Adroit Market Research - Industry Insights

The connection between technological advancements and transportation & logistics is not anything new. Many companies such as FedEx, Walmart have been implementing RFID barcodes and tags since decades. However, growing digital connected innovations is the major current trend in this industry. Digital technology is proving a huge array of new possibilities.

Nowadays, transformation & logistics industry is facing challenges such as innovative competitors and disruptive technology startups which are increasingly employing digital technologies to enhance business models. Fields in which such startups are disturbing to comprise the supply chain, asset & sensor tracking, digi

The connection between technological advancements and transportation & logistics is not anything new. Many companies such as FedEx, Walmart have been implementing RFID barcodes and tags since decades. However, growing digital connected innovations is the major current trend in this industry. Digital technology is proving a huge array of new possibilities.

Nowadays, transformation & logistics industry is facing challenges such as innovative competitors and disruptive technology startups which are increasingly employing digital technologies to enhance business models. Fields in which such startups are disturbing to comprise the supply chain, asset & sensor tracking, digital freight shipping, logistics & supply chain analytics, last-mile delivery, fleet management, inventory management, warehousing, and e-commerce logistics.

Emerging Technologies in Transportation & Logistics Industry and Their Significant Impacts

•          Internet of Things (IoT)

The Internet of Things offers several innovative features in “Vehicle Telematics” technology. The technology may have a significant economic impact of more than USD1.9 trillion on supply & logistics chain within the next few years.

The IoT technology operates in 3 levels such as data processing and exchange infrastructure, software tier, and the connected hardware. It can track any virtual object such as picking cart, delivery vehicles, and inventory items. With the integration of IoT solutions, transportation, retail, and manufacturing industries can trace and monitor goods’ in real-time and guarantees good delivery in the appropriate time as well as condition. In addition, IoT solutions allow the transportation & logistics industry to evaluate demand depending on the automated inventory replenishment and historical data.

•          Artificial Intelligence (AI)

With the high availability of AI-based analytics solutions and cloud managed services, and the significant growth in IoT devices enabling software engineers to transfer information processing near the networking age become manageable with the help of IoT technology.

In this modern era, artificial intelligence can offer a huge amount of spoken and textual interactions. However, the comprehension capability of artificial intelligence i.e. speech-to-text algorithm have already surpassed humans. The technology is transforming a huge amount of visual information in system content.

•          Blockchain Technology

The blockchain technology offers several innovative features in terms of distributed ledger technology which hugely falls to digital self-executing contracts that enable industries to involve in the process of good distribution to automate the billing process, reduce commercial and bureaucracy process inefficiencies such as secure payment transactions, human error, and improve supply chain transparency.

In addition to this, a blockchain-enabled logistics system may store several electronics documents of transportation condition, good’s origin, and expiration date. However, cutting-edge technology provides an opportunity to trace and monitor goods’ journey from the provider’s facility to the consumer.

Barriers to Digital Transformation in T&L Industry

•          Limited IT Capacity

As per the Digital Supply Chain Transformation research conducted by Nexus, more than 39% of transportation & logistics executives mention the nonexistence of the essential technical expertise and skills. This is one of the major barriers in transportation digitalization. To improve digital workflow adoption, near around 61% of industries are likely to trust on exterior partners.  It may include technology, digital transformation consulting, and outsourcing providers.

•          Struggle to Change

More than 25% of transportation & logistics industries do not have a significant digitalize strategy in place. However, near around 48% of companies involved in product distribution which highly rely on legacy software and conventional technology to interact with partners and control business workflows. The lack of partnership between business and technology development teams only worsen the issue.

•          Technological Constraints

The huge number of technology-based innovative obstacles may include failure in supply-chain connectivity. With real-time data, speed, economy, and time-driven decision making are significant to ensure an organization’s success and fulfilling consumer requirements which extend with on-time delivery. However, the innovative technologies which hold promises for the transportation & logistics segment majorly rotate around connectivity, location, security, cognitive computing, and Big Data. It is important to note that, around 74% of T&L executives now placing their companies in the center of the digital innovational scale.

Digital Transformation can connect the Freight with T&L Industry

The innovative artificial intelligence technology will improve the efficiency of the processes and enable every industry person to contribute and get benefit from the several supply-chain platforms. However, large corporate vehicles may enjoy less cost as well as time and experience improved efficiency. In addition, digital ledger technology will ensure secure and timely financial transfer and payments in the T&L industry. Likewise, digital wallets which are used to fuel the vehicle tanks on the road will automate with the biometric technology to ensure precise transactions.

Future of Digitalization in Transportation & Logistics Industry

Digital transformation is extending its innovative ways in the transportation and logistics industry. However, suppliers, consumers, and other people in the value-chain are hugely expecting faster, better, and more collaborated services. Thus, for transportation & logistics companies, seeking for areas in which operations to involve with digital abilities provides huge opportunities to get benefit from this modern trend. However, the areas may include supply chain logistics, warehouse automation, and many others.

To achieve greater efficiency, it is necessary to build a digital transformation outline and to collaborate with innovative transportation & logistics startups in a hybrid innovative business model.