DHL publishes trend report on Big Data
DHL, the world’s leading logistics provider, presented its Big Data in Logistics trend report today. Published by the innovation team at DHL Customer Solutions & Innovation, the report focuses on three areas of application for data analysis by logistics companies and other industries: operational efficiency, customer experience and new business models. The report includes concrete examples that could be applied in practice in each of these three areas.
“Big data” is the name given to the huge amounts of information that can be systematically collected from various sources and then analyzed and evaluated with the help of new technologies. The rapid increase in the quantity of available data is primarily the result of automatic generation. Examples include the recording of delivery data or prescriptions in the healthcare sector. Companies and other organizations hope that the evaluation of such data will allow them to recognize relevant trends at an early stage, giving them concrete competitive advantages.
“Big data and logistics fit together perfectly. Logistics companies manage a huge flow of goods and thereby create massive volumes of data. Specific data about millions of deliveries, including destination, size, weight and information about contents, is recorded every day. That data offers huge potential for new business models, among other things. That allows logistics companies to become search engines for users from every conceivable field,” explained Martin Wegner, Vice President Research & Development, DHL Customer Solutions & Innovation.
The aim of the trend report is to identify significant trends using scientific methods as a starting point for innovative, logistics-specific big data concepts in three areas: First, the aim in the field of operational efficiency is the real time optimization of package delivery routes taking into account the order of delivery, the traffic situation and the availability of the recipient. Second, the ability to predict delays in the supply chain, followed by the appropriate logistical service response, allows for an improved customer experience.
Finally, big data offers logistics providers ideas for new business models, for example the analysis of correlations between weather conditions, outbreaks of flu and the online purchases of consumers. Such analysis reveals that bad weather leads to increases in the volume of purchases made online. That, in turn, directly affects the volume of packages sent. In such cases, big data models can help companies optimize processes to offer improved customer service.
Big Data in Logistics is available for download at www.dhl.com/bigdata. The study was conducted as a part of the Logistics Trend Radar program. DHL’s central innovation department uses the Trend Radar to identify topics that could have a major impact on the future of the logistics industry.
Driver shortages: Why the industry needs to be worried
While driver shortages are a global problem, with a recent survey from the International Road Transport Union suggesting that driver shortages are expected to increase by 25% year-on-year across its 23 member countries, the issue has very much made itself felt for UK businesses in recent weeks.
A perfect storm of factors, which many within the industry have been wary of, and warning about, for months, have led to a situation wherein businesses are suddenly facing significant difficulties around transporting goods to shelves on time, as well as inflated operating costs for doing so.
What’s more, the public may also see price rises as a result due to demand outmatching supply for certain product lines, which in turn brings with it the risk of customer dissatisfaction and a hit to brand and stakeholder reputation. Given that this price inflation has been speculated to hit in October, when the extended grace period on Brexit customs checks comes to an end, the worst may be yet to come.
"Steps must be taken to make a career in the industry a more attractive proposition for younger drivers, which will require a joint effort from government, industry bodies, and the sector as a whole"
That said, we have already been hearing reports of service interruption due to lack of driver availability, meaning that volumes aren’t being transported, or delivered, to required schedules and lead times. A real-world example of this occurred on the weekend of 4-6 June with convenience retailer Nisa, with deliveries to Nisa outlets across the UK affected by driver shortages to its logistics provider DHL.
But where has this skills shortage stemmed from?
Supply is the primary issue. Specifically, the number of available EU drivers has decreased by up to 15,000 drivers due to Brexit alone, and this has been further exacerbated by drivers returning to their home country during the COVID-19 pandemic, as well as changes to foreign exchange rates making UK a less desirable place to live and work. This, alongside the recent need to manage IR35 tax changes, has also led to significant inflation in driver and transport costs.
COVID-19 complications have also meant that there have been no HGV driver tests over the past year, meaning the expected 6,000-7,000 new drivers over the past year have not appeared. With the return of the hospitality sector we understand that this is a significant challenge with, for instance, order delivery lead times being extended.
It is little surprise, therefore, that the Road Haulage Association (RHA) earlier this month became the latest in a long line of industry spokespeople to write to the government about the driver shortage for trucks. The letter echoed the view held by much of the industry, that the cause of this issue is both multi-faceted and, at least in some aspects, long-standing.
So, many in the industry are in agreement as to the driving factors behind this crisis. But what can be done?
Simply enough, outside of businesses completely reorganising their supply chain network, external support is needed. In the short-term, the government should consider providing the industry with financial aid, and this can also be supported more widely with legislative change.
Specifically, immigration policy could be updated to place drivers on the shortage occupations list, which would go some way towards easing the burden created by foreign drivers returning to their home countries. Looking elsewhere, government should also look for ways to increase the availability of HGV driver tests after the blockage created by the coronavirus lockdowns.
Looking more long-term, steps must be taken to make a career in the industry a more attractive proposition for younger drivers, which will require a joint effort from government, industry bodies, and the sector as a whole. As it stands, multiple sources suggest that the average age of truck drivers in the UK is 48, with only one in every hundred drivers under the age of 25. We must therefore do more to increase the talent pipeline coming into the industry if we are to offset more significant skills shortages further down the line.
On the back of a turbulent year for the supply chain industry, it has become increasingly clear that the long-foretold shortage of drivers is now having a tangible and, in places, crippling effect on supply chains.
Drivers, and the wider supply chain industry, have rightly been recognised for the seismic role they played in keeping the nation moving and fed over the past year under unprecedented strain. If this level of service is to continue, we must now see Government answer calls to provide the support the sector needs, and work hand-in-hand with the industry to find a solution. If we do not see concrete action to this effect soon, we are likely to be in for a turbulent few months.
Rob Wright is executive director at SCALA, a leading provider of management services for the supply chain and logistics sector