A couple of years ago, The Economist published an article claiming the world’s most valuable resource is no longer oil, but data. The main point of the story is that, while oil has been the dominant commodity for the last 150 years—and those who controlled oil created huge wealth and influenced global economies, government policy, and trade—the shift today is away from oil to those that control data: Google, Amazon, and Facebook. Like oil, data is not as useful in its raw form, but needs to be refined and processed to become valuable. While The Economist article was referring to consumer data and the big ecommerce players, the same transition is taking place in transportation and logistics.

Major technology trends are enabling our customers to transform how they can leverage data to strengthen their supply chains, deliver better customer service, and create agility by finding new suppliers quickly. In particular, in the last five years, the emergence of APIs, logistics networks, and analytics have started to unlock value of data.

Delivering on Heightened Customer Expectations

Whether you call it ecommerce, the Amazon effect, or the delivery economy, end customers are transforming transportation processes and teams with increased expectations, expanded delivery models, and real-time visibility. With access to real-time data, transportation teams are dramatically improving how they serve customers by knowing when a shipment is at risk, or potentially late. Predictive ETAs and proactive notifications help eliminate disruptions, cutting down on costs and improving efficiencies. Whether our customers are using third party carriers or managing their own fleets, knowing exactly where their customer deliveries are in real-time is no longer a luxury; it is required to compete.

Collecting and refining the data to provide visibility is no simple task. First, it requires a larger network that supports multiple connection methods, including ELD, carrier dispatch systems, and mobile applications. Second, beyond basic location data, there needs to be the ability to capture milestones and events electronically, as well as driver activities such as POD, or pre- and post-arrival tasks. Finally, the data needs to be normalized, cleansed, and available for consumption in other applications such as TMS, dock and yard solutions, CRM, and your ERP.

Strengthening Your Supply Chain Through Digitization

Strengthening your supply chain comes down to building better relationships with your partners, whether that means suppliers, carriers, or intermediaries. Increasingly, this is more about sharing and collaborating with data. This could include capacity data for trucks, planned order volumes for products, expected delivery dates, etc. It’s more about collaborating to drive improved service for the end customer and reduce overall costs.

The data fueling these initiatives is moving from one-to-one sharing to many-to-many, and the network effect ends up accelerating value. Two examples come to mind: freight broker capacity collaboration and shipper of choice benchmarking.

There is huge opportunity for value in brokers sharing excess capacity in a co-op with other brokers. In speaking with customers, when brokers book a load, they only have follow-on freight for their carrier 15% of the time. This leads to higher costs for brokers, and lower utilization for carriers. Most brokers cannot scale their own data to overcome this gap so, by sharing this excess capacity with others, and getting shared capacity in return, brokers can drive significant operational improvement and carriers get more paid miles.

Shipper of choice benchmarking provides the ability for shippers to evaluate themselves against their peers and to obtain feedback across carriers on how they can drive continuous improvements. Do their facilities create more or less detention time? Do their carriers perform better or worse for them versus their peers? Data to feed these programs can only come from a multimodal open, digital network like Descartes Global Logistics Network™ (Descartes GLN™).

Creating Agility with New Suppliers

The past year has seen tremendous change in the global trade landscape. Trade wars, rapidly changing policies on duties, and renegotiation of trade agreements have created increased uncertainty and business risk. This has forced companies to reassess where they source and manufacture their products and compelled them to be much more agile in adapting their supply chains.

Global trade data, along with duties, is no longer restricted to the realm of international logistics teams. Sourcing and procurement teams are now using trade data to better understand emerging regions, countries, and manufacturers for key products and commodities. Coupled with tariff/duty data, they can also get a better handle on landed costs. These data sources help organizations find new suppliers and balance the trade-offs in terms on costs.

Analytics and Artificial Intelligence

While most of the use cases above are operational, the wealth of data, along with advanced algorithms and cloud computing, create a new set of solutions leveraging artificial intelligence (AI) and analytics.

Analytics used to require an IT team, a complex data warehouse project, and endless integration and data normalizations. Today’s modern supply chain solutions are already built on a network, the data normalized, standard interfaces and open APIs included, and tools are provided that “democratize” the visualization. This creates huge value for the operational teams in logistics, fleet management, and transportation to tailor an analytics solution for their specific needs.

AI is the next frontier in processing data as a means to further accelerate improvements. With analytics, customers get better visibility and answer questions sooner; with AI, the answers are being provided. For example, AI might suggest selecting a carrier based on performance, or shifting a delivery date to avoid congestion. Other examples could include identifying which drivers in your fleet should spend more time (or less) during a customer delivery. On the international trade side, advanced solutions are starting to suggest import classifications.

Ensuring Your Transportation & Logistics Technology Partner Helps Fuel Your Success

Ready to win using data? Here are key attributes to look for in a transportation and logistics technology provider:

  • Multimodal digital network – This is critical in sourcing, normalizing, and making data available as the “raw” material. The larger the network, the more participants—and more types of participants (e.g., shipper, forwarder, broker, carrier, etc.); these all contribute to the network effect and the value of the network.
  • Cloud-based logistics and transportation management solutions – These drive the automation that is the first use of refined data (e.g., automation of carrier selection, tender/accept, routing, real-time visibility, import classifications). Additionally, these solutions have started to incorporate AI.
  • Analytics – Prebuilt and customer-friendly tools to visualize data to drive better and faster decisions. This must go beyond your own BI tools, since the provider has broader access to data from the network and can provide insights and benchmarking outside of what a typical enterprise can access.

How do you use data to fuel your growth?

Written by Brian Hodgson

Senior Vice President, Industry Strategy Product Management