Three technologies that will change the logistics game
What technologies will have the biggest impact on logistics and supply chain management? Mobile computing, analytics software, and social media, say the experts.
James Cooke is a principal analyst with Nucleus Research in Boston, covering supply chain planning software. He was previously the editor of CSCMP?s Supply Chain Quarterly and a staff writer for DC Velocity.
What technologies will have the biggest impact on logistics and supply chain management in the coming year? A panel of information technology experts offered their thoughts on that question at eyefortransport's 13th annual Logistics CIO and Supply Chain Technology Forum in Chicago this past April. The experts agreed that three technologies in particular bear watching: mobile computing, analytics software, and social media.
Mobile computing devices, whether in the form of smart phones or tablet computers, could have a more far-reaching impact on logistics than anyone ever imagined, according to the panelists. The appeal of these devices lies largely in their flexibility. With a tablet or smart phone in hand, managers no longer need to return to their desks to obtain essential operating data; they can pull up the information wherever they are—whether in the warehouse or on the road. That's a powerful draw, noted Mark Ohlund, vice president of technology strategy for PLS Logistics Services. "We want [access to] information anytime we want it."
As for which of these devices—tablet or smart phone—is better suited to distribution operations, Ohlund said the jury's still out. But at the very least, he expects all trucking companies, even the smallest ones, to equip their drivers with smart phones—if not smart phones with global positioning systems (GPS)—in the future.
One panelist went so far as to suggest that the end of the personal computer era may be upon us. The computing power of cell phones will soon equal or exceed that of desktop computers, said Brené Baker, chief information officer of STI Delivers. Microsoft Windows 7 may be the last operating system IT managers have to roll out for corporate use, he said.
Another development that could change the logistics game is the emergence of analytics software, applications that sift through mountains of data to identify subtle patterns, anomalies, and associations that can provide new insight into operations. "As firms get better at collecting data, they use the data more for analysis," said Michael Watson, ILOG supply chain solutions leader at IBM. (ILOG is a software company owned by IBM.)
While there are many different types of analytics software, Watson said, two are particularly relevant to logistics operations: "prescriptive" and "predictive" analytics. Prescriptive analytics tell a manager what's going on in his supply chain now, Watson explained. The manager can then use that information to take any actions needed to keep the operation running smoothly.
Predictive analytics, on the other hand, help managers assess future risks—for example, a jump in oil prices—and weigh the pros and cons of alternative responses. "It will come up with a range of options," Watson said. "For example, you could see what your supply chain should look like with oil at $70 a barrel versus $150 a barrel."
As for social media, the panelists agreed that Facebook, Twitter, LinkedIn, and the like are changing the way information is exchanged in the logistics community. They noted, for example, that it's becoming common for companies to use social media to find and recruit younger supply chain professionals—those under the age of 30.
They also acknowledged that a lot of companies are still feeling their way around the new social media landscape. Steve Olender, vice president of information technology at Comprehensive Logistics, said his employer initially blocked employees' access to Twitter and Facebook. But as social networking started to take hold in the business world, it reversed its position.
Although it now allows employees to visit these sites during office hours, the company isn't totally sold on the value of social media, Olender said. It's still debating whether access to networking sites is more likely to enhance efficiency or drag down productivity. To help sort things out, he said, the company is keeping a close eye on usage and performance.
The German forklift vendor Kion Group plans to lay off an unspecified number of workers as part of an “efficiency program” it is launching to strengthen the company’s resilience and maintain headroom for future investments, the company said today.
The new structural measures are intended to optimize Kion’s efficiency, executives said in their fourth quarter earnings report.
“While internal programs to continuously improve product, production, and services costs were already up and running throughout 2024 and will continue, further structural measures will address a more efficient setup for Kion in Europe. This is expected to have an impact on personnel requirements subject to consultations with the respective employee representative bodies as required by local laws,” the report said.
“The efficiency program is addressing developments in the macroeconomic environment. European economies are struggling to gain momentum – this affects key customer industries in the Industrial Trucks & Services segment, where Chinese competitors have been improving their market position in the aftermaths of the recent pandemics,” Kion said.
The move comes as Kion reported that it finished its 2024 financial year with slightly improved revenue of $11.9 billion (over $11.8 billion in 2023), and profitability (measured as earnings before interest and taxes (EBIT)) that significantly increased to $951 million (over $820 million in 2023).
The company now plans to pay $249 to $269 million in financial year 2025 to implement the cost saving measures. Following that one-time charge, it expects to achieve sustainable cost savings of $145 million to $166 million per year, beginning in 2026.
“In order to maintain headroom for investments ensuring our future, to further strengthen our competitiveness and our resilience, we must manage our cost base. This requires structural and sustainable measures,” Christian Harm, CFO of Kion, said in a release.
By the numbers, fourth quarter shipment volume was down 4.7% compared to the prior quarter, while spending dropped 2.2%.
Geographically, fourth-quarter shipment volume was low across all regions. The Northeast had the smallest decline at 1.2% with the West just behind with a contraction of 2.1%. And the Southeast saw shipments drop 6.7%, the most of all regions, as hurricanes impacted freight activity.
“While this quarter’s Index revealed spending overall on truck freight continues to decline, we did see some signs that spending per truck is increasing,” said Bobby Holland, U.S. Bank director of freight business analytics. “Shipments falling more than spending – even with lower fuel surcharges – suggests tighter capacity.”
The U.S. Bank Freight Payment Index measures quantitative changes in freight shipments and spend activity based on data from transactions processed through U.S. Bank Freight Payment, which processes more than $43 billion in freight payments annually for shippers and carriers across the U.S.
“It’s clear there are both cyclical and structural challenges remaining as we look for a truck freight market reboot,” Bob Costello, senior vice president and chief economist at the American Trucking Associations (ATA) said in a release on the results. “For instance, factory output softness – which has a disproportionate impact on truck freight volumes – is currently weighing heavily on our industry.”
Volvo Autonomous Solutions will form a strategic partnership with autonomous driving technology and generative AI provider Waabi to jointly develop and deploy autonomous trucks, with testing scheduled to begin later this year.
The announcement came two weeks after autonomous truck developer Kodiak Robotics said it had become the first company in the industry to launch commercial driverless trucking operations. That milestone came as oil company Atlas Energy Solutions Inc. used two RoboTrucks—which are semi-trucks equipped with the Kodiak Driver self-driving system—to deliver 100 loads of fracking material on routes in the Permian Basin in West Texas and Eastern New Mexico.
Atlas now intends to scale up its RoboTruck deployment “considerably” over the course of 2025, with multiple RoboTruck deployments expected throughout the year. In support of that, Kodiak has established a 12-person office in Odessa, Texas, that is projected to grow to approximately 20 people by the end of Q1 2025.
Businesses dependent on ocean freight are facing shipping delays due to volatile conditions, as the global average trip for ocean shipments climbed to 68 days in the fourth quarter compared to 60 days for that same quarter a year ago, counting time elapsed from initial booking to clearing the gate at the final port, according to E2open.
Those extended transit times and booking delays are the ripple effects of ongoing turmoil at key ports that is being caused by geopolitical tensions, labor shortages, and port congestion, Dallas-based E2open said in its quarterly “Ocean Shipping Index” report.
The most significant contributor to the year-over-year (YoY) increase is actual transit time, alongside extraordinary volatility that has created a complex landscape for businesses dependent on ocean freight, the report found.
"Economic headwinds, geopolitical turbulence and uncertain trade routes are creating unprecedented disruptions within the ocean shipping industry. From continued Red Sea diversions to port congestion and labor unrest, businesses face a complex landscape of obstacles, all while grappling with possibility of new U.S. tariffs," Pawan Joshi, chief strategy officer (CSO) at e2open, said in a release. "We can expect these ongoing issues will be exacerbated by the Lunar New Year holiday, as businesses relying on Asian suppliers often rush to place orders, adding strain to their supply chains.”
Lunar New Year this year runs from January 29 to February 8, and often leads to supply chain disruptions as massive worker travel patterns across Asia leads to closed factories and reduced port capacity.
Women are significantly underrepresented in the global transport sector workforce, comprising only 12% of transportation and storage workers worldwide as they face hurdles such as unfavorable workplace policies and significant gender gaps in operational, technical and leadership roles, a study from the World Bank Group shows.
This underrepresentation limits diverse perspectives in service design and decision-making, negatively affects businesses and undermines economic growth, according to the report, “Addressing Barriers to Women’s Participation in Transport.” The paper—which covers global trends and provides in-depth analysis of the women’s role in the transport sector in Europe and Central Asia (ECA) and Middle East and North Africa (MENA)—was prepared jointly by the World Bank Group, the Asian Development Bank (ADB), the German Agency for International Cooperation (GIZ), the European Investment Bank (EIB), and the International Transport Forum (ITF).
The slim proportion of women in the sector comes at a cost, since increasing female participation and leadership can drive innovation, enhance team performance, and improve service delivery for diverse users, while boosting GDP and addressing critical labor shortages, researchers said.
To drive solutions, the researchers today unveiled the Women in Transport (WiT) Network, which is designed to bring together transport stakeholders dedicated to empowering women across all facets and levels of the transport sector, and to serve as a forum for networking, recruitment, information exchange, training, and mentorship opportunities for women.
Initially, the WiT network will cover only the Europe and Central Asia and the Middle East and North Africa regions, but it is expected to gradually expand into a global initiative.
“When transport services are inclusive, economies thrive. Yet, as this joint report and our work at the EIB reveal, few transport companies fully leverage policies to better attract, retain and promote women,” Laura Piovesan, the European Investment Bank (EIB)’s Director General of the Projects Directorate, said in a release. “The Women in Transport Network enables us to unite efforts and scale impactful solutions - benefiting women, employers, communities and the climate.”