Given the complexity of global logistics, the question must be asked: is the logistics industry meeting the needs of the market? Additionally, as increasingly complex geopolitical situations arise, what must the future of logistics look like to encourage growth and resiliency?
Recent shocks to global supply chains have caused major disruptions for the industry. From Covid lockdowns to the Suez Canal blockage and the invasion of Ukraine, logistics professionals are scrambling to adapt.
A key to this adaptation lies in the vast amounts of data and information generated in and for the logistics industry. This data is often poorly communicated, unused, or otherwise overlooked. For this reason, large-scale cooperation — between companies, teams, and the industry as a whole — will prove essential as the industry continues to transform. This cooperation will allow data to be fully accessed, assessed, and acted upon in order to drive informed decision making.
The current state of logistics
Challenges in logistics and supply chain technology
The logistics industry is already filled with data collected by shippers, handlers, security professionals, brokers, and carriers. Additional information is fed in by vendors dealing in political risk, security or market research, and analysis. However, this information is mainly siloed and certainly unshared.
A CEO may receive a high-level report on global events, or a security manager might hear of a crime hotspot. A newspaper might also warn a reader of a worker strike. But the chances of these bits of information being captured, combined, and widely disseminated is small. As a result, the industry is left with multiple blind spots; huge problems go unnoticed until they are too big to avoid.
An example of this is the poor visibility of shipments throughout the logistics chain. Even if a shipper knows a container’s physical location, it is often difficult or impossible to find out who has custody. Containers are also often lost at sea, while trucks with large loads can seemingly disappear without a trace.
There are so many blind spots in logistics operations, it’s surprising so much gets where it is meant to go. The first step to improving the future of logistics is identifying these blind spots and understanding why they occur.
Creating a brighter path for the logistics industry
Understanding supply chain and logistics blind spots
Blind spots don’t stem from a lack of information, but rather, a lack of communication and visibility. The logistics industry as a whole possesses a huge and largely untapped resource of information. If shared and analyzed, this information could be used to find solutions to a variety of issues. In turn, the logistics industry could create greater efficiencies, improve security, reduce risks, and provide a more comprehensive service to customers.
Information sharing allows for better decisions to be made faster, making the industry nimbler and more resilient. But for this to happen, decision makers need accurate, real-time intelligence and better logistics visibility. They also require an understanding of the supply chain and the forces and events impacting it.
Fostering supply chain resiliency and digital transformation will require a high degree of collaboration throughout the industry. On one level, this means that a company must have the internal framework to support its employees and encourage collaboration. On another level, risk management will require business leaders to work in tandem to solve data shortages and address supply chain blind spots.
In other words, future supply chains will benefit from industry-wide cooperation between companies. This must include companies who view each other as competitors.
Cooperation’s role in the future of logistics
From the perspective of market share and bottom lines, competitors working together may sound impossible. However, collaboration and cooperation can also be viewed as opportunities. By working together, companies can better capitalize on the expansion of global trade, which hit $28.5 trillion in 2021. This number represents an increase of 50% from 2020, and the upward trend is likely to continue.
Greater political uncertainty and security challenges worldwide also necessitate cooperation. Sharing of data between companies could create a high-definition picture of every aspect of global supply chains. The logistics industry could then better identify, understand, and propose technological solutions to supply chain problems.
Incorporating better intelligence from the local to the strategic level could further help companies tailor their offerings to customer interests. Significantly, this intelligence could also help companies foresee and mitigate disruptive shocks. A holistic, data-driven approach would build resilience across the industry. This would provide clients with more comprehensive services than the spoke-and-wheel offerings of multiple companies.
What this industry collaboration could actually look like is difficult to say. Practically, it would probably need integration of IT systems. It might also involve something akin to a Bloomberg Terminal for the entire logistics industry. Here, shippers, carriers, and security and supply chain managers would compile and access the collective knowledge of the entire industry.
Aside from the software itself, two things would be needed to make such a terminal a reality: data and cooperation.
The future of logistics and supply chain management
Creating change today
Better usage of data and widespread cooperation among companies is key to the future of logistics. It will help businesses better understand and address bottlenecks and more quickly identify hotspots that might threaten truck shipments. It can also help businesses take advantage of additional capacities from other companies and avoid time consuming supply chain disruptions.
Although cooperation across the industry has not yet taken place, data sharing on a company-wide level is now a reality. Learn how Overhaul’s Command Center makes it easy to keep track of your shipments and share data across your entire team.