How digitalisation is disrupting logistics

Like an unstoppable force, digital transformation in the world of business has seemingly gained greater momentum largely due to disruptions triggered by the ongoing pandemic. For the logistics industry, digitalisation has become the buzzword as global supply chains shift and customers redesign and adapt their operating models to one marked by resilience, agility and sustainability.

E-commerce efficiencies
The rise of the “expectation economy” stemmed from studies showing that consumers, in general, expect their e-commerce orders to be delivered within a matter of hours, complete with tracking information at every step of their parcel’s journey. This has spurred e-commerce giants such as Amazon and Alibaba to build their own logistics digital platforms and footprint in an attempt to handle the surge in volumes, as retail commerce moves online.

Last-mile delivery, a crucial component of e-commerce fulfilment, can be made more efficient with the deployment of artificial intelligence and automation. For example, AI can optimise delivery and route management, thus speeding up deliveries, improving efficiency and reducing carbon emissions. The Covid-19 pandemic has also seen the rise of parcel delivery by drones in some countries, which is an efficient and cost-effective way to maintain social distancing while ensuring deliveries are carried out on time.

Greener logistics
As e-commerce continues on its growth trajectory, the pressure for more frequent last-mile B2C deliveries with smaller shipments comprising just one or two items is resulting in higher carbon emissions and more packaging generated. This poses challenges as organisations seek to implement sustainable practices to fight climate change, and this is where technology can play a critical role to balance profits with sustainability.

Best practices for sustainable business in logistics such as better routing, truck loading, driver training and advanced technologies dramatically improve fuel efficiency and reduce carbon emissions, resulting in cost savings. DHL for instance uses data to consolidate shipments, ensuring that each vehicle has optimised fill rates, thereby reducing the number of vehicles needed. Measures such as E-AWB (electronic Air Waybill) have done away with the need for paper documentation during air cargo handling, reducing carbon emissions, and saving time and money.

With the Internet of Things (IoT), goods management and warehouse management is made easier and more energy-efficient. Sensors in warehouses can set optimal temperature for goods storage, and control doors to manage energy consumption. It is also encouraging to see that many companies are incorporating sustainable building measures when designing sites, such as installing solar panels and using LED lightings to reduce overall energy consumption.

Changing work landscape
Digitalisation enables greater predictability, visibility and agility in uncertain times, especially in 2020 when countries scramble to close down their borders in a bid to contain the spread of Covid-19. Beyond having to deal with securing the needed capacity for cargo, the logistics sector also had to ensure that business demands are met without compromising on the quality of service and the well-being of employees. Most logistics companies have taken the initiative to reduce their onsite workforce by keeping a small percentage of employees working in the ‘front-line’. It is against this backdrop that digitalisation tools that can facilitate remote collaboration and communications have become life-saving and essential.

Equally, the collaboration between humans and robots is expected to be the new norm in logistics. Automation in the warehouses has accelerated, with remote-controlled technology deployed in situations where people cannot be physically present. In fulfillment centres and warehouses, we see more robots employed to boost efficiency and reduce the risk of injuries because they can work around the clock, at a predictable and uniform pace. Warehouse aisles are also seeing collaborative robots or “cobots” working alongside humans, carrying loads, picking and packing shipments as and when orders come in.

Greater responsiveness to customer needs
Digitalisation has tremendous potential to improve operations for shippers and freight forwarders; more so during unpredictable times. It can simplify daily business, giving logistics customers more control over shipments.

One-stop customer portals ensure that customers have full visibility, control and access to all relevant information. These digital platforms do away with the need to print documents. Completely transparent management of freight rates, offers, transport modes, carbon emissions, and all other relevant shipment data is readily available with just a few clicks and can be downloaded in detailed analyses and reports.

Digital freight marketplaces such as Saloodo, a subsidiary of Deutsche Post DHL Group (DPDHL), are at the forefront of the movement to ‘Uberise’ trucking. At the click of a button, shippers can search for road freight carriers depending on the load and destination, while carriers can find cargo shipment requests on specific routes which they are serving. With this, carriers can manage their fleets better and optimise the capacity of their full truckload (FTL) shipments, while shippers can find the most price-competitive option.

As we prepare to enter a new decade, we can expect even more transformational changes causing seismic shifts in the supply chain industry. The coronavirus pandemic has served to accelerate many of these changes. For logistics professionals, being able to adapt to these changes and embracing them will be key to staying resilient, even under challenging circumstances.

Amadou Diallo is the CEO of DHL Global Forwarding