What is digitization in the transportation industry?
Traditionally, many transportation industry sectors still rely on analog tools like spreadsheets, clipboards, and pen-and-paper checklists. In contrast, digital logistics rely on digital technologies like web-based systems, mobile applications, and integrations between systems to support the smooth flow of information.
Whenever there is a routine process that relies on pen and paper and repetitive manual effort, there’s an opportunity to make it digital and automated. That’s where digitization in transportation comes in.
Why digitization matters in the transportation industry
Today, according to Gartner, over two-thirds of all enterprises and carriers still use spreadsheets and paper or fragmented apps to manage the movement of goods. Our experience at M2X is that this percentage may be even higher in the primary industries such as livestock, dairy and bulk transportation.
Over the next few years, Gartner predicts that digitization will rapidly transform supply chains, starting with digitizing functions such as dispatch and scheduling to ultimately creating a digital ecosystem where information is shared transparently and seamlessly between shippers, carriers and customers.
Benefits of digital transformation in transportation
Achieve customer satisfaction
The growth of e-commerce has seen the level of customer expectations rise significantly. These developments have made shippers and carriers aware of the critical role that transport plays in the customer experience and of the need to use solutions dedicated to controlling the level of service.
Track and trace, expected delivery times and customer portals are all feature expectations driven by the consumer goods transportation industry, now affecting the agriculture sector.
Customers can receive event notifications to keep up-to-date with the status of product movement, and drivers can communicate with customers using prompts, e.g. “I’m on my way". Electronic dockets ensure events are time-stamped, and digital records are stored.
Control the complexity of your transportation and logistics operations
With a TMS, processes like bookings, payments, and scheduling can be received digitally, while drivers can obtain their day’s work on their mobile devices and account staff can automate payments – work is streamlined and paperless.
In the agricultural sector, truck weight restrictions are an important factor on routing. A TMS can help manage compliance, optimizing routes based on various factors like weight, driver hours or access restrictions.
Meet your profitability and emissions targets
Today, profitability and emissions targets are more present than ever before. The direct or indirect cost of transportation is, and will be, subject to context-dependent increases, due to rising energy prices, growing demands for control and the risk of poor quality. Transportation software, collaborative transportation platforms or TMS software can help anticipate and control these issues without affecting the productivity of the entire chain. On the contrary, they help optimize it!
Trends in the digital transformation of transportation
So, where do companies start? Here are some technological trends that are transforming global and domestic transportation operations
Transportation management systems
A TMS is the core software that companies use to manage their logistics and transport. They streamline transportation management processes, from bookings to payments, improving operational efficiency and reducing process duplication and errors. They provide companies with end-to-end visibility of transport flows, enabling faster, data-driven decisions and real-time communication of transport requirements to key stakeholders across the supply chain.
Cloud-based applications: connecting the transportation ecosystem
By centralizing and organizing transportation data in one place, all users see the same information in one place and in real-time - including drivers, logistics managers, dispatchers and plant staff.
Cloud-based applications play a key role in offering real-time updates on the condition and the quality of the product. Cloud-based TMS allows any member of the connected ecosystem to access and exchange data that helps them to quickly make decisions and resolve issues irrespective of their geographical presence. Owing to the accuracy offered by the integration of cloud-based applications, companies are focusing on migrating their business models from traditional manual methods to cloud-based applications.
Digital twins are one of the most exciting logistics technology trends to keep an eye on. In its simplest form, digital twins are a digital model or replica of the physical world.
The potential use cases for digital twins in logistics are vast. In the shipment sector, digital twins can be used to collect product and packaging data and use that information to identify potential weaknesses and recurring trends to improve future operations.
Having rich data about the physical world in your TMS provides the building blocks for great efficiency. For example, having accurate geocoded location information, with satellite imagery and metadata on access points, hazards and site contacts, reduces wasted time for drivers on pickups and deliveries.
Taking things to the next level, logistics hubs are able to create digital twins and use those to test out different scenarios and increase efficiency. Delivery networks can use the technology to provide real-time information that will improve delivery times and further aid schedulers in modelling future delivery scenarios.
Optimization and AI and ML to support decision making
There's no doubt that artificial intelligence (AI) and machine learning (ML) have played significant roles in transforming the transportation and logistics sector.
The use of AI and ML to identify every link within the supply chain is set to continue. When used for decision-making in the supply chain, AI reduces human error. AI in route planning optimizes the scheduling process making suggestions that can be overridden and highlighting potential inefficiencies and regulatory conflicts.
Likewise, demand prediction is much easier despite having to factor in multiple demand-influencing considerations and past experiences, as AI will compile all reliable prognoses quickly. Last mile logistics analysis and optimization, supplier selection, and workforce planning are processes powered by AI and ML. In short, AI and ML offer visible results and are useful tools in solving some of the most complex issues in logistics.
Many of the benefits of digitization in transportation will immediately impact your business in the areas of visibility, customer satisfaction and improved efficiencies across the supply chain. However, some of the richer and more complex benefits will take some time, particularly around the reporting and gathering of data to analyze and make more informed decisions.
Technology is changing rapidly, particularly in the transportation and supply chain space. It is essential to digitize your operations if you want to stay competitive in the transportation industry. The first and most crucial step in digitizing your supply chain is implementing a Transportation Management System that meets your current and future requirements.
M2X is a Transportation Management System that gives you access to unique feature offerings that are unavailable on traditional platforms. We help transportation companies of all sizes optimize their transport operations to improve efficiency and increase profits. Book your free platform demo today; Alternatively, you can contact our expert team; they'll be excited to speak to you about how you can digitize your transportation operations with M2X.