By Cate Hull
As the CEO of FreightExchange, a freight and logistics company, I pay close attention to industry trends in the freight and logistics industry. Naturally, I was interested to read a piece by PwC Poland predicting five forces that will transform our industry in 2019.
PWC predicts those forces will be:
- Shifts in International Trade
- Software-driven process changes
- Changes in markets’ domestic commerce
- Machine-driven process changes
Let me share a sampling of PwC’s thinking in these five areas:
Digitalisation is already happening, visible in business processes ranging from administration, through operations to contracting. Today digitalisation is no longer about simple Information & Communication Technologies or ERP in the work places, but about devising completely new business processes and models, including integrations across the value chain. It is more about leveraging the possibility of moving the point of purchase as well as important elements related to service provision into the digital environment.
Fifty-four percent of companies surveyed expected that digitalisation would increase their revenues (PwC Global Digital IQ Survey 2017).
Shifts in international trade
Shifts in international trade are already visible, e.g. in the rapidly growing numbers of train trips from China to the EU. Growing China-EU trade volumes (both directions), new investments along trade routes and land transport (acting as an alternative that’s faster than ocean freight and cheaper than air freight) will likely reshape international logistics in Eurasia. New trade routes will open, and existing ones will expand, as emerging economies become more connected to the global economy.
Software-driven process changes
Software-driven processes changes will grow dynamically over the next few years, generating even larger benefits for business, but at current stage these solutions still need to find their way into the mainstream. The evolution of base technologies, such as Artificial Intelligence, the Internet of Things, Big Data Analytics or Blockchain/DLTs and the pressure on business effectiveness they generate, will create a favorable environment for the development of such solutions.
Changes in markets’ domestic commerce
Substantial changes in markets’ domestic commerce will take place over the next few years, fueled by optimistic economic growth forecasts, development of eCommerce markets and the sharing economy and increasing M&A activity in the T&L segment. Solutions in this area will be driven by changing consumer expectations and an ageing society. All these changes will create a push for new services as well as different value-chain integrations between producers, including e-retailers and T&L companies.
Machine-driven process changes
Among other benefits, machine-driven core process changes can increase the efficiency of transport and logistics services. Solutions in this area require investment in new technologies and thoughtful implementation.
Machine-driven process changes will be enabled in the longer term by the development of base technologies (including advancements in electro-mobility) and changing regulations. They will also be shaped by an emerging focus on environmental sustainability.
With wider application of the following machine technology solutions, T&L companies can benefit from increasing work efficiency, the automation of core operations and possibilities to fix bottlenecks and design new services.
There is no doubt that the transport and logistics sector is undergoing an important transformation as new technological solutions come into everyday use, driven by market trends. At no point in recent history have we witnessed such a large degree of political, economic, social, technological, environmental and legal changes influencing this segment of the economy.
FreightExchange, a relative newcomer in the industry, is ready for the future. Our FreightDesk platform is making the world of freight and logistics easier to manage. We continue to improve the platform to meet the challenges that lie ahead.
Cate Hull is the CEO of FreightExchange, a freight and logistics company based in Sydney.