A long and riveting list of forces is reshaping the Transport & Logistics industry. The e-commerce boom and changing user expectations have forced the industry to deliver efficient and reliable services using technological advances, mainly around digitization. Rising fuel costs are driving the transition to Electric Vehicles (EVs) to reinforce sustainability practices. An acute shortage in labor is encouraging the adoption of automation.
The industry has had to battle one global disruption after another, starting with the Covid pandemic, then the Suez Canal blockage, the Baltimore Key Bridge collapse, and the Ukraine-Russia war. Before the industry could recover, the recent Red Sea attacks resulted in global port congestion reaching an 18-month high (60 percent of ships in Asia were waiting at anchor in June). The recent conflict escalation in West Asia will likely compound the challenges.
Overall, there is excess capacity, volumes are flat, freight rates have gone down, and the industry’s future does not seem rosy. There are significant challenges to overcome, but there are also ample opportunities to build efficiency and resilience using technology.
Large businesses are responding to the change with alacrity. Amazon, for example, has been building its own freight business for the last 12 years with a large fleet, drivers, and technology to drive efficiency. As the largest shareholder in the American electric vehicle manufacturer and automotive technology company Rivian, Amazon has ordered 100,000 electric delivery vans to be deployed by 2030. Walmart also plans to replace its dedicated vehicle fleet with EVs by 2040. Ikea is doing likewise.
The increase in private fleets is sucking up business from traditional providers, triggering M&As aimed at buffering the impact of the trend as well as countering the larger uncertainties now pressuring the industry. In 2023 alone, we saw several M&As – Knight-Swift acquired U.S. Xpress, Schneider National acquired M&M Transport Services, Forward Air announced a merger with Omni Logistics, and TFI International acquired Daseke. The M&A activity signals that consolidation would be a significant strategy to build resilience. Most of these M&As help the parent acquire diverse capabilities and gain economies of scale.
What should the traditional industry—that does not have the luxury of M&As—do as markets and models are disrupted? Our recommendation to stay resilient in 2024-25 is to focus on the basics and stay on the right side of technology:
Integrate technology into operations: Everything is going digital, online, and real-time. Shippers want to get cost and shipping time estimates instantly. They want to submit declarations, packing lists, and so on online. They want to book trucks, flights, and containers in real time. The era of a flurry of communication followed by a quote is over.
Give customers new experiences and better options: Transport and logistics is a detail-oriented business with multiple partners and agencies that operate in tandem. End-to-end automation is necessary to efficiently move information and goods, reduce storage, handling, and transportation costs, and enable accurate returns management. Enforcement of safety and regulatory standards, and shipment security with on-time delivery also depend on automation.
The goal is to provide the partners visibility into critical factors such as capacity and bookings. Seamless collaboration between partners results in innovative service offerings, better options, and increased customer satisfaction.
3PL companies should sign up to leverage an industry platform: New-age logistics platforms that act as brokers between shippers and independent carriers play a pivotal role. These platforms are digital intermediaries that use their network to match shippers with carriers. They offer the convenience of negotiating rates, managing documentation, meeting compliance requirements, tracking shipments, and handling the logistics. They need access to fleet owners and the physical infrastructure they own to assure on time delivery and capacity flexibility requirements of their customers.
Walking the Talk
Trigent has worked with various transport and logistics providers for over 30 years. These clients range from specialists in handling and moving fine arts to 3PLs that provide services to Fortune 500 shippers. Working with clients that strive for excellence has steadily helped build the finest technical minds at Trigent to address industry challenges:
- The art of getting it right: Richard Wright Inc., which specializes in the safe and secure transportation of fine art for museum curators, private collectors, and artists, wanted to improve efficiency and reduce the risk of errors. Trigent digitized its paper-based processes (in just 12 weeks, along with integrated video capabilities for safety and transparency) to simplify complex approval processes.
We thus helped bring real-time visibility, tracking, and reporting into the movement of its high-value packages. Richard Wright reduced order payment cycles by 80 percent, achieved intelligent scheduling and route optimization, and increased serviced orders by 10 percent. [Learn more]
- Betting on the top dollar: A 3PL wanted to become more competitive by reducing the turnaround time used by its agents to offer quotations to clients. Trigent unified its data sources (transaction data, freight data, and data from internal systems, to name a few) and replaced the manual processes with a Machine Learning (ML) model for price prediction. The client disrupted its (own) business using an ML model with no precedent in the industry, consequently acquiring speed, agility, accuracy, and efficiency, leading to an acceptance rate of 98.3 percent and, at the same time, ensuring shippers were offered the best value. [Learn more]
- Enhancing CX with live information: A 70-year-old American logistics company was committed to providing excellent customer experiences by creating visibility, control, and user flexibility. Trigent accessed the company’s legacy data (via a text-only green screen console), safeguarding its earlier investment. Trigent then redesigned the customer interface and created a single view of consignment status. [Learn more]
- Taking flight with technology: A third-party logistics provider offered shippers a seamless air freight solution via a network of 15 partner airlines. The client had built a reputation for transparent door-to-door pricing and instant online quotes, driven by a network that let shippers select the most suitable carrier based on delivery speed, cost, and destination while enabling airlines to manage their cargo capacity efficiently.
However, with rapid growth, the client faced challenges in assessing capacity availability, submitting quotes for intermodal transport, and scheduling and managing airline interactions (each with its own system and communication protocols). Trigent created a unified platform that integrated multiple systems, thus reducing communication errors. Our team used analytics for more informed decision-making and leveraged automation to reduce the processing time by 25 percent. [Learn more]
The Trigent AXLR8 Labs for Transport & Logistics software development is at the heart of these successes. The tech accelerator enabled our clients to accelerate innovation and automate their operations. It has helped clients build versatile, flexible, future-ready custom solutions that are just right for their business. Our clients have discovered that the path to building resilience can be short—if they use the right technology.
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