I have been working with industry and academic leaders on a new certification program in the less-than-truckload (LTL) market to be offered by SMC3. We’re finding that new technologies are making a substantial impact on the people and processes that have been the mainstays of this nearly $50 billion market for more than 80 years.
Weaving together the historical processes for classification, rating, billing and operations with new Cloud-based capabilities is enlightening, but also presents new challenges in educating the next generation of logistics professionals. First, how we educate has changed from classrooms and on-the-job training to a rapid-fire, online multimedia experience designed to hold the attention of Generation Z. Beyond the new technologies of online education, we’ve found that the content is changing as newer methods supported by artificial intelligence (AI) and 24 hour connectivity are altering the way logistics is conducted.
While we often look at technologies in isolation, here are four pairs of disruptive innovations and what I believe could be their combined impact on logistics management.
Increasingly, logistics professionals are working in distributed locations, using mobile platforms to coordinate bidding, buying, ordering and customer service. As an example, several major mattress firms share a third-party customer service function run by two women both working from home and fielding calls on a digital phone system that automatically routes calls to each on their cell phones according to their personal availability. They successfully bid for the contract against several traditional call center companies.
Transportation management systems (TMS) have evolved from the traditional capabilities of load optimization on individual company servers to now incorporate AI on Cloud-based platforms that are event driven. From pre-planning to load planning, tendering and tracking, as well as audit and settlement, the TMS products are becoming more interactive. And more importantly, rates are becoming more dynamic and moving away from static rate tables.
The adoption of density-based rates addressed one variable, but left many other aspects of carrier costs as averages including schedule, handling and value. The answer is interactive rate making that dynamically looks at several of these factors for a given load at a given time and day. This is what the late Hank Mullen, a master of LTL pricing, called “dynarates.” The combination of AI and high-speed Internet will allow the joint optimization of a move by carrier and shipper TMS interaction.
The Internet of Things (IoT) is quickly becoming an integral part of supply chains and has become common in many homes and offices. In fact, we’re already using it to turn on lights, connect our devices to satellites broadcasting streaming media, and place restocking orders for groceries and other items. It provides us with the advantage of using systems already in place, such as our smartphones or supply chain execution platforms, to expand our capabilities for more responsive and manageable supply networks. Now there’s testing to integrate blockchains into this connectivity and visibility. Soon we’ll see secure, automated restocking orders triggered, tendered, tracked, received and paid for without human intervention.
My work on this program has shown me that buyers and sellers of freight are challenged to keep up with the technology that is rapidly changing the way we plan and execute all logistics—highway transportation in particular.