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New, agile entrants in the freight and logistics ecosystem are cherry-picking some of the most profitable aspects from the value chain, these new players are steadily fragmenting their portfolio with customer-centric business model.

Talking about the freight movers and carriers, their foray into the diaspora threatens to leave the office-holders with relatively low-margin activities like transport preparation and consolidation, all the while undermining their traditional end-to-end advantage, which is the buying power that comes with in-market transparency, while intensifying the rivalries between them. 

With the rise in logistics IT solutions. platform-based, online marketplaces now have the ability to connect shippers directly with both Logistics Service Providers and carriers. 

By justifying quick freight quotes, rate management and business intelligence to operate contracts and automate the quotation and sales process, models are thus constructing the ability of spot markets that threaten the freight forwarders’ position as the system’s main capacity brokers. 

Those shippers and freight movers who deal with less complex shipments are easily able to switch to the new, platform-based services. Meanwhile, the carriers are using the online marketplaces to conduct business directly with shippers. This gives them increased control over pricing and the chance to curt-off the freight forwarders’ mark-up—as well as the higher asset markup which leads to higher margins.

Digital disruptors have and will continue to penetrate the value chain with customer-centric services with the aim of consolidating logistics activities, the position holders or incumbents will have to raise their game. 

They need to leverage digital technologies in order to change pricing structures and drive the insurgents out of the market.

By digitizing the operational processes, incumbents can make sure they rise to the challenge posed by platform-based pricing models and remain competitive in the market. 

However, they also need to seize the value generating opportunities delivered by the application of new technologies.

Let’s go ahead and look at what drives the digital disruption in logistics and supply chain ecosystem. The below mentioned technologies offer incumbent players struggling to adjust to digital disruption the keys to a variety of new, customer-centric business models.

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Blockchain

Blockchain Technology

With highly secure data distribution and validation technology, industry players can improve shipment visibility and bring trust into the sale and movement of international cargo.

Augmented Reality

The use of Augmented reality is revolutionizing the packing, picking and commissioning processes in the warehouses and cross docking areas. With the application of this technology, handling costs can improve significantly.

Robotics

Transport Industry

The development in Robotics Process Automation has increased the potential level of automation to almost 100% in the transport planning and customer invoicing processes that leaves almost no activities to human beings anymore.

Autonomous Logistics

Technology has given birth to driverless ways of bringing goods from point A to point B. This has revolutionized the industry by taking the dependency off on the human factor. The data that is collected via sensors, RFIDs, barcode and remote devices from across the entire value chain has given a make or break capability.

Digital Platforms

The modern digital platforms are changing the revenue mix by enabling both physical and virtual product offerings which handle products from one point to another and provide the clients with insights along the entire supply chain.

Big Data Analytics

Big Data has penetrated almost every industry. With predictive and prescriptive analytics, it will provide a whole new set of information that enable third party logistics to optimally drive operational efficiencies with a higher utilization of assets.

SaaS Solutions

With the standardized and easy to deploy and parametrize applications on the rise, they are replacing monolithic, bespoke core applications that were being used for ages in Freight & Logistics.

Conclusion

The world of logistics and supply chain is vast. It has created endless opportunities and has immense space for new and modern technologies. With the advent of digital disruption, the industry has been catapulted into a solid future.

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Jane Brewer

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