The race to “digitize” our freight networks is not necessarily winning the hearts and minds of truckers everywhere. Indeed, more than a few folks – myself included – worry about how the disruption caused by digitization could lead to job losses and other adverse effects, particularly where autonomous trucks are concerned.
Yet a recent panel discussion hosted by research firm Stifel Capital Markets and moderated by Tommy Barnes, president of project44, provided some new perspective on “digitization” and how, as a strategy, it may actually be aimed at making the working life of those involved in freight transportation a whole lot better.
Barnes pitched questions to Rob Estes, president & CEO of LTL carrier Estes Express, and Jennifer Schopfer, vice president of GE Transportation’s transport logistics division, to illuminate why digitization is a critical step all participants in the supply chain – from truckers and railroads to warehouse operators and shippers/receivers themselves – must take.
And Barnes laid the issues out in rather blunt fashion to kick off the discussion.
“This is all about getting true end-to-end visibility in supply chain.” He stressed. “We get the same questions every week, every day, every hour, and even every minute: Where is my product? How will bad weather affect delivery times? Why is my inventory not mapping with my TMS [transportation management system]? It’s all because the points within the supply chain are fragmented – and many dollars are associated with these broken processes; revenue dollars as well as productivity and efficiency dollars.”
It all creates what Barnes dubbed a “disconnected” shipment life cycle, which leads to unhappy customers, customer churn, plus significant added-in cost and limited visibility of cargo in transit.
“All of those things are problematic today. Shippers manage thousands of shipments every day and errors compound dramatically,” he explained. “Over 60% of shippers have exceptions with shipment in some way, shape, or form; that leads to a lot of manual work and leads to customer being unhappy.”
To that end he believes achieve seamless layer of visibility across the “life cycle” of freight shipments is key – and that accurate data and processes are “ultra-critical” in terms of achieving that goal. Accurate data “leads to smart decision-making and when the end-result is a happy customer, that is what matters the most,” Barnes said. “At the end of the day, your goal is to start with right and accurate information and then move up the ‘value curve’ to prescriptive analytics. It’s a ‘buzzwordy’ term but if you acquire the right data and use it the right way, there is a lot of benefit to be had.”
Schopfer used her ongoing work with Port of Los Angeles to create a “one stop shop” for freight container information as an example of how “digitization” helps improve human work processes. “Essentially what we are doing is reaching across data silos within various supply chain systems – marine terminals, shipping lines, and railroads, among others – and then sharing that date across the entire ‘ecosystem’ to chassis providers, trucking companies, and NVOCCs [non-vessel operating common carriers]. Everyone party to handling a shipment 1then can get up to 14 days of advance notice in some cases – enabling better planning and better [freight] throughput.”
She added that as of right now, railroads, truckers, and chassis providers get no information about inbound cargo until two or three days in advance at best.
“If they can all get that 14 day notice in advance with destination, time of arrival, etc., it helps them better plan equipment, especially if they see a spike of 40-foot containers coming in over a six day span,” Schopfer noted.
For truckers, GE is building a “universal appointment schedule system” as a way return empty containers easier and faster. “Right now [at the port] they are working through 13 different terminals and three different websites,” she said. “Simplifying all of that into one place and keeping it up-to-date in real time will help truckers make their turn times faster. Ultimately all of that benefits the shippers and their ultimate customers.”
By the time the system is fully operation, which is expected by July of this year, Schopfer expects to see an “eight-fold impact” on productivity due to the “layering effect” of getting container data earlier in the arrival process and having it centralized in one location.
Estes noted that “robotics” offers exciting opportunities in the LTL space to take over “repetitive function” work that’s been done manually and to do it with a higher degree of accuracy.
“Normally in LTL a shipment is touched by 20 to 25 people – that’s a lot of handoffs,” he explained. “So we are really trying to automate that process when freight is tendered; that is very important, to have that whole process automated, because, when truck leaves our dock it is like perishable fruit – when it leaves, it is gone forever.”
Estes point is that with the current driver shortage and equipment capacity being tight, a carrier needs to ensure they are fully utilizing every component in their network. “We are rolling out this year a pickup and delivery route optimizing system with suggested routes to avoid left hand turns, optimize customer times and receiving times, etc.,” he said. “In the past, we relied on a driver to keep all of that in his mind. By using technology, though, we optimize routes to add up to an extra shipment per day per driver. That is a huge opportunity and we think we will have that with this technology.”
Estes also stressed that “the speed of change is accelerating geometrically” in the freight business, as technology is taking trucking in particular “from the stone age to the modern age” in rapid fashion.
That's why keeping up with that change – and the demands of customers now accustomed to two days or fewer shipment times due to their e-commerce experience – means this digitization trend will only become more critical.