This week, Freightos hosted over forty logistics and innovation executives for FreighTech 2018, a symposium dedicated to discussing challenges and opportunities in the industry. The catalyst was fairly simple – there are freight conferences and tech conferences, but few that really mesh both very well.
Gathering industry experts who categorically both practice and preach meant value delivered right out of the gate.
After attending dozens of conferences, it was thrilling to put together our own little gathering. Even more thrilling, was the sense that we’re all just getting started. There was also some startling consensus on some core ideas:
- Freight is complex and transformation won’t happen overnight.
- Customer experience is at the heart of everything.
- Data needs to be set free, allowing more collaboration.
It would take days to pour out everything that I picked up.
But I did want to share some quick insights picked up from some of the conversations and lectures. We’re also in the process of editing the presentation recordings; visit the bottom of this post to get added to the distribution list once it’s live.
Consumer behavior isn’t changing. It already has.
Freight used to start with a golf game or a phone call.
But B2B searches are increasingly starting with a Google search (and, maybe even, eventually, a voice search). Sven Gailus, Associate Partner from McKinsey, presented actual data from joint research with Google, showing that searches for professional freight search terms, like those related to ocean freight or freight forwarding, have increased 8%-14% every single year. Our internal data shows that may be a little conservative; but either way, it means doubling-down on closing and managing business in a browser, not in a nine-hole round.
We need to set standards and stick to them, no matter how hard.
In a conversation beginning at the tail-end of a lecture and concluding on a patio overlooking the Western Wall in Jerusalem’s Old City, I spoke to Celine Hourcade, IATA’s Head of Cargo Transformation. She was involved in the eTicket project that helped retire the last paper ticket used back in 2007. So why has it been so hard for eAWBs? For a couple of reasons but mostly because:
- Cargo is not the core revenue center of air carriers, passengers are
- Cargo can’t talk, so edge-cases cause serious complexities, especially if all the data isn’t tied to the individual shipment
- Cargo can’t complain about you on twitter, so there’s less of a drive to relentlessly optimize
- Cargo automation is limited to local implementation. And local implementation is limited by local readiness for transformation, which is rarely there, and local corruption, both of which are fatal blows to comprehensive automation
That’s not to say that carrier data standardization isn’t happening. It’s just taking a long time for a reason.
Customer management is only becoming more important.
The most fundamental system of record for logistics providers is going to shift to being a CRM, which may become the underlying operating system for businesses. As Amihai Zeltzer, the Head of Logistics and Industries at Salesforce pointed out, at the end of the day, a customer is interested in shipping or managing his goods. Which means that every interaction, every shipment update, and every financial transaction needs to be unified. Wondering why a company like Salesforce even has a role of an innovation lead in the logistics space? It’s because logistics has see the light of customer-centric behavior (and, for the record, there’s a reason Freightos has a Salesforce app).
Customer aggregation will define success.
Instant discovery and service on the internet has fundamentally changed which companies win (Amazon) and which lose (Toys “R” Us) by solving traditionally hard problems (say, finding the best freight quote) and creating new hard problems (how to keep shippers ecstatic). Michael Eisenberg, an investor in Freightos, WeWork, Wix.com, and others, laid out how aggregation theory creates a new high bar for customer-centric service. According to Michael, that’s why Orbitz just didn’t make it. As a conglomerate company created by carriers to compete with online OTAs like Priceline, it managed to mimic functionality with how really being customers focused. And that, in turn, explains why Priceline’s market cap is $88.8 billion while Orbitz was acquired for $1.6 billion in 2015.
Sure, that sounds pretty inane. But a repeat theme was how up to date every presentation needed to be, given how fast the industry is changing. If anything, outdated slides were gold for the industry, showing how fast new companies are managing to design and deploy new products (frequently by cooperating, not competing with startups). Besides, surprisingly enough, Blockchain, which had a near-consensus that it was a solution looking for a problem.
Containers might not change. But the robots are coming.
While TEUs and FEUs will be the standard unit for many, many years to come, there’s still a huge role for hardware to play. Asset-tracking is still an uncracked nut, with many players vying for the title. While this will require capital deployment to do so at scale, it’s clear that the industry is moving in that direction.
While our containers might get a little smarter, everything else will get much smarter, especially with regards to warehouse logistics. CommonSense, one startup that demoed, is systematically automating fulfillment, working down a laundry list of things that take human time at warehouses and building bespoke robots. One of the coolest ways they’ve increased efficiency? Building 3D grids of shelving (robots don’t get scared of hits).
Silos need to fall. Fast. Because otherwise visibility is always going to be very, very limited.
Everyone has data both internally and externally, but it’s not connected. Yoram Eshel, the former Head of Global Logistics at Teva Pharmaceuticals did a phenomenal job at transforming “Visibility” from a buzzword to reality. According to him, shippers really need three things:
- Cost visibility
- Performance visibility
- Quality visibility
Finally, data needs to drive solutions. It’s not enough to know that you’re stuck in traffic; you need to know how you’re going to make the meeting in time.
The crux of visibility is that given how complex supply chains are, there’s no one data source that is a single source of truth for everything. And that makes connecting data sources the most important challenge that logistics is facing today, as it has the potential to transform customer experience, transform planning, and transform efficiency.
Freight is cool again.
Honestly, the excitement in the room was contagious. There’s a ton of technology out there but the most heartening part was that the human-ware required to drive implementation was there in spaces. From Panalpina to Lufthansa, Heinz-Kraft to Maersk, the people in the room know that logistics has a bright and technological future ahead. Plus, the conference was awesome.