Four possible futures for the transport & Logistics industry
The global transportation and logistics facing “dramatic realignment” from technology, customer expectation, and collaborative operating models
A report has found that the global transportation & logistics industry is facing “dramatic realignment” as new digital technologies, changing customer expectations and collaborative operating models are reshaping the market place.
Shifting Patterns – the future of the logistics industry, a report compiled by PwC, has suggested that in actual fact – 90 percent of T&L companies see data and analytics will be the key drivers in redefining the industry over the next five years.
50 percent of companies actually acknowledge that the absence of a digital culture in their own organisation is the biggest challenge they face.
Whether the industry knows what it will look like in the next decade, it is undeniable that the industry is rife for investment. Since 2011 - $160m has been invested in digital logistics alone, with $150 of that investment private equity alone.
Coolin Desai, PwC UK partner and head of transport said: “Technology is changing the face of the industry and, for T&L companies wherever they might be, digital fitness and clear market focus will be essential prerequisites for success.
“It is important that companies remain alert to how new technologies, from data analytics to automation and platform solutions, are transforming the wider markets. In this market, early adopters may win early advantages.”
In the report, PwC identifies four possible futures for the logistics industry – all of which acknowledge the impact of technology:
1. Sharing the PI(e)
Incumbents increase efficiency through collaboration and new business models like sharing networks. Research and collaboration around the Physical Internet (PI) delivers shared standards for shipment sizes and greater modal and IT connectivity across the incumbents.
2. Start-up, shake-up
New entrants capture market share from incumbents by utilising new business models based on disruptive technologies like blockchain and data analytics, with only one or two replicating the technology that has created B2C giants like Amazon. Last-mile deliveries become fragmented, with incumbents collaborating with new entrants and crowd-delivery solutions.
3. Complex competition
The big retailers become new entrants, expanding existing logistics offering beyond their own needs - moving from customers to competitors –acquiring small logistic operators to utilise deep B2C knowledge, previous technology suppliers and customer-centricity, to optimise supply chains.
4. Scale matters
Incumbents streamline operations, utilising new technologies and financing technology disrupters with Venture Capital partners and technology - rather than logistics - talent. Major players complete synergistic mergers to enhance geographies and cross-modal coverage.