In the logistics and transportation industries, the progress towards digital transformation can often feel mired in the old adage of “one step forward, two steps back.”
While digitization efforts are making slow and steady progress with port authorities, terminal operators, shippers and motor carriers, there is one major remaining hurdle that many organizations still have to overcome: the lack of a culture that embraces transformation rather than relying on the status quo.
“We’ve found that companies with lagging digital maturity in the supply chain industry don’t perceive legacy technology and technical debt as the issue—their biggest roadblocks come back to cultural attitudes hindering digital transformation,” said Justin Bingham, co-founder and chief technology officer at consulting firm Janeiro Digital.
Similarly, in a recent report from PwC (Price Waterhouse Coopers) authors Andrew Tipping and Peter Kauschke state, “the potential (for digitization) is huge, but the industry has thus far been slow to seize it.” Indeed, less than a third (28 percent) of transportation and logistics companies responded they were operating at an “advanced level” of digitization today according to a global survey from PwC.
As Tipping and Kauschke note, “The next few years will be critical: companies that don’t start soon risk being left behind permanently.”
Part of this cultural resistance stems from the fact that many logistics and transportation companies simply don’t have historical foundations with digital technology; for decades their focus has been on managing vehicles and cargo, rather than on IT innovation and investment. Further, the processes of overseeing vehicle fleets and packages has traditionally been conducted through human capital (versus digital or automated solutions), causing many workers to view digitization with suspicion, as potential threats to their livelihoods.
Additionally, given their tight margins, these industries tend to be traditionally risk-adverse when it comes to digitization.
Despite the hesitancy by many organizations, it’s not all doom and gloom when it comes to digitization efforts across the container logistics supply chain. Many organizations are investing in digital solutions that provide reliable visibility, allowing them to differentiate their offerings, lower costs and grow revenues.
One organization that is embracing digitization is the Port of Oakland, which announced its Oakland Portal in May 2018, a digital collaboration platform that for the first time aggregates shipping information from every marine terminal in a harbor. The Portal provides a single point of entry to seaport operations, allowing beneficial cargo owners (BCOs), agents and freight haulers a single window through which to gain real-time insight on their cargo.
The Oakland Portal consolidates information from Oakland’s four active marine terminals including vessel schedules, up-to-date cargo status and live camera views of port and terminal thoroughfares. This enables supply chain operators to better manage trade flow by knowing with greater precision when to expect their cargo. Trucking companies can know exactly when and where to dispatch drivers for container pick-up and marine terminals can benefit from more efficient movement of cargo in and out of the Port.
“Investing in technology and infrastructure like our Oakland Portal plays a key role in boosting Oakland’s global trade status,” said Oakland Senior Maritime Projects Administrator Pia Franzese. “We’re the seventh-busiest container port in the country by cargo volume, and this platform provides insight and efficiencies to everyone involved in the supply chain, all with just a few simple clicks.”
The Port’s container volumes have grown nearly three percent during the first four months of 2018, and April 2018 was the Port’s best month ever for imports in its 90-year history.
The work in Oakland underscores many of the process improvements that those working in the global supply chain have been seeking for some time. A global survey from the Business Performance Innovation (BPI) Network of more than 200 executives found that the biggest challenges facing the industry included poor coordination between partners (57 percent), too little transparency and visibility (50 percent) and inefficiencies with the supply chain (37 percent).
There’s no doubt that as the logistics and transportation industries continue to embrace digitization, there will be some grumblings and growing pains. The stakes for organizations have been raised significantly, and that requires companies to adapt their cultures to stay competitive. The traditional way of doing business has fundamentally shifted.
As noted in the 2018 22nd Annual Third-Party Logistics (3PL) Study, “Supply chain and logistics executives are increasingly shifting from physical efficiency to data efficiency. Shippers and logistics providers are increasingly using data to drive both real-time and long-term decisions, and supply chain professionals have to interpret insights from the faintest of signals. In addition, supply chain leaders must understand all aspects of an end-to-end supply chain, and adapt as technology creates new opportunities.”
The logistics and transportation industries are at a critical tipping point in their life cycles and in order to reach their full potential, there must be a shift in favor of a digital culture. Industry stakeholders – from shippers, port and terminal operators, to motor carriers and truckers – all stand to benefit from this movement. Those who stand idly by may not only lose market share but their place in this digital revolution.
CEO, Advent Intermodal Solutions
Parvez Mansuri co-founded Advent Intermodal Solutions in 1995 and has held a variety of management positions including Chief Information Officer and Chief Executive Officer. Mr. Mansuri has more than 20 years of IT management and system development experience, and a deep wealth of knowledge in the intermodal industry. He has overseen and led a variety of projects, including the creation of the eModal Port Community System and its gate appointment systems for more than 40 marine terminal operators; the development of Chassis.com, a fully integrated solution for chassis management; and the creation of a 50 person professional services team dedicated to custom development and managed IT services.