Logistics Technology

Five Technology Trends That Will Change Global Freight

A whopping $13.92 billion dollars of US venture capital was invested in the first quarter of 2016. And with daily headlines on new Ubers for X, new tech acquisitions, and the continuing crawl of technology into our everyday life, we’re focussing on five emerging tech trends that have the potential to reshape logistics.

1. Better last mile shipping

Persistent growth in ecommerce, door delivery and expectations for “free” shipping have many in the industry talking up the potential for drones to change the industry. However recent Freightos research found that only 32% of logistics professionals believe that drones will change the industry in the next five years (with nascent signs that drones are taking on some niche shipping tasks.

But it’s not just drones.

Elon Musk’s concept of the hyperloop promises 700 mph transportation between major US cities. Musk already has experience with transportation innovation; reinventing the electric car with Tesla, and creating reusable rockets at SpaceX.

Crowdsourced last-mile delivery is also on the rise. Roadie has already garnered 250K downloads and 20,000 drivers in the US, while Nimber is making headway in the European market. And, of course, Amazon looms with Amazon Flex.

2. The Full-Stack Powerhouses

Speaking of Amazon, the titan has never been as imposing, to so many companies, in so many sectors, as they are currently. Recent product expansion includes electronicsapparelfood, detergent and diapers.  They even recently filed as a 3PL, in the process labelling their current  logistics suppliers as competition. Clearly a formidable foe, they are not alone. Other tech giants, like Alibaba and Facebook, are also expanding into new markets.

Giants like these are planning to extend their control further around the customer lifecycle, and further along the supply chain, so incumbents in just about every vertical should be wary.

3. Here come the Millennials

By 2020, over 50% of the global workforce will be Millennials – employees born between 1980 and 2000. By their early teens, most of these employees in advanced economies were online. A Millenial born in 1984 was just 10 when Amazon was founded, and 18 when Facebook was founded. When they joined the workforce, 50% of US mobile users had already migrated to smartphones. Netflix is their movie theater, and the internet is their mall.

And they’re expecting similar technology at work. Increasingly they are running procurement and logistics departments. This explains why, according to logistics providers, 83% of their clients want real-time tracking and 70%  want online booking – Millenials grew up with exposure to ecommerce courier shipping, which provided exactly that. New workers with new expectations, are searching for new technology and new platforms.


4. VC ❤ Freight Startups

Logistics startups have been all over the news. More capital and more enterprise tech have powered a rapid increase in technology that promises to change day-to-day business for logistics professionals. Since tech logistics sales cycles can be lengthy, VC capital is a critical enabler. Funding in 2015 grew by 125%, hitting $1.5 billion dollars.

Wary of too much hype and not enough true success, some prominent tech analysts, like Bill Gurley, are now predicting a potential slump in tech investments, mostly as the result of startups burning capital without creating sustainable returns, and investors or employees attempting to capitalize on high valuations of companies without the necessary liquidity. While this is only one side of the coin (funding in Q1 2016 has remained stable), it is still cause for concern.

5. Moving data better

Despite dropping profitability on core shipping operations, 86% of logistics professionals are still optimistic, confident in new technology as the best way to succeed down the line. In a decade’s time, freight will likely still be moved in containers and boxes on airplanes and ships. The real potential for change lies in better movement of the data that moves the freight, a sentiment echoed by DHL Supply Chain’s Head of Innovation.

“Big Data” is big news in logistics. With it, realtime data from scanners, tracking systems, and other new technology can be harnessed to improve productivity, safety, customer satisfaction, profits; in short revolutionize the way companies work. So, expect even more startups who’s focus is on supply chain process and data integration, and expect many more logistics providers, large and small, to be rolling out the new data technologies.

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