’.

3. Maintain Efficiency

As supply chains strive to meet increased demands, they become complex. This complexity may sometimes hinder the customer experience. According to their findings, Inbound Logistics found 95% of global companies agreed that discrepancies had increased. Implanting SCO would help create better processes that stimulate progression through the coordination of the right ‘internal and external systems.’

Organizations should continue to focus on creating innovative and creative ways to improve the customer experience. This is primarily important today because of the incredible level of accessibility online shoppers have. Based on the above information, supply chain orchestration proves to be an effective way to ensure a positive customer journey. Therefore, organizations should continue to look at ways such as SCO to optimize their supply chains.

Morai-Logistics-Blog-season-for-third-party-logistics-providers

As the holiday season approaches and the expectations of efficiency and on-time delivery increases, 3PLs must optimize their solutions.

The Christmas holiday season provides many industries with the opportunity to significantly increase their revenue. By the end of this year, retail sales between November and January 2019 are forecasted to ‘top $1.10 trillion’. The reason behind the industries success can partly be attributes to e-commerce sales, which are also projected to increase 22% throughout this holiday season. In comparison to $110 billion in 2017, e-commerce sales are expected to reach $134 billion this year.

To ensure customers experience a positive shopping experience, companies are amping their game in a various ways. According to Deloitte, vice chairman of Deloitte LLP, Rod Sides, states

We’ve seen retailers continue to advance their approaches to shipping, delivery, in-store experiences and tech-enabled commerce.

Sides also defines those companies who will succeed this holiday season are those who exhibit ‘the right balance between innovation, experience and value.’

The holiday season for instance, is a prime time to shine for third party logistics providers (3PLs). By providing optimized solutions to help their clients optimize their customer journeys, 3PLs can leverage holidays to build relationships with customers.

This article by Morai Logistics discuss how 3PLs are an important service partner this holiday seasons.

Top Driver’s This Holiday Season

There are a variety of reasons 3PLs brace themselves for the holiday season. The retail sales industry is projected to prosper significantly this season, by a combination of ecommerce and brick and mortar. Consumers can complete all of their holiday shopping online, without even stepping foot into a store. An increase in convenience and accessibility also increases the ability for shoppers to purchase faster and more frequently. This places considerable pressure on supply chains to ensure:

  • On-time delivery
  • Transparency
  • Cost-effective rates
  • Personalization

However, despite the holiday season, the rise in consumer demand has been nothing short of new for 3PLs. Advancements in technology has forced organizations to compete within a saturated market of providers who offer similar services. This heightens even more during the holiday seasons as organizations must choose the best service providers for their customers. In addition to a peak in orders and next-day delivery, setbacks caused by weather can significantly impact the shipment lifecycle. Let’s take a look at the top reasons 3PLs are an important partner for organizations looking to prosper this holiday season.

Speed is becoming a primary determinant of consumer preference. By 2019, statistics show that 65% of retailers will offer same-day delivery. This transition from concept to standard practice requires companies to seek solutions that will ensure real-time operations.

Visibility

During the holiday season, setbacks in deliveries can disrupt the customer experience, especially when there is a lack of visibility. Once a consumer selects a product, they pay close attention to the shipment life cycle via tracking codes or order updates. It’s important for companies to choose organizations such as 3PLs who can offer a level of transparency that will keep their customers happy.

Efficiency

In addition to speed, another important factor that supply chains should focus on is efficiency. On-time deliveries are essential for companies competing in saturated markets. Aside from transparency, 3PLs also prioritize orders arrive as scheduled. Therefore, hiring service partners such as 3PLs is important to ensure consumers receive their product in a timely and efficient manner.

Inventory Management

For the retail industry in particular a large influx of in-store inventory is not ideal. 3PLs offer optimized warehouse management solutions and technologies that can effectively manage, track and store your stock.

Distribution Centers

E-commerce has made shopping accessible from anywhere across the globe, which increases the need to ensure consistency in order fulfillment. 3PLs often have many distribution centers spread across the country, which helps organizations house product closer to customers.

There is no denying that the holiday season is a busy time of year. Partnering with the right third party logistics provider is important for organizations looking to increase revenue and create a positive consumer experience.

Morai-Logistics-Blog-fast-fashion

Businesses within the retail industry are rolling out vertical integration supply chain models to keep up with fast fashion.

Research on the global fashion industry predicts an increase from ‘$481.2 billion in 2018 to $712.9 billion by 2022’. Innovative technologies are a direct contributor to this progression, as they help companies create ‘experiential eCommerce’ for shoppers. For many industries, digitization is enabling companies to offer customers Omni-channels of shopping touch points. Thus, increasing purchasing power and an even greater expectation to deliver orders in an immediate and timely fashion.

Despite positive growth, one of the most influential challenges in the fashion industry is the ability to keep up with ‘fast fashion’. Fast fashion is an industry buzzword, that is defined as,

An approach to the design, creation, and marketing of clothing fashions that emphasizes making fashion trends quickly and cheaply available to consumers.

The New York Times states that ‘faster fulfillment’ is becoming increasingly important to ensure customers remain happy. The idea of getting product from the manufacturer or store-front to consumer in a timely and speedy process is integral. To help roll this forward, brand name organizations, such as Zara and H&M, are implementing a vertical integration (VI) supply chain model. Their hope is to ‘enable faster decision-making’, while also improving the overall customer experience.

This week, Morai Logistics looks at the benefits of a VI supply chain model, and why it’s becoming increasingly adopted by companies within the retail space.

The Fashion Industry Today

The fashion sector faces three main challenges today, which include an increase in consumerism, the need for creating unique customer experiences and inventory management. Finding one solution to meet every need is unlikely, which is causing retailers to consider shortening their supply chains.

According to Logistics Bureau, the conception of ‘fast fashion’ was influenced by Zara, a leading European clothing brand. Fast fashion is a category management concept that helps this global retailer meet the demands of their customers looking for ‘high-fashion style articles of clothing at a low price’. It enables fashion companies the opportunity to consistently roll out new products into their stores. This helps support seasonal and trending lines that are constantly changing throughout the year. However, if the wrong integration model is implemented, it can be challenging for companies to meet these demands.

Vertical Integration Supply Chain Model

Traditionally, horizontal integration has been the ‘go-to value chain strategy’. Companies looking to grow their business ‘at the same point within the supply chain’ follow this model. However, the fashion industry requires a highly agile supply chain that takes into consideration both speed and cost. In this case, vertical integration supply chains are the most effective.

By definition,

Vertical integration occurs through the merger or acquisition of companies at different stages of production or distribution within the same industry.

To accommodate and support the demands of fast fashion, this integration model helps to strengthen the supply chain. In addition, it addresses the above challenges by giving retailers a competitive advantage over other companies that haven’t adopted an integration model. It also enables them to offer ‘lower costs, high-quality and personalized products’, which ultimately positions their company as a top choice to consumers.

In addition to the differentiation, this model also benefits companies in the following ways:

  • Control of value chain
  • Reduction of distribution costs
  • Increases ‘access to more production inputs, distribution resources and process and retail channels’
  • Alignment of pace with changing fashion trends

As retail companies continue to roll out new products, they must develop processes that execute both speed and cost. Therefore, vertical integration can help companies create strong, agile and proactive supply chains that will meet changing consumer demands.

Morai-Logistics-AR-VR

Augmented reality (AR) and virtual reality (VR) are ‘revolutionary’ emerging platforms that are changing the game for supply chains.

From reducing cost to improving efficiency and accuracy, AR/VR could significantly impact the way orders are processed and shipped. The Global Augmented and Virtual Reality market is expected to reach ‘209.2 billion U.S. dollars by 2022’. With the ability to enhance any version of reality, this technology could change the way we move product from point A to B.

On the retail side, AR/VR is enabling customers to engage with products and their features without even stepping foot into a store. It also provides personalized experiences through the creation of ‘virtual fitting rooms’ and ‘virtual maps’. From a marketing and advertising perspective, there is a considerable amount of value that comes from the creation of ‘VR- and AR-powered campaigns’. It provides companies with the opportunity to give their consumers a real-time experience with their products.

In addition to machine learning and predictive analytics, AR/VR technology is also a game changer for the supply chain and logistics industry. From improving training and education, to ensuring a ‘cost-effective, fast and error free’ shipment lifecycle, there are significant benefits.
This article explains the technology behind AR/VR and uncovers how supply chains can use this platform to improve their processes.

A Brief History

Although AR/VR has become popular in the digital world only recently, the concept behind augmented reality dates back to 1957. Cinematographer, Morton Heilig, created the first ‘attempt at adding additional data to an experience’ known as the Sensorama. Almost four decades later in 1990, researcher Tom Caudell, creates the term we refer to now as augmented reality.

According to Investopedia, by definition,

Augmented reality combines real and computer-based scenes and images to deliver a unified but enhanced view of the world.

Virtual reality takes the experience once step further for users by immersing them in a ‘fully artificial digital environment’. Rather than simply enhancing a version of reality with images, they can actually move and hear. VR applications are also compatible with smartphones, which provides consumers with new and convenient ways to shop nd interact. With the ability to create accurate and immersive versions of reality, this technology provides the opportunity for supply chains to improve their processes and operations.

AR/VR in Supply Chains

As the expectations of on-time deliveries, efficient service and personalized customer experiences increase, there is a need for more supportive technology. According to Forbes, AR/VR help combat the varying complexities facing the supply chain and logistics industry today. As mentioned, this is a cost-effective solution that could also contribute to creating ‘fast, and error free’ shipment lifecycles.

The following scenarios describe how AR/VR can improve supply chains:

  • Provides real-time information on ‘manufacturing facilities, distribution centers, and warehouses’.
  • Delivers products on-time by providing the best transportation routes.
  • Reduces the possibility of damage by providing detailed information of all packaging and contents to improve transparency.
  • Reinforces security by providing drivers with ‘facial recognition technology’ to confirm customer verification.

Industry Reviews on AV/RV Technology

Mehdi Miremadi, Partner at McKinsey & Company, states that this technology creates ‘business value in supply chains’. In addition, statistics show that order fulfillment saw a 30% – 40% improvement last year, while productivity and workflow management also progressed. Senior Principal Analyst at Gartner, Tuong Nguyen, also supports this technology, as he believes AV provides effective training and onboarding to enhance worker capabilities.

The decision to apply an emerging platform to any organization is daunting. There is a lot of consideration that must come with the investment and integration of new processes. However, when applied to supply chains, experts are in favour of AV/RV.

morai-blog-ebook-supply-chain-sustainability

From meeting consumer demands to building credible and corporately responsible brands, Supply Chain Sustainability (SCS) is integral to an organizations success.

In addition to achieving transparency, flexibility and speed, supply chains must also consider sustainability as a top priority. SCS encompasses the economic, social, legal and most importantly, environmental features of a supply chain. It helps reduce an organization’s carbon footprint, and also ‘builds brand awareness, mitigates risk and develops long-term profit opportunities’.

As Omni-channel transportation relies on a variety of transportation methods that release emissions, skeptics may argue that it’s very challenging for a holistic supply chain model. However, statistically “almost 90% of CEOs believe that sustainability is important to their companies success.”

This eBook by Morai Logistics, takes a comprehensive look at supply chains sustainability and identifies the benefits it provides organizations.

Integrating Sustainability Into Logistics and Supply Chain

morai-logistics-ebook-supply-chain-sustinability-image

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? Interested in what we do as a 3rd party logistics provider? Then don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news.

Morai-Logistics-women-entrepreneurship

The Canadian government is making a significant investment into providing financial support and opportunity to women entrepreneurship.

On Friday, October 19th, 2018, Canadian Export, Promotion Minister, Mary Ng, announced a $20 million government fund toward supporting women in business. This contribution is in addition to an $85 million Women Entrepreneurship Strategy Ecosystem fund implemented last month. Women entrepreneurs could receive up to $100,000 toward growing their businesses.

According to Statistics Canada, there is a direct link between business ownership and ‘innovation, job creation and productivity growth’. Women entrepreneurs are considered an integral driver to the economy. However, ‘access to venture capital funding’ is a top barrier for women business owners in Canada. In comparison to their male counterparts, there is still evidence of gender inequalities that make business ownership challenging.

The creation of the Women Entrepreneurship Strategy is a progressive step forward. This article looks at the current barriers women entrepreneurs face in start-ups and the key benefits of supporting their ventures.

Women Entrepreneurship Strategy

Government initiatives, procurement and community support bring positive solutions to combating barriers women face. The goal of the Women Entrepreneurship Strategy is to help women from diverse backgrounds start-up and scale their businesses. Funding will also provide women with networking opportunities, mentorship resources and access to financial help.

The program gives ‘indigenous women, women with disabilities, recent immigrants, visible minorities and women in rural or remote regions’ priority. Specific sectors that are key contributors to the economy, such as advanced manufacturing, digital and international ventures, will be taken into consideration first. By 2025, this funding should ‘double the amount of women-owned and women-led businesses’ in Canada. Initiatives like this are necessary for helping them overcome barriers.

Barriers to Women-Owned Start-Ups

While funding is a top barrier, gender inequality continues to challenge women’s progression. Small and medium sized enterprises (SMEs) that are majority-owned by women, only represent less than 16% of Canadian businesses. When it comes to launching a new company or scaling up, there is still a difference in accessibility to external investors. In an article written by Global News,

Almost half the women surveyed as part of the study reported that they had trouble securing the external investment needed to scale, whereas almost 70 per cent of men surveyed said they found it easier.

Launching a business or scaling up requires start-up capital and financial support. While many ambitious sole proprietors want to do it on their own, this isn’t always possible. In fact, 70% of surveyed women stated they financed their small business through ‘personal credit card debt’.

When it comes to pitching a business, the statistics are no different. Women who made the same business proposal were funded ‘32% of the time’, whereas men were considered ‘68% of the time’. These differences in financial opportunity can hinder their ability to start their own ventures. It’s important for government initiatives to step in and provide support as women make considerable contributions to the economy.

Women are Economic Drivers

Earlier this year, Morai Logistics, discussed the importance of supporting supplier diversity in Canadian business. Within this article we highlighted women’s contributions to the economy. Findings indicate that ‘nearly 1 million Canadian women business owners’ contribute to ‘more than $117 billion annually to the Canadian economy’.

Speaking on the Women Entrepreneurship Strategy, Senior advisor on the Canadian Economic Growth Council, Carol Anne Hilton, shared her perspective. She believes that women ‘focus on human experience, on relationship’, which she believes is a ‘missing part of the equation. As business owners and leaders, women contribute something very unique to the table. For instance, they are collaborative and enjoy working together to achieve business objectives. Their ability to adapt also enables them to stay resilient and ahead of changing markets.

In order to drive the development of women owned businesses, continued funding through initiatives such as the Women Entrepreneurship Strategy must continue. It’s important to provide equal opportunity to women and minority groups and remove systemic barriers that disable them from driving our economy.

Morai-Logistics-Blog-truck-platooning

Experts believe last-mile logistics can effectively build brand loyalty by significantly improving the customer experience.

From a global market perspective, immediate and fast delivery is becoming a critical necessity to a company’s success. In fact, a staggering 88% of consumers who participated in the 2018 Global Consumer Insights Survey, confirmed they would pay more for ‘same-day or faster delivery’. To an online shopper, the process of dropping product into a shopping cart and checking out seems relatively simple. However, the movement of transporting product from the manufacturer, to the distribution center, to the end user, is far more complex.

To differentiate themselves from the competition and build brand loyalty, companies, especially in the retail space, must focus on last-mile logistics.

Delivering to E-commerce Markets

Over the course of the past several months, Morai Logistics has highlighted a significant rise in e-commerce shopping. Statistically, this global market will continue to generate sales that reach an impressive $4.5 Trillion by 2021. Omni-channel retailing has also given customers the ability to purchase product across a variety of platforms and devices. When buying becomes more and more accessible, competition for customer loyalty also increases. Delivery has been linked to being a significant factor in motivating customer preference.

As mentioned above, today, almost 90% of surveyed customers would opt to pay extra for same-day shipping. This figure has significantly increased over the course of the last few years. In 2016, McKinsey found that nearly

25% of consumers are willing to pay significant premiums for the privilege of same-day or instant delivery.

This reinforces the growing need for companies to seek innovative delivery solutions to remain competitive and improve the customer experience. Shifting from traditional networks that include large parcel carriers, to last-mile delivery methods, has proven to be a ground-breaking move.

Last-Mile Logistics

To improve the customer experience, retailers are beginning to take a closer look at last-mile delivery. This is the final step in the delivery process and efficiency is critical in order to meet the rise in online purchases.  According to Datex, last-mile delivery is defined as,

…as the movement of goods from a transportation hub to the final delivery destination.

Business Insider describes this phase as ‘the most expensive and time-consuming part’ of the shipment lifecycle. However, it remains an important factor in improving customer satisfaction. To combat the inefficiencies of last-mile delivery, there are variety of solutions that transportation and logistics providers are focusing on. Datex outlines them as follows:

  • Robots
  • Local Delivery
  • Uber Delivery
  • Click-to-collect

Third Party Logistics providers (3PLs) are also leveraging these solutions in order to compete in an industry challenged with capacity crunches and driver shortages. There are a variety of benefits that help promote efficiency and access to real-time data. Backed by technology, last-mile logistics helps 3PLs ‘manage peak times, routes and costs’. In return, retail customers receive their packages on-time and in good condition, and shippers and retailers avoid unnecessary costs associated with inaccuracies and returns.

Brand Loyalty

To ensure customer demand and satisfaction in today’s digital marketplace, companies must seek innovative methods for transporting goods. In every organization, building positive brand loyalty should also be a key focus. Customers will pay for a better customer experience, and there is high ROI from investing in existing clients. According to Fundera, ‘43% of customers spend more money on brands they’re loyal to’.

When customers are provided with personalized solutions, they will be more inclined to return for additional business. Supply chains know that customers are demanding immediacy and transparency. Since 56% of customers exercise brand loyalty toward companies who “get them”, this should propel supply chains to invest in innovative last-mile delivery solutions.

morai-infographic-4-factors-to-consider-when-optimizing-your-supply-chain-cover

With an ability to offer transparency, efficiency and speed, Blockchain has been coined a ‘game changer’ in the supply chain and logistics industry.

According to Research and Markets, the ‘global blockchain supply chain market’ is will grow ‘from USD 145.0 million’ this year to n expected ‘USD 3,314.6 million by 2023’.

This statistic represents the powerful impact this global digital ledger has made on the way industries make transactions. Supply Chains are currently facing challenges as markets expand, consumer demand increases and e-commerce platforms continue to emerge. However, only 11% of organizations with a working understanding of this technology. Therefore, it’s important to investigate the benefits this technology provides.

This infographic outlines how blockchain will continue to become a valuable technological asset to the supply chain and logistics industry. In addition, it aims to outline how this technology can help organizations improve transparency, cybersecurity and efficiency.

How Blockchain Improves Speed, Security & Transparency

 

morai-infographic-3-Ways-Blockchain-Adds-Speed-Security-Transparency-to-Supply-Chains

Morai-Logistics-Blog-truck-platooning

Experts on transportation supply chain and logistics say that truck platooning may help drive efficiency in today’s demanding market.

In a special feature this month, Forbes revealed 4 Forces Transforming Logistics, Supply Chain And Transportation Today. Aside from political and economic shifts, and the recently discussed peak in consumer demand, ‘frontline technology’ also made this list. The industry is looking for ways to address efficiency, in a time where driver shortages continue to fall. Possible solutions include a shift toward autonomous vehicles, however, there is still a long way to go before complete transformation. In their article, truck platooning is referred to as the ‘next big step’. It has gained considerable attention in the industry as a solution to efficiency.

Autonomous Trucking

Although autonomous vehicle technology is far from fruition, statistics on market growth reflect the industries investment in full integration. Figures show that by 2025, ‘partially autonomous vehicles’ will value USD 36 billion, and ‘fully autonomous vehicles’ is expected to reach USD 6 billion. While consumers are favouring the integration of innovative ways to travel, the self-driving truck market is also progressing. According to Market Watch:

Global Autonomous Trucks Market is growing at 15.6% compound annual growth rate during forecast period of four years from 2018 to 2023.

On-road transportation is the most common mode for moving goods worldwide. Therefore, it makes sense that the industry is investing in ways to improve efficiency. When technology integration and transportation supply chains fused together, researchers created truck platooning.

The Rise of Truck Platooning

According to the European Automobile Manufacturer’s Association (ACEA), truck platooning uses ‘connectivity technology’ and ‘automated driving support systems’. The concept involves linking two or more trucks together as they travel in a convoy style manner from point A to B. The innovative technology still reflects reality based system where there is a leader that can direct and guide those following behind. Despite this significant advancement, these trucks still have drivers along for the ride. The industry is not at a stage to release fully-automated systems just yet. However, news coverage has reported that the use of semi self-driving vehicles are underway.

Semi-autonomous trucks are being tested in various parts of North America. CBC comments that Peleton Technologies is already testing synchronization of speed and braking being tested on two or more trucks. Their motivation to push-out this initiative is to improve ‘fuel efficiency by decreasing wind resistance’. This leads us to question the benefits of connective technologies, such as truck platooning.

Benefits of Self-Driving Convoys

In recent months, Morai Logistics has discussed the importance of transparency, efficiency and speed. Now more than ever, organizations in the supply chain and logistics industry must work harder to stay ahead of the competition. This means investing in research and development, and looking at options to optimize their shipment lifecycles.

There are a variety of benefits from the integration of autonomous vehicles in the transportation industry. In addition, the emergence of any technology provides opportunity for both the labour force and other sectors. The top benefits include:

  • Efficiency – autonomous trucks helps meet efficiency and on-time delivery needs, while giving drivers the opportunity to complete administrative function.
  • Improve Safety – drivers who drive for long periods of time are able to rely on advanced safety features such as immediate braking.
  • Sustainability – research states that self-driving vehicles can significantly ‘lower fuel consumption and CO2 emissions.

Overall, truck platooning is an example of how technology is being used to address current barriers within the transportation and supply chain industry. The need to improve the shipment life cycle continues to fuel how we innovate our transportation methods.