Transport management and the AI revolution
We’ve heard people talk about reducing the number of freight vehicles on the roads many times before. However, the transport industry has yet to find an effective way of doing so. Collaboration has been touted as the answer by some – but the lack of results so far suggests that this is not the best way forward.
I believe there is a much more viable and realistic way working towards the magic target of a 40 percent vehicle reduction – the application of artificial intelligence.
As an industry, we can be slow to adopt new technology, and tend to rely on our people. However, transport management is a fragmented sector with an ever changing spectrum of complex variables. Although there are some good strategic analytical systems that use sophisticated algorithms to help run operations, ultimately most sites operate in isolation with decisions made by humans - a technical solution is often the last resort.
The problem has been exacerbated by 3PLs who have encouraged customers to pass their transport problems on to them, slowing down the adoption of technology as people address specific problems rather than taking an holistic approach and devising generic solutions.
However, some of the big users of transport such as car manufacturers are now seeking more control over their transport operations. For example, Honda has recently adopted technology that allows them to bring their whole operation back in-house using 3T’s software. As a result, Honda can now manage several carriers with significantly fewer people, saving money while increasing control and improving service levels.
The mobile revolution
Smartphone and tablet applications are proving real game changers but many carriers are unsure how to move forward with this technology. Our research with 500 carriers shows a concern that there are too many different systems and no common operating platform that smaller systems can link to. Their other concern is that customers often require the use of their specific applications meaning that a carrier working for several customers may have to use a variety of different applications for tracking, control and proof of delivery.
Ultimately, it’s all about vehicle utilisation. Companies become more effective by increasing vehicle utilisation on a 24-hour basis; automating as much of the transport process as possible, improving visibility and providing information that enables organisations to make sound business decisions.
The advancement of artificial intelligence and sophisticated algorithm techniques means that for the first time we have computer systems that can do a better job than a human. Although AI has been around for some time, few systems have been used for day to day planning. The new breed of systems can work with all the variables and respond instantly.
Smartphone applications represent a dilemma for companies who have invested significantly in systems that 18 months ago were the best solution. For example, the sophisticated black box systems used in vehicles to monitor everything from temperature to load information are now being superseded by smartphones. This means that the tracking solutions and control processes that companies invested £2m-£3m into three years ago are now being replaced by something costing £5 a month on a smartphone.
The best smartphone apps can track a shipment, not just the vehicle, offering real-time information. As a result, the culture is changing with companies like Honda demanding control of their operations by implementing this type of system, rather than handing it over to the big 3PLs.
You only have to look at companies like Amazon, eBay and PayPal who have a much better understanding of how to use technology to see how it can transform operations. The transport management industry must not be left behind.
Steve Twydell is CEO and founder of the 3T Group (www.3t-europe.com). He has 35 years of experience in European land based transport working in a range of large organisations including Sony, DSG, Currys, Ryder Plc, BT and Harrods.
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Cainiao Network Launches Customer-Centric Logistics
As the logistics division of the Alibaba Group, Cainiao Smart Logistics Network has decided to provide its Southeast Asian customers with unsurpassed service during its annual shopping festival. Based on customer feedback surveys, the company will expand its real-time customer service support and speed up delivery times. ‘By expanding and deepening our services, we aim to provide a stronger logistics infrastructure that can bolster the booming eCommerce sector, support merchants’ expansion into new markets and diversify retail options for consumers’, said Chris Fan, Head of Cross-Border, Singapore, Cainiao Network.
Who Is Cainiao?
According to TIME Magazine, Cainiao ‘is far from a typical logistics firm’. The company controls an open platform that allows it to collaborate with 3,000 logistics partners and 3 million couriers. This means that merchants can choose the least expensive and most efficient shipping options, based on Cainiao’s real-time logistics analytics. The company’s goal is to ship packages anywhere in the world in under 72 hours—and for less than US$3.00.
For countless small business owners around the world, from coffee-growers to textile-weavers, this could change everything. Usually, it costs about US$100 to ship a DHL envelope from Shanghai to London in five days. Cainiao aims to change that. Said its CEO Wan Lin: ‘The biggest barrier to globalisation is logistics’.
What’s Part of the Upgrade?
Throughout the Tmall festival, Cainiao’s logistics upgrade will be divided into four critical segments:
- Real-time customer service support. Cainiao has launched a direct WhatsApp channel for customers to receive logistics updates and ask questions.
- Expansion of air freight parcel size and weight limits. Packages can now be up to 30 kilograms or 1-metre x 1.6 meters to help ship large items such as furniture.
- Daily air and sea freight connections. Shipping frequency will almost double to seven times weekly to maintain resilience and efficiency.
- Compensation for lost or damaged packages. Customers will be reimbursed up to RMB 2,000 (US$311).
Where is the Company Headed?
From June 1st to June 20th, the finale of Tmall, Cainiao will ensure that its customers feel confident in the company’s ability to deliver their packages. Despite global shipping delays due to COVID, the show will go on. Said Fan: ‘This series of customer-centric logistics upgrades reaffirms our goal of pursuing value-added services to enhance customers’ shopping experience while mitigating challenges posed by external factors’.
Furthermore, Cainiao has recently expanded its Southeast Asian operations, achieving revenue growth of 68% year-over-year. In Malaysia, the logistics operation has partnered with BEST Inc. and Yunda; in Singapore, the company has partnered with Roadbull, Park & Parcel, and the Singapore Post. And if its recent measures help retain and grow its customer base, the company will be well-poised to lead the industry in resilient and customer-centric global logistics. ‘COVID-19 made everyone realise how important the logistics infrastructure backbone is’, said Wan. ‘And it gave us a peek at what Cainiao should look like in three years’.