Estimated more than US$5 trillion of revenues at stake. In PwC recent Industry 4.0 study, the percentage of T&L companies that rated themselves as ‘advanced’ on digitisation was just 28%. T&L firms are in line with other industries in planning to invest 5% of their revenues per annum until 2020, but the next few years will be critical: companies that don’t start soon risk being left behind permanently.
Various new entrants, existing deep pockets companies joining the market and existing customers and suppliers are pushing the limits beyond conventional. Lack of digital culture, understanding of digitization need and training is the biggest challenge facing transportation and logistics companies.
Start-ups are new entrants and to date most of these are in ‘asset light’ parts of the value chain using new technologies; for example, virtual freight forwarders. These assetless or asset-light businesses exploit digital technology to offer interactive benchmarking of freight rates, or match shippers with available capacity
In Asia, Alibaba is setting up a JV (with port logistics operations and Store), Cainiao, to improve delivery services for its sellers. Amazon has plans to launch its own logistics offerings, a project, allegedly referred to as ‘Dragon Boat’
Fragmentation, missing accountability, a lack of consistency in collaboration, partial standardization, broken delivery, partial traceability and unorganised predictability. Technology can be leveraged to solve larger problem set, help in gain new traction in market and open new vistas of opportunities as innovation progresses.
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