Advanced Tech Influencing Traditional Freight Business Models

Advanced Tech Influencing Traditional Freight Business Models

With changes and technological advances, you may often see ripples in the way things have been done for years and that is to be expected, but what if they are causing more than just a ripple. With more and more innovation occurring in the transport and logistics industry, you need to be advised on how advanced tech is influencing traditional freight business models and how to stay afloat in the long run.

Let’s take a look back at issues in which have occurred in the past and why the need for advanced tech in the transport and logistics industry was first called to action. Delivery of commercial cargo especially to those in urban areas become an expensive feat  not to mention logistically difficult. Thus , to counter this problem, suppliers looked towards technology. For instance, with large commercial cargo deliveries, trucks are considered the most effective for deliveries between cities however; the last-mile logistics or LML can be a challenge. LML is essentially the transport of goods at the end of a supply chain, that is the movement of the goods from the warehouse to its final delivery destination, which in most cases, is a personal residence. The LML goal is to be able to deliver the goods as quickly as possible whilst minimizing company costs. The problem is large trucks used for LML is that whilst it proves the ideal choice for deliveries between cities, they are fuel inefficient, tend to be left idling, and also block driving lanes which is obviously a problem in urban areas.

The transport and logistics industry has looked at ways in which this can be countered, with means of which also involves advancing traditional freight business models to those that will improve efficiencies in the long run. As per Navigant’s Research advance tech influencing traditional freight business models, include the likes of the following;

  • commercial vehicle automation,
  • electrification of delivery vehicles,
  • robotic/drone deliveries,
  • smart logistics platforms,
  • logistics software,
  • artificial intelligence,  and
  • advanced data analytics.

Whilst we have seen the technological advances in freight brokerage business model with smart logistics platforms, this has sparked the rest of the transport and logistics industry to take notes, adapt, and change accordingly. Especially with labour costs on the rise, there are many ways in which the traditional freight business model can adapt and change. With the likes of delivery robotics (including drones) in the case of LML, can truly turn that sector around  with faster, cheaper and more  efficient deliveries in comparison.

Image: Digital Greenwich

What are your thoughts with the fast approaching changes in traditional freight business models?