Some of the key trends in freight digitisation and investments across the industry have been discussed in the article.
The year 2018 saw a wave of freight digitisation and investments across the industry. In 2019, while there may be a slight slowdown in trade due to political developments, we will see gains in efficiency via digital freight innovations and process automation at a faster pace than ever before. Some key trends to look out for in 2019 will be:
Global trade pressures: Global trade policy and political events will play a large part in how the international logistics market grows in 2019. Most analysts feel that the China-US trade war and Brexit will reduce the growth rate of international trade in 2019. However, these events could also increase opportunities for Indian exporters to service global markets.
Carriers and freight forwarders consolidation: On the carrier side, the year 2018 has seen Maersk, the largest shipping line, integrate its service offerings by purchasing a trucking tech company and by absorbing Damco (its freight forwarding arm). Also, we have seen major shipping line alliances and even consolidations of carriers (For example, ONE LINE - where three carriers merged), in order to stabilise prices and capacity on key routes in 2019. On the service provider and agent side, most multi-national freight forwarding companies are looking at making acquisitions in 2019 to increase their market share and improve their digital service offerings.
Transportation automation: There have been several successful pilots for delivering consumer packages via drones. A famous US supermarket chain has even started grocery deliveries via drones. Driver-less passenger vehicles are already a reality and will see heavy adoption in the next two to three years.
The freight market will see the next wave of automation in 2019. Volvo is already operating driverless trucks in Sweden and plans to start routes in China. Driverless trucking is especially beneficial because it eliminates labour costs, which can be as much as 50 per cent of operating expenses. Moreover, there is immense R&D being undertaken to design processes to make these automated trucks very safe and fuel efficient. We can expect many more operational trials in 2019 and large-scale implementation within three years once the policies are clearly laid out across different countries.
Smart warehousing: Today, with robotic package handling, sorting and automated forklifts and other warehouse equipment we are nearing the reality of complete mechanisation of smart warehouses. While tech companies such as Amazon led the way, now even regular manufacturing companies are starting to automate their warehouse operations due to cost reductions in warehouse robotics. In 2019, major manufacturers and distributors will continue on a strong trend towards complete warehouse automation, which will improve equipment life cycles (via preventive maintenance), accelerate product movement, optimise inventory management (through better predictive models), and also increase warehouse safety.
Digital freight management: Freight and logistics management is being disrupted at a rapid pace due to large investments by funds in new-age digital freight tech firms and simultaneous digital developments by carriers. Customers will adopt new technologies more rapidly as they better understand the efficiency and logistics cost savings available. For instance, CII (Confederation of Indian Industry) in a study mentioned that digitisation can reduce indirect logistics costs by 8 per cent.
In 2019, carriers will continue to invest in online price quotes, capacity and shipment management solutions. For instance, CMA CGM a major shipping line has started operating smart containers that transmit real-time data on container position and condition. Moreover, freight tech start-ups will continue to develop cutting-edge freight management platforms for supply chain managers in 2019, enabling them to manage their entire freight and logistics rate procurement, track shipments real-time and analyse logistics expenditure and performance online.
Furthermore, new technologies like blockchain will become more abundant, eventually resulting in paperless shipping documentation and giving all stakeholders visibility of their shipments from manufacturing to final delivery - hence eliminating the chance of fraud and mishandling.
About the author:
The article is authored by Samir Lambay, Co-Founder & CEO, FreightCrate Technologies.