Technology was a key topic on the first two days of the SMC3 Jump Start 21 conference, a virtual supply chain event focused on freight and transportation markets taking place this week. Conference speakers talked about the ways in which data, analysis, and automation are reshaping the industry and can help lay the groundwork for a recovery from the challenges of the past year.
“The business of transportation and logistics, in general, is about data,” Brad Jacobs, Chairman and CEO of transportation and logistics giant XPO Logistics, said in a question-and-answer interview opening the event on Monday. He emphasized the industry’s need to collect information about where things are, where they need to go, and the most efficient way to get them there. “This is about data collection, analysis of data, and then applying that information to route your assets in the most [effective] way.”
Jacobs pointed to pricing as one example of where technology will play a role in shaping the less-than-truckload (LTL) industry in the years ahead.
“I think the way freight is priced will be more automated, more done by algorithms,” he explained, adding that this will lead to greater efficiency and accuracy. “This will help the carriers in particular because we won’t be overpricing and losing business or underpricing and leaving money on the table. It will be just-right pricing.”
Other areas ripe for technology and automation include labor and workforce management and routing.
Author Alec Ross echoed some of those points in his opening session on day two of the conference, referring to data as the “raw material of today’s and tomorrow’s economy and businesses.” He pointed to the proliferation of sensors and connected devices throughout the supply chain as well as the use of robotics in a wide range of applications. He said transportation and logistics are driving a rapid increase in the number of connected devices globally, due to the need to track and monitor assets as they move through the supply chain. The number of connected devices globally is expected to rise to about 42 billion in 2022, from about 30 billion in 2020, according to Ross, author of the New York Times best-selling book The Industries of the Future and a partner at global venture capital firm Amplo.
“We will see this hugely in supply chains—particularly in our last-mile deliveries,” he said.
Automation will play a key role as well, especially as more and more work throughout the supply chain will be done by machines. Pointing to a global evolution in workforce automation, Ross said roughly 71% of all labor was done by humans and 29% by machine in 2018; that ratio is expected to change to 48% and 52%, respectively, by 2025, he said.
Ross and Jacobs also pointed to the strength of the underlying economy and the logistics industry’s v-shaped recovery since the pandemic.
“2021 could be a really good year. It’s going to require the industry to build on what we accomplished last year, which was to still function and function profitably in the worst possible environment,” Jacobs said, noting that the logistics sector “got the job done” at a time of unprecedented challenges and accelerated volume in 2020. He said the industry should be proud of that, build on it, and embrace technology, among other strategies, to succeed in 2021.
SMC3 JumpStart 21 runs from January 25 through January 27 online.