The challenges businesses face today demand courageous leadership and a new model of collaboration. What are the winning strategies, technologies, and business-models that can keep companies competitive while also building better, greener, and fairer economies? Hear from the speakers of Agility’s Tandem Talks breakfast series at the World Economic Forum’s Annual Meeting 2023.

WEF Tandem Talks: Macro Pairing | Money Pairing | Movement Pairing | Mindset Pairing

Agility Tandem Talks: Hassan El-Houry | Paul Baldassari | Sarah Chen-Spellings | Claude Letourneau | Beth Ann Lopez | Nadir Salar Qureshi

WEF Tandem Talks – Macro Pairing

WEF Tandem Talks – Money Pairing

WEF Tandem Talks – Movement Pairing

WEF Tandem Talks – Mindset Pairing

Agility Tandem Talks – Hassan El-Houry

Agility Tandem Talks – Paul Baldassari


Agility Tandem Talks – Sarah Chen-Spellings


Agility Tandem Talks – Claude Letourneau


Agility Tandem Talks – Beth Ann Lopez


Agility Tandem Talks – Nadir Salar Qureshi

By Tarek Sultan
CEO, Agility

There are plenty of flashing lights warning us of the possibility of a sharp economic slowdown in 2023.

We know that COVID-19 has reversed years of progress in global development. It has widened gaps in education, health, income and access to opportunity. It brought on the steepest economic decline since World War II and, by World Bank estimates, pushed 97 million people into extreme poverty.

Today, the global economy is slowing amid a flood of risks: depleted national budgets, war in Ukraine, high inflation, traumatized labor markets, tightening credit, disruptive climate events, a COVID-challenged China, and unprecedented supply chain instability.

As we look ahead, we face three key questions:

  1. How can we limit, repair and reverse the damage done by the pandemic and its aftermath?
  2. How can we create a system that’s more open, transparent and fair for the poor, developing countries, women, and small businesses?
  3. How do we ensure shared prosperity as we speed our transition to a low-carbon future?

It seems obvious, right? We should work to make sure the next phase of global growth includes geographies, businesses and people who’ve traditionally been left out. “The idea of inclusive growth has emerged as a central theme animating discussions on recovery and growth in the post-COVID world,” the World Bank says.

Not everyone agrees. Growth-first advocates view inclusion as a dangerous diversion that could sidetrack economic revival. They want us to focus on growth because they see any recovery as a rising tide that lifts all boats.

That’s a hard sell to those demanding inclusion. They warn that we could see a massive economic divergence between rich and poor, haves and have-nots. And they note that even before the pandemic, we were witnessing the highest levels of income and wealth inequality on record.

“This inequality has disproportionately affected communities of color, women, those less physically abled, and certain geographies,” McKinsey says.

Growth or inclusion is a false choice. Insufficient economic inclusion is — in itself — “a threat to prosperity,” as McKinsey says.

The consulting firm cites research showing that economies grow faster, more vigorously and for longer periods of time when the fruits of that growth are shared and distributed more equally across the population. Up to 40% of the GDP growth in the U.S. economy from 1960 to 2010 can be attributed to the increased participation of women and people of color in the labor force, McKinsey says.

At the same time, you can’t have inclusion and sustainability without growth as the foundation. So where will it come from?

There are four areas where technology can clearly be a powerful force for both inclusion and growth.

1. For small businesses.

Small businesses provide 70% of jobs worldwide and contribute 50% of GDP in developing countries, according to the International Labor Organization.

In the supply chain industry, a host of inexpensive new digital tools are bringing efficiency to smaller shippers and carriers. Among them:

  • AI-driven load matching (Frete, Flock Freight) – that allow shippers to pool goods on trucks and bypass freight hubs
  • Digital payments for carriers and other stakeholders (Relay Payments, FreightPay)
  • Credit, working capital and payments platforms (PayCargo)
  • Customs and security digitization products (MDM)
  • Online logistics platforms that combine a lot of these features (Shipa)

All of these tools improve cash flow and streamline financial operations by digitizing payments, reconciliations and discrepancies between shippers and carriers, dramatically reducing Accounts Receivable/Accounts Payable errors and processing time.

Digital tools also make sustainability viable for smaller businesses and startups, allowing them to take climate action and build more resilient businesses.

  • Free or inexpensive measurement tools
  • Resources such as playbooks, and matchmaking platforms that link them with potential partners and vendors (SME Climate Hub, SME360X)
  • Supply chain mapping tools that help small businesses do due diligence, customs compliance, environmental and social sustainability tracking, in addition to operations and business continuity planning (Sourcemap)

 

2. For women.

How can we do more to draw on the talents of women in the workforce, particularly in emerging markets countries, where they are most underrepresented?

One way is by making it safer, faster and more affordable to get to work. That’s what Swvl is doing in Egypt, Pakistan and other emerging markets countries with tech-oriented transportation.

3. For the unconnected poor.

Thirty-seven percent of the world’s population – about 2.9 billion people – has never used the Internet, the International Telecommunications Union says. Most live in developing countries. Nearly all are poor.

Poverty, illiteracy, and lack of connectivity and electricity contribute to this alarming digital divide. In Afghanistan, Yemen, Niger, Mozambique and the poorest countries, nearly 75% of people have never connected. That means remote learning was out of the question during the pandemic – and a major threat to a whole a generation of school children. Connectivity is the only way to address the dangerous “learning loss” that we experienced during COVID.

4. For those whose jobs are at risk from automation & digitization.

So-called frontier technologies are here. Many take advantage of digitalization and connectivity: artificial intelligence (AI), the Internet of Things, big data, blockchain, 5G, 3D printing, robotics, drones, gene editing, nanotechnology and solar photovoltaic.

While they offer incredible promise and productivity gains, these technologies will eliminate jobs. And without massive, targeted, well-resourced upskilling and retraining programs, the adoption of next-generation technologies could profoundly deepen inequality by shutting large numbers of people out of meaningful employment.

The World Bank’s Gallina Vincelette identifies four pillars for inclusive growth. They are life-long learning, removal of barriers to firm entry, trade that fosters competition, and a faster green transition.

Technology can supercharge all four, while bringing down costs, improving productivity and creating good new jobs.

IBM CFO Jim Kavanagh calls technology “the only true deflationary” force in a global economy where companies are struggling to cope with inflation driven by higher human capital costs – salaries, recruiting, retention, churn, overall cost of talent acquisition – plus higher materials costs, fuels costs, transportation costs, borrowing costs, currency volatility costs and other factors.

Growth and inclusion aren’t in conflict. They’re the essential ingredients of a better world.

This blog was originally published by the World Economic Forum

By Tarek Sultan
CEO, Agility

The global supply chain continues to sputter and break down more than two years into the pandemic. Each day comes news of choked ports, out-of-place shipping containers, record freight rates, and other problems that cause disruption and defy easy answers.

Unless you’re the one waging the day-to-day battle to move cargo for your organization, you should find a moment to take a deep breath. Step back and look at the larger picture because when ports eventually clear and rates come down, the way we manage and think about the supply chain will be very different.

How? Let’s look at the changes in the supply chain brought about by the COVID-19 pandemic.

1. Supply chain is on the front-burner for good

The supply chain finally has the C-suite’s attention, and chief supply chain officers are its new stars. In October, for the first time, corporate CEOs in a McKinsey survey identified supply chain turmoil as the greatest threat to growth for both their companies and their countries’ economies. Bigger than the COVID-19 pandemic, labor shortages, geopolitical instability, war, and domestic conflict.

At about the same time, Bank of America noted that mentions of “supply chain” in Q3 earnings calls by Fortune 500 companies had risen an astonishing 412% from Q3 2020 and 123% from Q2 2021 earnings calls, when the boardroom focused on the issue was already red hot. Fifty-nine percent of companies say they have adopted new supply-chain risk management practices over the past 12 months, including diversifying to reduce overreliance on China.

“We’re seeing a supply chain that is being tested on a daily basis,” Kraft Heinz CEO Miguel Patricio said recently.

 

2. Flexibility + resiliency + business continuity > cost

Before the pandemic-driven supply chain disruption, cost reduction and productivity enhancement were driving supply chain process improvements, digitization, and investment. Those drivers remain essential, but the unprecedented chaos triggered by COVID threatened the competitive position — even the survival — of many businesses that found they could no longer meet customer expectations.

The existential crisis brought on by the pandemic has forced companies to shift the focus of innovation and restructuring efforts to ensure business continuity by building resiliency and flexibility. McKinsey highlighted the vulnerability of manufacturers by showing how few had any visibility into their supplier networks beyond Tier 1 suppliers.

Flexibility Resilience

Clorox is one of many companies taking action. It is investing $500 million to upgrade its digital capabilities, citing the need for real-time visibility and better demand planning.

“Supply chain and operations teams must develop new capabilities―and quickly. Playing to a more balanced scorecard will require many changes: reducing the carbon footprint, building greater resilience in the supply chain, creating more transparency, and ensuring accountability,” says Bain & Co. in a new report.

 

3. Buyer-supplier relations have been altered

In certain industries, the failure of critical links in the supply chain has led to new alliances and co-development ventures between OEMs and suppliers. Alarmed by the shortage of semiconductors, for instance, Ford and General Motors have formed strategic agreements with chipmakers.

More broadly, there is a recognition that resiliency is impossible unless buyers, suppliers, and other parties along a value chain are willing to share data and collaborate. A new Reuters report, Where’s My Stuff? suggests that businesses could share sensitive, closely held data with partners by creating “cleanrooms” where joint teams can perform analysis without fear that competitive information will leak. Blockchain technology, which enables secure, access-controlled data exchange, also could be valuable in data sharing. It allows data storage and distribution through a decentralized network where there are no owners. 

“With the benefits of increasing collaboration through data sharing and visibility into deeper tiers becoming more obvious, addressing mistrust becomes a key objective and will require concerted and directed efforts. … (O)rganizations will need to move closer to their suppliers and build relationships and trust, but they can also use smart approaches to data sharing to make progress,” the Reuters report says.

4. Business lines are blurred and ‘workarounds’ are SOPs

Bold companies are not waiting for supply lines to untangle themselves. Retailers short on storage space are buying warehouses. Shippers that can’t find containers are making their own. Companies unable to book with ocean carriers are chartering vessels themselves. Those unhappy with their online sales are buying e-commerce fulfillment operators.

Amazon and ocean giants Maersk and CMA CGM are placing orders for aircraft and moving into air freight. Maersk and CMA CGM, in fact, appear to be on a collision course with Amazon and Alibaba in logistics, forwarding, and delivery.

Nimble shippers and manufacturers know they have to keep adjusting. They are using alternative ports, reformulating products, shifting to air freight, boosting in-house trucking, taking advantage of off-peak port hours, and diverting resources from low-margin products to bigger moneymakers.

In its healthcare unit, GE is redesigning products, using dual sources, and expanding factory capacity as it struggles to cope with semiconductor shortages and other supply chain changes and challenges that have caused turmoil in the medical technology industry.

GE and Stanley Tools are among the many companies that have sought to secure goods by shifting production, using forward contracting, turning to contract manufacturers, fast-tracking plant expansion, building new  contract manufacturing hubs, using dual-source manufacturing, and nearshoring, or making hard-to-get parts with 3D printing.

 

5. The inventory playbook has been ripped up

Companies know that disappointed customers might not come back. That’s why some consumer product brands are desperate to conceal stockouts and disguise low inventory, even reconfiguring in-store displays and using decoys to hide shortages.

More fundamentally, others are questioning the supply chain models they have worked so hard to make hyper-efficient. Automakers that spent decades fine-tuning and perfecting just-in-time systems have started to break with JIT practices because they don’t work when there are shortages of critical components. Toyota, Volkswagen, Tesla, and others are stockpiling batteries, chips, and other key parts and racing to lock up future deliveries.

“The just-in-time model is designed for supply-chain efficiencies and economies of scale,” said Ashwani Gupta, Nissan Motor Co.’s chief operating officer. “The repercussions of an unprecedented crisis like COVID highlight the fragility of our supply-chain model.”

To ensure they have enough to sell, retailers Nordstrom, PVH, and Gap have tried “pack-and-hold” strategies — over-ordering to prevent stockouts with the gamble that they can stash away unsold inventory and sell it as new next year rather than having to discount deeply.

In other industries built on lean inventories, there is a debate about whether we are seeing a permanent change in strategy – toward larger inventory and more safety stock – or a temporary one necessary because of higher demand.

The Reuters report suggests that more companies are prepared to implement aggressive Continuous Replenishment Programs and automate more of their ordering to avoid getting caught flatfooted without sufficient stocks.

What’s clear is that nearly two years after the world first learned of COVID, the supply chain is still experiencing an unfortunate series of firsts. A historic level of carrier unreliability. Record-high freight rates. Record-low warehouse vacancies. And more.

It will pass. When it does, look for more intelligent options that offer supply chain resilience for both the short and long term.

Agility’s Tarek Sultan joined the London Business School’s Middle East Club for a fireside chat on the rise of successful startups.

Nearly 90% expect export growth by using tech to overcome shipping, regulatory obstacles

DUBAI – May 10, 2018 – Small and medium-size businesses that have struggled for equal footing in the global economy are increasingly looking to cross-border trade for growth, seeing technology as a way past obstacles in shipping and compliance, according to new research from Shipa Freight.

Shipa Freight’s global study of 800 SMEs from developed and emerging markets shows that smaller companies are remarkably upbeat about their ability to expand through trade.

Eighty-nine percent of exporting SMEs surveyed say their export revenue will grow over the next three years. Seventy-one percent say they are concentrating more on international markets than on their home markets. The Shipa Freight survey included exporters and importers from the UK, USA, Germany, Italy, China, India, Indonesia and UAE.

Smaller companies account for an estimated 95% of all businesses and employ two-thirds of the world’s workers. Critics of globalization have argued that decades of efforts aimed at easing the flow of goods, capital and jobs across borders has come at the expense of SMEs and disproportionately benefitted multi-nationals and other large businesses.

“Smaller businesses used to think they couldn’t compete in trade. Now many see it as their best path for growth,” says Toby Edwards, CEO of Shipa Freight, the online freight service. “SMEs are not naïve about the obstacles to unlocking new markets. They see online tools and other technology as a way to conduct transactions, get financing and gather market intelligence.”

Three-quarters of SME executives surveyed by Shipa Freight believe businesses that operate internationally are more resilient. Nearly 80% say they are already using online platforms for freight quotes and bookings.

Roadblocks

SMEs identified numerous obstacles they face in international trade. Forty-two percent say the costs of shipping abroad are too high, or that they don’t have an accurate picture of their costs. Forty percent say they find it difficult to understand documentation requirements.

A significant minority say their cargo has been held up in customs (39%) or lost in transit (27%).

Small and medium-sized businesses based in emerging markets are finding export regulations particularly challenging: 67% identify export regulations as a difficult issue, compared with just 44% of SMEs based in mature European markets. Seventy-nine percent of exporters from India, China and Indonesia say they find it challenging to penetrate markets in Europe.

SMEs that view the UK as one of their top export markets are looking elsewhere because of Brexit. Seventy-three percent say Britain’s vote to leave the European Union has prompted them to prioritize trade with other European countries. Sixty percent of UK SMEs that export and 52% of UK SMEs that import say that leaving the EU Single Market would be “disastrous” for them.

New tech boosts export prospects

Smaller companies clearly see technology as a way to close the gap with bigger competitors, cope with documentation requirements and get quick access to competitive shipping options. Eighty-six percent say that tech is “leveling the playing field” for SMEs to operate globally; 89% believe technology is transforming the logistics industry.

“The logistics industry has traditionally ignored SMEs and done far too little to help them find new markets and grow,” Edwards says. “Technology is giving them the ‘virtual’ scale that they’ve needed to lower their costs, get real-time information and compete.”

About the study

Shipa Freight’s Ship for Success research examines the trade patterns and barriers of SMEs, defined here as organizations with 10-250 employees. The opinion research was conducted in winter 2017 amongst 800 companies (400 exporters and 400 importers). There were 100 respondents from each of the following markets: UK, USA, Germany, Italy, India, Indonesia, China and UAE. Study participants included SME leaders, such as managing directors and operations directors. Participating companies were drawn from the following sectors: retail and fashion, fast-moving consumer goods (FMCG), automotive (including supply chain), industrial and manufacturing, and technology. You can explore the findings and download the full report below. Download full report

 

Ship for Sucess thumb

About Shipa Freight

Shipa Freight is the new online service powered by Agility that makes it easy to get air and ocean freight quotes, book, pay and track your shipments online. With our global network of logistics experts and industry-leading technology, we ensure that your goods arrive safely and reliably every time.

For more information about Shipa Freight, visit www.shipafreight.com/
Twitter: twitter.com/ShipaFreight
LinkedIn: linkedin.com/company/shipafreight/
YouTube: youtube.com/ShipaFreight

About Agility

Agility is one of the world’s leading providers of integrated logistics. It is a publicly traded company with more than $4.6 billion in revenue and more than 22,000 employees in over 500 offices across 100 countries. Agility Global Integrated Logistics (GIL) provides supply chain solutions to meet traditional and complex customer needs. GIL offers air, ocean and road freight forwarding, warehousing, distribution, and specialized services in project logistics, fairs and events, and chemicals. Agility’s Infrastructure group of companies manages industrial real estate and offers logistics-related services, including customs digitization, waste management and recycling, aviation and ground-handling services, support to governments and ministries of defense, remote infrastructure and life support

For more information:

Sabrina Mundy
Man Bites Dog
+44 1273 716 826
[email protected]

‘Emerging markets’ refers to the combined results of India, China and Indonesia. It does not include UAE figures. ‘Mature European markets’ refers to the combined results of the UK, Germany and Italy.

This article is part of the World Economic Forum Annual Meeting

  • The number of potentially disruptive technologies in logistics is daunting.
  • This makes it difficult for supply chain businesses to know where to look.
  • Blockchain, IoT, automation and data science should be first on their list.

Astute business leaders discipline themselves to be on constant lookout for disruptive new technologies.

They foster an internal business culture that is able to evaluate promising technologies through a continuous cycle: Watch > pilot > partner > adopt or discard.

In logistics, as in many other sectors, the number of potentially disruptive innovations is daunting. It includes everything from augmented reality and big data to autonomous vehicles and 3D printing. Even the most agile businesses can’t test or pilot everything, so what’s the right approach?

For companies with goods to move, there are several technologies that bear watching and four that every party in the supply chain should be testing at some level. These four are the BIRD technologies – blockchain, the internet of things (IoT), robotic process automation (RPA) and data science.

The BIRD technologies are inter-related and mutually reinforcing. Blockchain, or distributed ledger technology, establishes trust in data. The IoT provides a vast quantity of relevant data points. RPA improves the accuracy of data. Data science extracts value.

1) Blockchain

Blockchain has its skeptics, including many who believe the technology has already fallen short and might be too inherently problematic. Some skepticism is justified, but it’s premature for blockchain to be written off.

The idea behind blockchain is that all of the information required for completion of a transaction is stored in transparent, shared databases to prevent it from being deleted, tampered with or revised. There is a digital record of every process, task and payment involved. The authorization for any activity required at any stage is identified, validated, stored and shared with the parties who need it.

In ongoing pilots of this technology, shippers, freight forwarders, carriers, ports, insurance companies, banks, lawyers and others are sharing “milestone” information and data about their pieces of an individual shipping transaction. What’s missing today is agreement by all the relevant parties in the supply chain – including regulators – on a set of common industry standards that will govern the use of blockchain.

Absent a consensus on standardization, blockchain offers little. But with a common framework and set of rules, it could make shipping faster, cheaper and more efficient by increasing trust and reducing risk. It would shrink insurance premiums, financing costs and transit times, and eliminate supply chain intermediaries who add cost today but who would become surplus to requirements.

2) The internet of things

As a platform for sharing trusted data, blockchain is ideally suited to the internet of things. IoT devices can be attached to almost anything. As 5G technology evolves and spreads, tiny IoT chips embedded in products will enable businesses to track and monitor shipments of pharmaceuticals, high-tech goods, consumer products, industrial machinery and garments.

That data can be encrypted and shared through the blockchain so that customers and suppliers have a real-time record of the transaction. An IoT-enabled supply chain would be both leaner and less risky. It would allow for true just-in-time production by guaranteeing inventory accuracy and, in turn, reducing working capital requirements.

https://www.youtube.com/embed/jQ1aEqVqRr8

3) Robotic process automation

Of course, data is no good if it is not accurate. In the supply chain, the leading cause of inaccuracy is human error. Robotic process automation, or RPA, is the artificial intelligence used to allow software to handle many of the steps involved in a shipping transaction by understanding and manipulating data, triggering responses and interacting with other digital systems.

Use of RPA can ensure accuracy in customs declarations, safety certificates, bills of lading and other paperwork. It can reduce reliance on the manually entered data, emails and digital forms that produce errors, create delays and add cost all along the supply chain. RPA frees up workers to be more productive by doing what humans do best: solve problems, react to the unexpected, think creatively and deal with customers.

4) Data science

Thanks to data science, we are in the midst of seismic change in the supply chain. We are getting more data from more sources; it is the right data; and it is accurate. Tools such as artificial intelligence, machine learning and cloud computing enable us to analyze and use that data in powerful new ways.

Rather than using information to sound alarms when there are “exceptions” – problems or anomalies with an individual shipment or in the supply chain – we can use it to prevent them. Data becomes about managing the future, not the present.

The risk, of course, is that only large, well-resourced supply chain players will be able to take advantage of BIRD technologies and other advances that involve harnessing data. That would create a dangerous new digital divide between large and small, haves and have-nots.

Thankfully, data is having a democratizing effect by making the global economy fairer and more inclusive in important ways. Small businesses and emerging markets companies aspiring to go global aren’t piloting blockchain or developing their own RPA applications. But they are already the beneficiaries of new, inexpensive, data-informed tools and platforms underpinned by artificial intelligence and machine learning: online freight booking, instant financing, automated marketing, cheap cloud computing and remote advisory services.

The BIRD technologies generate trust in data, ensuring accuracy and giving users the ability to predict and act. In a data-driven world, they can help businesses of all sizes take flight.

By Biju Kewalram, Chief Digital Officer, Agility GIL

Accurate data and effective supply chain technology are more critical now than ever before. Data-driven decision making is enabling organizations to flex their supply chains to cope with rapid fluctuations in supply, demand and transportation. And as companies and countries attempt to “build back better” from the crisis, lowering carbon emissions has risen up the agenda, and smarter supply chains are an important lever.

Ten years ago, this simply wouldn’t have been possible. Over the last decade, a number of technologies have emerged, with the combined potential to revolutionize the way we move products around the globe. 

We’re now moving into the stage of validation and implementation – accelerated by the current crisis – when the whole industry must push past R&D and into the industrial execution of smart systems. This stage will be critical in terms of bringing about actual, sustainable change.

What could the industrialization of these technologies mean for both businesses and consumers, and how can the businesses that haven’t yet implemented them catch up? 

The four key technologies driving change in the supply chain are blockchain, the internet of things (IoT), robotic process automation (RPA) and data science (BIRD). 

Blockchain generates data trust by enabling all players in a network to share a single (encrypted) database. Anyone with access can track the status and location of a shipment and, more importantly, identify opportunities for efficiencies on a larger scale than has been previously possible.

IoT technology is essential for gathering a vast number of data points. By implementing a system of smart sensors, stakeholders can accurately track sensory data (e.g., location, moisture, temperature, shock), reliably calculating arrival times and proactively responding to disrupted shipments.

RPA improves data accuracy in the chain by substituting human input (and resulting error potential) with software robots that update data within applications by reading them from other applications. This closes the “data confidence gap” when a chain of data updates is required (as in supply chains) to complete the visibility picture.

Data science is the key to unlocking this collective data value and making smarter decisions. Advanced machine learning is continuing to evolve, and AI will one day be used at each stage of the supply chain, although we are some way off this yet. In the meantime, setting up shared databases and making common inferences should be the focus.

What Are The Next Steps?

Now is the time to think about how these technologies can be transformed into deliverable solutions.We’ve spent a long time researching these revolutionary technologies, but only by starting to incorporate them into existing processes can we unlock their full potential.

Organizations at the front of the curve have been analyzing how these exciting digital solutions fit into their businesses, and at our company, we’ve supported a few pilots of certain technologies with clients who are eager to move their companies forward. 

So what are the key considerations when piloting new technologies?

Start Small

With a number of technologies waiting to be tested, companies must take an agile, experimental approach. Rather than endeavoring to carry out large-scale trials across the whole organization, businesses should start by implementing the technology in a specific part of the process and gradually scale it up. Working in this way will allow trials to be integrated into day-to-day operations, quickly and effectively gathering firsthand data on multiple technologies.

Consider Your Team

Selecting the right team is vital to running a successful pilot. Ideally, you want a mix of experts who can provide insight on how the technology can be applied to a specific part of the process and the impact this will have on wider business operations. They must also have the analytical skills needed to evaluate the findings and report back to stakeholders. Most importantly, they must be passionate about innovation. 

Partnering For Co-Creation

Carrying out individual pilots is one thing, but companies must push the boundaries of cocreation to test these technologies on a larger scale. Any change to the process will have knock-on effects along the supply chain, and the success of many technologies will depend on strong communication. Running pilots with trusted partners of different sizes will allow companies to analyze the adaptability of new technologies. Partners will need to start by agreeing on the problem they are trying to solve and the method they are going to use, as well as how they will measure success and share findings. 

Our company’s partnership with electrified trucking company Hyliion is an example of how companies can collaborate to create a more efficient, greener supply chain. We’re helping the company with its long-haul, fully electric powertrain — the HyperTruck ERX. It can achieve a net-negative greenhouse gas emissions footprint using renewable natural gas, and the system’s machine learning algorithm further optimizes energy efficiency, emissions, performance and predictive maintenance schedules.

Gauging Success

Before embarking on a pilot, companies must set out some clear performance indicators and decide on a system for recording results. New technology may show promise for a specific task, but can it be scaled up? What impact would it have on costs, revenue and customer satisfaction? Approaching trials scientifically will help to determine the long-term value these technologies could have in terms of business performance.

Many pilots will inevitably encounter problems, but these experiences are still valuable. A comprehensive debriefing process is necessary to identify whether a failure was due to a weakness in the product or the process and whether these problems could be ironed out through further testing.

Of course, with the logistics industry evolving rapidly, there is no fixed end to the experimentation process. Companies that adopt this systematic approach with an analytical eye and a resilient attitude will thrive in the big data revolution. Organizations must be willing to disrupt their current processes and collaborate because partnerships will be crucial for implementing new technology and making digital supply chain dreams a reality.

This blog first appeared in Forbes

Making every mile count

Revolutionizing logistics with digital freight matching

What if you could streamline your business, bolster productivity and slash your environmental impact?

Digital technologies are gaining traction in supply-chain logistics, unleashing a wave of efficiencies and unlocking multiple side benefits. In addition to boosting revenue and slashing operational costs, innovations like digital freight matching are reducing emissions, bolstering productivity and creating a more sustainable industry.

Using transport management software to match a vehicle’s capacity to nearby waiting shipments offers great potential, since lorries and trucks keep the global economy moving. In the US alone, they handle more than 70% of all freight tonnage.

Here are some of the key benefits offered by digital freight matching, which uses online and mobile technology to connect shippers who have cargo to drivers and trucking companies looking for loads:

1. Fewer empty trucks

Empty miles cost money. About 20% of the distance driven by US truckers is non-revenue generating, according to a report by the American Transportation Research Institute. Many industry experts say the actual number could be even higher.

By marrying the cargo to the truck as accurately as possible, applications that offer digital freight matching help eliminate these empty miles, boosting profitability while also lowering emissions and reducing the carbon footprint of the supply chain.

2. Better use of space

In the same way that they help to eradicate empty miles, digital freight tools can also make sure cargo space is being used in the most efficient way. Even experienced shippers can struggle to get the most out of the space on offer in each container and get the best return on investment.

Digital freight matching algorithms quickly calculate the optimal way for loads to be carried, helping drivers ensure they have cargo to carry in both directions before they set off – and all but eliminating the wasteful empty “back-haul.”

One company operating in Saudi Arabia offers a template of how this can work. There, 40% of trucks complete the return leg of their journey completely empty, costing the economy around $5 billion every year, according to the digital platform Homoola, which has financial backing from Agility.

“Knowing how big the inefficiencies were in the traditional way of doing things, we could see the enormous potential of a digital solution that made load-carrying more efficient,” Homoola’s co-founder Ziyad Alhomaid says.

3. Less time waiting

Using the technology in this way also cuts out the time drivers spend sitting idle while waiting for cargo. Connected systems facilitate planning that reduces loading, unloading and clearance logjams at ports and warehouses. In addition to a cost benefit, there’s a huge environmental upside, since an idling engine can produce up to twice as many exhaust emissions as an engine in motion. That releases a range of air pollutants including carbon monoxide, nitrogen dioxide, and other particulate matter.

4. More efficient fleets

Using digital freight matching technology allows firms to accurately estimate the numbers of vehicles and drivers required, not only for a given shipment, but also over a longer period. This enables them to right-size their fleets and driver pools, potentially saving significant amounts of money.

5. Less traffic on the roads

Cutting out unnecessary journeys reduces congestion and emissions. Any technology that helps reduce the number of heavy goods vehicles will have an instant environmental impact. In the UK alone, they are estimated to account for around 17% of greenhouse gas emissions from road transport and more than 20% of road transport nitrogen oxide emissions, while making up just 5% of all vehicle miles.

6. Paperless deliveries

Documentation associated with shipping often mounts up. Digital freight matching apps allow this to migrate to the cloud, saving time, money and energy, instantly cutting waste.

“Shipments often come with a lot of paper,” says Homoola’s Alhomaid. “We’re reducing this on the carrier side, as well as for shippers, and working towards a paper-free solution. It saves time, money, energy – and the environment.”

7. More transparent pricing

Technology can also aid price negotiations, letting both sides see a range of different prices, in real time, at the click of a button. Faster, more liquid transactions conducted via an app can be beneficial to both sides.

In 2016, US businesses spent more than $1 billion on logistics, much of which was procured in long-term contracts of more than six months, according to a report by the consultancy firm A. T. Kearney. Signing lengthy commitments is a financial risk for both the shipper and the carrier, whereas a more dynamic market – created by digital freight matching – helps to mitigate these risks because both parties have a better handle on fuel prices, surcharges, tolls, taxes, tariffs, driver’s rates and other costs that they will incur.

Such tools also improve transparency, visibility and comparability of pricing structures, and can be updated in real-time.

8. Stronger safety standards

In the same way that it bolsters pricing transparency, digital freight matching also gives better visibility to the documentation that’s involved in the industry and can help make the safety aspect less opaque. Driver certifications and safety records can be made easily accessible and readable on mobile devices. In time, distributive ledgers could also create instantly shareable records.

At any given time, for example, a shipper can see a truck’s location, have transparency over the associated costs, and gain insights into important points like on-time delivery. Certificates and records are accessible to all who need them, whenever they’re needed.

For Homoola co-founder Asim Alrajhi, this safety aspect goes together with enhancing quality control.

“It’s a fragmented market,” he says. “Things are done on the phone rather than digitally, and often there’s no quality assurance.” While digitalization is still at an early stage, the market in trucking is set to balloon to around $80 billion by 2025, up from around $11 billion currently, according to estimates from market research firm Frost & Sullivan, which also predicts digital freight brokerage will make up the lion’s share of that.

Once such technologies are adopted, they will improve predictability, speed, transparency and sustainability. This will ultimately result in the seamless delivery of any item, anytime, anywhere at a lower economic and environmental cost.