In the afterglow of the International Week of Transport and Logistics, we’re taking a hard look into the four main industry directions of this year.
The sales outlet: strategic point in retail logistics
Seattle’s e-commerce giant, Amazon, continues with more momentum than ever to wow us with their innovations. Today, they are able to respond to their customers’ demand for instant gratification in a downright spectacular manner, thanks to two-hour delivery in certain cities, as well as drone drop-offs in other locations. And while these technology-driven upgrades apply constant pressure on the rest of the retail world, distributors can still count on one major advantage: their physical stores and sales outlets.
Retailers have a couple of different options to choose from when it comes to their sales outlets. Stores can be the main distribution point for content prepped in warehouses, or they can go with what is now known as the ship-from-store method, where orders are prepared directly from in-store stock. In any case, retailers are keenly focused on reducing both costs and delivery times. In this modern era, they have to be. That said, Amazon is all the more aware of this potential advantages that sales outlets maintain, and is therefore constantly pushing the boundaries of innovation. Will we soon be seeing Amazon stores scattered throughout the country? Who knows, but we wouldn’t put it past them.
The “platformization” of freight transport
After taking over the world of taxi services, Uber is now moving into the realm of freight transport with “Uber Freight.” In a market valued at 43 billion euros in France alone (300 billion in Europe), Uber is the newest participant in the platformization of freight transport. This newly emerging trend is only just the beginning of what we expect to see in the near future. With transportation and delivery companies such as Chronotruck, Convargo, Stuart (recently acquired by the French postal service, La Poste), and Delivery using the services of both professionals and consumers to participate in this trend, we have effectively seen the dawning of the co-delivery era. Now, the lines between freight transporters and taxis, or other consumer delivery sources, have been blurred, and this is only the beginning.
Logistics, the new epicenter of innovation
Urban logistics are now the main focal point when it comes to AI. Amazon drones were up until recently seen as the art of innovation, but have now been bypassed by newer, more advanced, and more spectacular endeavors. Retailers are looking for the best ways to anticipate which products are going to sell at which times in order to always have the right amount of stock on hand. This is a major differentiator when it comes to providing the most outstanding customer service. These days, we see new innovations popping up all over, especially those related to last-mile logistics. Companies are also looking for newer and faster ways to simplify and reduce transportation costs and routes, as well as other ways to reduce their carbon footprint. Recently, Otto, an Uber subsidiary, completed a 200km delivery using a self-driving truck. In another example, UPS delivered contents via a drone that was operated from a truck! Businesses are seeing the potential that AI innovations have in distribution, and while sometimes there can be a length of time between practice runs and launch, we are really seeing a huge acceleration in distribution innovation.
The risk in logistics: believing that all issues can be avoided
One of the main risks in logistics is the belief that all issues can be avoided, which is simply not possible. No one can predict a road accident, a sudden illness, or a punctured tire. Most of the time, the challenge lies in being as reactive as possible in the face of an issue, especially when you do not have the opportunity to rely on real-time information. Consumer impatience and the outsourcing of tasks have created a real need for information-sharing across the board, and software publishers have come to understand this. There are solutions available today that provide the entire supply chain, including the end client, total visibility of the channel from end to end. At the same time, we are still seeing information being shielded from the end client, and if we take the challenges of today into account, this is practically anachronistic!
In 2017, we will certainly be keeping an eye out for changes in the way sales outlets are used, the platformization—or what is now being called the “uberization” of freight transportation—as well as the use of artificial intelligence in industry logistics.