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Paul Beavers is the chief technology officer at PCS Software, an artificial-intelligence–driven transportation management platform provider for mid-to-large sized enterprise shippers, carriers, and brokers in the United States and Canada. An expert in cloud computing, computer systems architecture, AI, and machine learning innovation, Beavers has held C-level positions in technology, R&D, and product management capacities for large enterprises such as Amoco and BMC. In his current capacity leading the design and development of the PCS Software platform, Beavers works to advance supply chain digitization, process automation, and integrated data systems architecture development.
David Maloney, Editorial Director, DC Velocity 00:00
Are touchless transactions here to stay? Pallets seem to be in short supply. And plan for tight market conditions to be with us for a while.
Pull up a chair and join us as the editors of DC Velocity discuss these stories, as well as news and supply chain trends, on this week's Logistics Matters podcast. Hi, I'm Dave Maloney. I'm the editorial director at DC Velocity. Welcome.
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As usual, our DC Velocity senior editors Ben Ames and Victoria Kickham will be along to provide their insight into the top stories of this week. But to begin today, the need for social distancing and less contact during Covid-19 has accelerated the growth of contactless transactions and the technologies that drive them. As life begins to return to normal, are those touchless transactions here to stay? To address that question and more, we welcome Paul Beavers, the Chief Technology Officer at PCS Software, an AI-driven transportation management platform provider. Welcome, Paul, to Logistics Matters. Good to have you with us.
Paul Beavers, Chief Technology Officer, PCS Software 01:36
Thanks, Dave. I'm happy to be here. Appreciate the welcome and happy to be here.
David Maloney, Editorial Director, DC Velocity 01:42
Paul, contactless transactions have been around for quite a while now, but as I said in the opening of the segment, the pandemic has pushed them to new heights of adoption. What was the actual impact this past year on these technologies?
Paul Beavers, Chief Technology Officer, PCS Software 01:55
You know, the way that I think about it is the technology, as you said had been around for years. Obviously, the desire to have less touch and less contact between two human parties when they're executing the logistics process has accelerated the need to be contactless. But quite honestly, it's an acceleration that is necessary. And it's necessary not just because it's more sanitary, but also, when you have a contactless process, you're eliminating paper. And when you eliminate that paper, you eliminate the need to enter data multiple times, right? So, if you can imagine somebody fills out a form, they fill out a bill of lading form, it's hand-created or typed into a TMS and then it's printed, and then later on, maybe, it's entered into a system by a data-entry clerk. All of that workflow, when you're contactless, is eliminated, right? So that workflow goes away, because now everything is done electronically. So, while it's accelerated due to Covid-19 and the need to be sanitary, it's extremely necessary in terms of getting the data to be accurate. So, while Covid-19 has been a terrible pandemic, one of the positives that would come out of all this is some of the technology that's accelerated, and definitely in the area of contactless.
David Maloney, Editorial Director, DC Velocity 03:20
Yeah, so also it's streamlining the process as well. So what sort of different touchless transactions were initiated because of the pandemic?
Paul Beavers, Chief Technology Officer, PCS Software 03:30
You know, in our business—which we basically provide transportation, the AI-driven transportation management platform—in our business, the key changes are really in a couple of areas. It's really anytime that there's a paper document, but the two main ones are a bill of lading, right? And as you know, the bill of lading is the document that, when a driver picks up the load from a carrier or from a shipper and has to deliver that load somewhere else, they basically have in their possession, a physical document. So that bill of lading is one area. The second is another document type known as proof of delivery, right? So the need to have a document that's a proof of delivery, having that as a digitized document that doesn't have to be—change human hands, is the other area. So, those would be the two primary. We had already, even ahead of the pandemic, invoicing and some of the other historically paper documents have already been digitized, but the ones that have enjoyed the greatest change are bills of lading and proofs of delivery.
David Maloney, Editorial Director, DC Velocity 04:34
Yup. I know during the pandemic, too, a lot of drivers were—truck drivers—were able just to go directly to their cabs, didn't even have to stop in the dispatch office or anywhere else, that a lot of that was just waiting for them when they got into their cab, in electronic form. So, which of these that you mentioned were accelerated and which were just going to be eventual, that there would be just greater need for adoption of those technologies?
Paul Beavers, Chief Technology Officer, PCS Software 04:57
Well, I think you mentioned that the drivers no longer have to leave their vehicle—that's actually the bill of lading. And, really, the drivers having to leave a vehicle, go stand in a line outside of an office or a dog house that might be set up at a shipper dog house, if you're on an oil-well site, and having to wait through a line of other drivers—right?—and all that process, the BOL part has streamlined that probably the most, in my opinion. And I I believe that, if you think about the benefits of having it, having the BOL handled electronically, obviously data accuracy, as we talked about, but the other one, which you just now alluded to, is efficiency, because when that driver has to get out of the vehicle, and stop, every person that he interacts with, probably adds a few more minutes to that stop, and by the time he's dropped the load and moved on, he could have had 45 minutes of savings if he never had to leave the vehicle. And so that's probably where we're seeing the biggest savings.
David Maloney, Editorial Director, DC Velocity 06:05
And some of those benefits that you're talking about, is that why you think that those touchless transactions are here to stay?
Paul Beavers, Chief Technology Officer, PCS Software 06:11
Absolutely, yeah, I think that the pandemic accelerated it, but it's much like the changes to business where, with remote employees, a lot of those are here to stay. It's absolutely true for the logistics process and having individuals not have to get out of their truck and all that. When the pandemic's over, I don't believe that they're gonna say, "Hey, I want to go back to a paper process"—"they" being shippers, carriers, or anybody involved. I think they're going to, the whole market and the whole industry is going to adopt this electronic approach.
David Maloney, Editorial Director, DC Velocity 06:47
Yeah, many companies in the past have liked the physical paper. It's it's always there, it's able to be referenced. And also, there are security concerns. So how do you alleviate some of those concerns with electronic documentation?
Paul Beavers, Chief Technology Officer, PCS Software 07:04
You know, I think there's sort of two things that have to happen to alleviate those concerns around security. One, the industry has to mature, right? And, "the industry matures," what I mean is, get more and more comfortable with electronic transactions. You know, I've been around for a long time and I remember when ATMs first came out. So, now we're talking the early 80s, when at automatic teller machines were out, and everybody was nervous, right? And, but the use of them has evolved now where it is completely second nature. And that is a contactless—well, it's not completely contactless, because you touch the ATM—but it is a paper, very much of paperless process. And so that, if you look at how ubiquitous that is now across the entire world, all over the world, and every country, ATMs are used to get money from wherever, the same thing will happen for paper documents like BOLs, and the same thing will happen for the other types of contactless business processes that we're talking about here. It will happen. And so the industry, it takes time for the industry to get comfortable with that process. This is where I think the pandemic has done the most to accelerate it, is people are kind of being forced, people and businesses, are kind of being forced to embrace the new technology.
David Maloney, Editorial Director, DC Velocity 08:27
Sure, and like a lot of things, once you embrace it, then you realize the benefits from it. Are some of those benefits also the ability to be able to generate reports and to do auditing on a lot of those transactions?
Paul Beavers, Chief Technology Officer, PCS Software 08:39
Absolutely. And to me, that's the big benefit. So, you have a human benefit about not touching paper and not having to handle and deal with paper and not having to enter the data, but the reality is, humans make mistakes, and so the real advantage is, as data is input, it becomes more accurate. And as data that is in the system is more accurate, obviously, it's something you can use for more insight and reporting into the logistics process itself, because it's more usable, right? The data is something that is representative of the business. And so, if you think, as the businesses evolve, that data is going to become more and more clean, and as the data becomes clean and valid, then it will be used for critical business processes. It already is today. It's just a multiple human step, multiple set of steps that humans have to take to make sure that the data is valid.
David Maloney, Editorial Director, DC Velocity 09:35
Sure. Are there other advantages to paperless and touchless transactions that we haven't discussed yet?
Paul Beavers, Chief Technology Officer, PCS Software 09:41
You know, to me, obviously, if we kind of summarize the ones we have discussed, the time savings. Obviously the sanitary approach that we talked about, and then maybe the advantage that we haven't touched on, is the timeliness of the data, right? So, If you think about a BOL, a bill of lading that is in the hands of a driver, it is just that. If it's a paper copy, it's in the hands of the driver. You can't report on it or anything until it gets to its destination and somebody enters it, the details, or the status of it into a system. When it's all electronic, even when that data is en route, it's accessible. And so I would say the one that we didn't talk about yet is the timeliness of the data. So the data is quicker and more readily available.
David Maloney, Editorial Director, DC Velocity 10:32
Yeah, all good reasons why we think those transactions are here to stay.
Paul Beavers, Chief Technology Officer, PCS Software 10:36
David Maloney, Editorial Director, DC Velocity 10:38
Thank you, Paul. We've been talking with Paul Beavers, the chief technology officer at PSC Software. Thanks for being with us today.
Paul Beavers, Chief Technology Officer, PCS Software 10:46
Yep, thanks. Bye.
David Maloney, Editorial Director, DC Velocity 10:48
Now, let's take a look at some of the other supply chain news from the week. Ben, the surging consumer spending and a recovering economy are spiking demand in many supply chains, and you've reported this week on another shortage, this one on a very important commodity for supply chain operations. Can you tell us what's in short supply?
Ben Ames, Senior News Editor, DC Velocity 11:06
That's exactly right, Dave. We've done a lot of reporting recently about a shortage of shipping containers—the big, of course, 20-foot, 40-foot metal boxes on the container ships—since big swings and market supply and demand during the pandemic, and now the recovery, have led to port congestion and overstuffed warehouses, so those containers aren't circulating around the world like they used to. But this week, we learned about another, a comparable effect of those stressed supply chains, and that's a shortage of pallets—just a simple, wooden, sometimes plastic shipping pallet. That's according to Tom Moore. He's a partner at Transportation / Warehouse Optimization, which is a supply chain solution consulting service. And Moore says that one of the primary causes of the growing pellet shortage is something called the bullwhip effect. That's a market condition where modest fluctuations at the retail or the user level get magnified into large swings of inventory up at the wholesale or the manufacturing level. And at the same time, another cause, you might have read in the newspaper reports that lumber prices in last couple of weeks have shot up to many multiples, sky high, of their normal level. So Moore said that he expects pallet pools are already scouring the world for empty pallets, they're raising prices, they may convert some parts to plastic. So warehouses and shippers should probably be prepared to pay a big premium if they have to buy new pallets, he said
David Maloney, Editorial Director, DC Velocity 12:37
Ben, are there any companies that are taking action to solve the problem?
Ben Ames, Senior News Editor, DC Velocity 12:41
Well, this is all happening in real time, so it's hard to tell what steps industry is taking yet, but we did cover another story this week. When the pallet management service provider 48forty Solutions, tapped into their private equity backing—they have a, they're owned by a private equity firm—and they acquired another company in that pallet management sector called Relogistics Services. So, the companies say that by combining, they'll bring together 48forty's position as a national provider of recycled white wood pallets with Relogistics' role as a provider of pallet and container management services; they have more than 60 locations around the U.S. And Mike Hachtman, who is going to lead the new company, said it will also combine the retail- and service-focused solutions from Relogistics with the pallet recycling capabilities of 48forty. So, if the investors are right, those kinds of steps could allow those companies, and maybe others, to really find some new solutions to that pallett shortage.
David Maloney, Editorial Director, DC Velocity 13:43
Yeah, we'll continue to follow developments in the pallet market. Thanks, Ben.
Ben Ames, Senior News Editor, DC Velocity 13:47
David Maloney, Editorial Director, DC Velocity 13:48
And Victoria, you reported this week on the Logistics Managers' Index, and it showed that tight market conditions are continuing. What more can you tell us?
Victoria Kickham, Senior Editor, DC Velocity 13:57
Thanks, Dave. Yes, that's right. So, the conditions we've seen across the logistics industry persisted in April, and the outlook calls for more of the same, and as you say, that's according to the latest Logistics Managers' Index report, which is a monthly research survey that gauges economic activity in the industry. The April LMI increased to its second highest all time reading. It reached 74.5, which was well above the market's pandemic lows of a year ago. And I should note that an LMI reading above 50 indicates expansion in the industry and a reading below 50 indicates contraction. So, we're on a pretty big growth upswing here. I spoke to LMI researcher Zac Rogers, he's at Colorado State University, about the report, and he said that the April results were driven largely by, as you say, tight capacity across the industry. Also, high prices for transportation and warehousing and record-high levels of growth in inventory costs. He characterized the state of the industry this spring as very much a story of costs, and he noted that warehousing prices, transportation prices, and inventory cost, as I mentioned, combined—so those three combined—reached their highest level in the five-year history of the index. So, essentially, market conditions remain busy and costs keep going up, and that's the key takeaway this month.
David Maloney, Editorial Director, DC Velocity 15:20
So your reporting indicated that there's no end in sight. Did the researchers elaborate on that?
Victoria Kickham, Senior Editor, DC Velocity 15:26
Yes, they did. They said that growth in inventory in particular over the past year shows no signs of slowing down, and that's because of pent-up consumer demand, of course, and the supply chain's efforts to stock up to meet those demands. It was interesting, Rogers likens the industry's position to a runner nearing the end of a marathon, you know, very tired and ready to reach the finish line. But he said the problem is that everything on the horizon points to increased activity, you know, as the economy continues to open up and Covid-19 restrictions wane. On top of that, imports are expected to grow by double digits this year, consumer spending remains strong, and industrial activity is strong as well. There was a separate report out this week pointing to optimism among manufacturers and distributors for 2021, so there's that. Rogers concluded by saying, you know, logistics industry companies will pretty much have to just grit their teeth and endure the higher prices we're seeing as they kind of pay to play in this busy market. So, that was their response to what's ahead.
David Maloney, Editorial Director, DC Velocity 16:29
Right, and we should note, that readers can check out the story on DCVelocity.com, and there's also a link there to the LMI survey, which logistics and transportation executives and managers are welcome to participate in each month. Thank you, Victoria.
Victoria Kickham, Senior Editor, DC Velocity 16:43
Exactly, yeah. Right at the end of the story. Yeah, thank you.
David Maloney, Editorial Director, DC Velocity 16:46
And we also encourage you to check out our other stories on DCVelocity.com that we discussed today, and there are also podcast notes that are in the podcast Notes section, and you can find some direct links to some of the topics that we discussed today. Thanks, Ben and Victoria for sharing highlights of the news this week.
Ben Ames, Senior News Editor, DC Velocity 17:03
Anytime, Dave. Always fun.
Victoria Kickham, Senior Editor, DC Velocity 17:05
Yeah, you're welcome.
David Maloney, Editorial Director, DC Velocity 17:07
And again, our thanks to Paul Beavers of PCS Software for being with us today. We encourage your comments on this topic and our other stories. You can email us at email@example.com.
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And we'll be back again next week with another edition of Logistics Matters, when we will examine insights from a new report on supply chain risks, so be sure to join us. Until then, please stay safe and have a great week.