The logistics sector is one of the largest industries worldwide. The transformation of this massive industry carries many risks, but also many opportunities for those who switch to modern technologies early enough.
Following more than 500 expert interviews across the entire industry, we want to explore in this blog post why transparency is arguably the most important factor for the digital logistics of the future.
How digital is the logistics industry?
After the automotive and retail sectors, logistics is Germany's third-largest economic driver. With a turnover of approximately 268 billion euros last year, Germany holds a significant position in the international logistics market. This is primarily achieved through high-quality infrastructure and the use of logistics technologies.
However, among the approximately 60,000 predominantly medium-sized companies in Germany, digitalization has not yet been fully adopted everywhere. As a result, these "laggards" find their scope of action restricted, especially in crisis situations.
In the eyes of the general public, the logistics industry is mostly considered a laggard when it comes to digitalization, even though it is Germany's third-largest economic sector. And indeed, the insistence on old and, above all, manual process structures is holding back logistics providers all over the world.
Are logistics and digitalization mutually exclusive?
In the 1970s, freight forwarders began using computers for route calculation relatively early, and by the 80s, barcode scanners were being used for faster recording of shipment and SKU data. Logistics is therefore certainly a driver of digital innovation.
In the age of Industry 4.0, customer demands on logistics have risen rapidly: not only should delivery be faster—ideally on the same or next day—but more sophisticated production logistics with connected processes and interfaces are also required to keep customers happy and loyal to your brand in the long term. While Excel solutions were sufficient to achieve this a few decades ago, logistics today demands digital processes and greater transparency along the entire supply chain so that idle times and lost shipments will soon be a thing of the past.
Just how digital can work in a warehouse or a driver's cab really be?
Of course, warehouse work is about more than just moving pallets from A to B. Did you know, for example, that some warehouse and fulfillment facilities even use drones or cutting-edge camera technology to conduct inventory counts? There are also self-driving forklifts and intelligent sorting robots already in use that take the physically demanding work off the hands of warehouse staff. A job in warehouse logistics is therefore much more digitized than one might think at first glance. Digitalization is also playing a major role for employees in inland shipping, supply chain planning, and logistics risk analysis. Enormous amounts of data are collected to make supply chains visible and to allow for flexible adjustments. Wearables, tablets, and similar devices are making life easier for logistics professionals.
However, since digitalization has not yet reached every area of the supply chain, many warehouse employees still lack reliable access to essential data. Only when entire flows of goods are recorded and displayed digitally and transparently can data be used effectively for risk management and the optimization of warehouse processes. Consequently, the supply chain management of the future demands more accurate data collection, simple collaboration, and transparency.
3 reasons for more digital logistics
- Better capacity utilization in road freight transport:
Seasonal and, above all, short-term fluctuations present the transport and logistics industry with numerous challenges. For example, the Fraunhofer Working Group for Supply Chain Services (SCS) is working with the University of Regensburg on the KIVAS project, which generates AI-supported short-term forecasts. This is intended to significantly relieve the burden on German road freight transport and make it more sustainable. Reliable tracking and tracing are guarantees for smoother operations at loading and unloading points.
- Easier risk management:
By identifying risks in good time—with the help of real-time data—companies can determine order quantities or choose their suppliers early on, thereby avoiding supply bottlenecks. For instance, during the COVID-19 crisis, transport routes were adjusted at short notice despite closed internal European borders and tightened border controls, helping to bridge longer waiting times.
- Connecting the various stakeholders:
As logistics companies ship goods to their destinations faster and faster, production plants, freight forwarders, transport service providers, shipping lines, customs authorities, and others must also act more quickly. A common problem is that contracts and transport documents are still mostly circulated in printed form. This slows down transit times and keeps management costs for logistics services consistently high. Cloud-based collaboration connects all stakeholders on a single level, eliminating misunderstandings and missing documents.
Conclusion
B2B markets today face many threats, but also the demand for significant change. The intervals at which logistics requirements change are becoming shorter and shorter. Furthermore, the recent COVID-19 crisis has exacerbated existing supply chain issues and highlighted how well-functioning supply chains maintain the flow of the economy. The desire for greater transparency, data exchange, and cross-company processes is therefore growing steadily.
The topic of delivery coordination holds great potential for efficiency. The problems caused by a lack of information, poor communication, and inefficient processes are found across all industries and are more relevant than ever in the 21st century—the need for optimization is high. After all, there is an enormous amount of coordination involved in ensuring timely production supply and on-time delivery to customers.
In our view, there is enormous potential in the effective collaboration of all parties involved in operational logistics. This is based on the fact that every company has the same goal: to deliver the desired product to the end customer as quickly as possible—in the best possible quality. With TradeLink, you can bring your yard processes up to the latest digital standard today and invite all your partners to collaborate. Would you like to learn more about your options with TradeLink? Book your personal demo now and let one of our logistics experts guide you through the tool!
