The Future of Motor Freight 2021

  • The Future of Motor Freight 2021

    The Future of Motor Freight 2021

    With nearly all goods consumed in the United States moved by truck at some point in the supply chain, America’s trucking industry is considered the “lifeblood” of the national economy. According to the American Trucking Associations (ATA), every year trucks move nearly 12 billion tons of freight throughout the United States, where roughly 929,000 for-hire, 800,000 private and 85,000 “other” interstate motor carriers transport about 72.5% of all of the nation’s freight (by weight).

    That’s a lot of freight to manage, move, monitor and track across the supply chain, where driver shortages, the pandemic, the e-commerce boom and ongoing capacity constraints have made it difficult for both carriers and shippers alike.

    “Demand for trucking capacity has gone through the roof,” says Bill Brooks, vice president of Capgemini’s North American Transportation Portfolio. “To get out in front of the situation over the next 18 months to 36 months, the industry will have to come up with some better and faster strategies.”

    Historically, those strategies would include investing in more equipment and putting more hands on deck. With the industry already nearly 61,000 drivers short going into the pandemic, and with the ATA predicting the dearth to nearly triple by 2028, the sector is turning to technology for help.

    Artificial intelligence (AI) allows companies to gather data quickly and use it for good decision-making; digital twins can be used to monitor fleets from a dashboard; and Internet of Things (IoT) sensors track container locations and conditions—all without the need for hands-on human intervention.

    Technology is also helping carriers identify and work around issues like the weather, natural disasters and unfavorable traffic conditions, all of which can add minutes, hours and days to delivery schedules if left unmonitored. “Even if you can’t predict the weather, you can see it coming and adjust accordingly,” says Brooks. “The better your planning is, the easier it is to avoid problems and delays while also maximizing limited resources like labor, drivers and trucks.”

    Managing in the “new abnormal”

    End-to-end supply chain visibility has also been the Holy Grail for logistics managers, but it became table stakes when the pandemic emerged, turning the world’s critical supply networks on end.

    When those challenges escalated in 2021—affecting everything from semiconductors to lumber to chicken wings—transportation providers were once again forced to rethink their strategies and come up with new ways to work in this “new abnormal.”

    According to Chris Caplice, executive director of the Massachusetts Institute of Technology’s Center for Transportation & Logistics (CTL), data science has proven itself as a great enabler during this disruptive period. Every shipment is a rich data source of communication pings, location, time, updates and visibility, he says, and the trucking industry as a whole has always been a rich source of key data points.

    What’s different now are the data analytics tools that companies can use to dig down into that information, pull out what they need and then act on it. This leads to better segmentation, adaptive design, flexibility and agility in transportation execution systems. “With the new tools and approaches that are out there,” says Caplice, who is also chief scientist at DAT Solutions, “we can now use a scalpel where we used to use a hammer.”

    Carriers are also using more technology to manage exceptions management and control risk, both of which are enabled by improved visibility. They’re also more readily sharing their visibility data with the goal of streamlining the end-to-end supply chain and keeping stakeholders informed.

    “Carriers have always known where their trucks were, but independent owner-operators were hesitant to have any kind of ‘Big Brother’ watching them,” Caplice points out. “That’s changed because they’ve seen the benefits of sharing that visibility. Now, I can’t name a freight brokerage of any size that doesn’t have an analytics department.”

    Creating a better vision

    The famous line uttered by politician Rahm Emanuel: “You never want a serious crisis to go to waste,” became a battle cry for many companies during the pandemic. Seeing the pandemic as an opportunity to make moves that they couldn’t have previously imagined or implemented, organizations used that time to assess their current strategies and come up with new approaches.

    The smartest companies didn’t just wait for the light at the end of the tunnel to appear, says Bart De Muynck, vice president of research at Gartner. “Instead, they found ways to ‘light up’ the tunnel and create a better vision,” he explains. “These companies will hopefully emerge from the tunnel in a much better position than they were in back in March 2020.”

    Looking further ahead to 2030, De Muynck envisions a time when over the road (OTR) freight incorporates more automated planning supported by intelligent optimization that can “take orders from any system” without the need for as much human intervention.

    Such systems will be supported by data, AI, machine learning (ML) and other advanced technologies. “Shippers will be able to make better, automated planning decisions,” De Muynck predicts, “while still having someone intervene as needed to handle 10% to 20% of the planning work—versus 100% of it.”

    Here come the AVs

    By 2030, shippers could also be using dispatch systems to automatically find capacity and then call on autonomous vehicles—depending on that technology’s level of maturity by 2030—to come and pick up their loads on an “as a service” basis.

    Rather than making a call to a carrier, the shipper may contract with a LSP provider, which may be working with a company like Waymo (formerly the Google self-driving car project), to deliver an autonomous truck to a warehouse or distribution center (DC) to pick up the cargo.

    “The truck shows up, a robot or human will load it, and then see if off to its destination,” De Muynck says. Once the delivery is made, the autonomous truck will be directed to its next pickup.

    Should this scenario become a reality at some point in the future, it will not only help ease the driver shortage, but it will also allow trucks to operate continually and efficiently across the United States. In some cases, those trucks may meet up with an “urban delivery robot” that, in turn, will handle the final-mile delivery.

    If this sounds farfetched in the current transportation environment, think again. “This obviously still sounds a bit far off, but we’re starting to automate the various components in pieces,” De Muynck explains. “We may still be waiting for large-scale regulations for autonomous vehicles, for example, but this is the future we’re looking at for 2030 and beyond.”

    Right now, he says much capital is being invested in the transportation technology space, where companies are receiving outside investment, merging with other organizations and going public. This trend will likely continue as an increasingly bright spotlight is being placed on all things related to supply chain, logistics and transportation.

    “We’ll really have a chance to transform transportation and the transportation industry as a whole over the next 10 years,” De Muynck adds, “and make more advancements than we’ve seen even in the last 50 years.”

    What’s ahead?

    As he looks ahead and ponders the future of freight management, De Muynck is quick to point out that technology is an enabler and not a driver of change.

    The key drivers are individual business requirements and any limitations around just how much change one company can actually absorb. In other words, even though the technology is within reach, more advanced, more affordable and now offers a shorter time-to-value, it’s still up to the individual organizations to invest in it, adopt it and use it.

    Caplice also reminds companies that the human aspect of transportation management won’t go away as more technology is infused into the process. Companies will continue to use advanced software and tools to manage their increasingly-complex transportation requirements, human workers will intervene as needed and will also be freed up to focus on more important projects.

    “Transportation is a relationship business, so there’s always going to be a logistics or transportation manager building relationships with the carriers,” says Caplice, “plus a group of data scientists and analysts who manage the analytics and data.” Based on this, he sees two distinct career paths emerging in transportation.

    “Similar to procurement—where operations and procurement finance professionals work together—the same thing will take place in transportation,” Caplice predicts. “Someone will handle the transportation execution while on the analytical side, another individual will be providing support and making that human employee’s job easier.”

    by Bridget McCrea at Logistics Management

    Leave a comment

    Required fields are marked *

International Tracking