How datafication is reshaping digital transformation in transport and logistics. By Richard Davies

As we enter the autumn of 2023, the transport and logistics landscape remain immersed in a prolonged phase of volatility stemming from the enduring aftermath of the Covid-19 pandemic. Focused on growth in a time of economic recovery, transport and logistics organizations face a raft of challenges as external factors combine to ensure that the road before us is anything but smooth. Both industries are experiencing a heady combination of disruption and transformation, with exciting innovations starting to deliver on their potential.

We are already seeing the incredible potential of data-focused digital transformation, such as artificial intelligence (AI), revolutionizing how transport and logistics companies operate. Being able to change operations in ‘real-time’ will be a game changer.

With all this in mind, what are the main trends shaping the movement of people and things?

Here are five areas where advanced data use is currently shaping transport and logistics companies this year:

Richard Davies

Macroeconomic conditions are increasing the pace of transformation in the logistics sector.
Sustained high fuel costs are continuing to have a transformative impact on the logistics sector this year, exacerbating already difficult operating conditions. This will continue to drive a need for greater efficiency across the board and means businesses must seek productivity gains to continue to offset high fuel prices and to remain operating. Investment in digital transformation, in particular solutions that capture and manage real-time, high-quality data from multiple sources, can help businesses unlock efficiencies and adapt operations rapidly to prevailing conditions.

Data dexterity is powering innovation as electrification and automation rollout continues.
As a general trend, the effective collection, analysis, management, and application of data has driven diverse use cases, covering everything from route planning and demand analysis to companies’ ability to integrate with the wider transport and logistics ecosystem. The sheer amount of data being generated is daunting for most organizations and making this into actionable data is critical. The prolific data spawned by the increase of electrification across road, rail, air, and maritime transportation requires careful handling, analysis, and dissemination to optimize performance and customer service.

Organizations using legacy technology are struggling to extract data from siloes – with some of them unable to access it at all. This will highlight the need for solutions that work with legacy tech but also unlock the power of the data within the business, making it more accessible and agile to power modern use cases and inform decision-making.

The evolution of Mobility-as-a-Service (MaaS) continues.
MaaS offers new solutions for personal mobility using a mix of public and third-party transport options unified into a single user interface that simplifies end-to-end journey planning and payment. The ideal of being able to plan and manage a seamless multimodal journey is much more complex. MaaS has already seen higher demand as disruptions across public transport networks cause frustration and people seek alternative options. This has been shown by predictions in the market forecasting MaaS to be a $40.1 billion market by 2030.

Additionally, growing public concern for sustainability – coupled with rising costs of running private vehicles – is causing travelers to look for greener and cheaper transport solutions. Transport providers must ensure they can provide the right level and sophistication of data to MaaS applications or risk being left out of the personal mobility loop.

Last mile competition escalates.
Logistics companies have been trying to solve the costly last-mile conundrum for decades, but the rise of omnichannel customer choices and greater competition means they must become increasingly flexible. Retailers that have seen recessionary are facing pressure to seek last-mile innovations that serve customer preferences while keeping costs under control as fuel and personnel costs grow increasingly unpredictable.

Whilst the shift to innovative possibilities such as electric vehicles and drone deliveries is essential, other solutions are emerging – such as crowdsourcing private couriers through Uber-style apps and setting up neighborhood collection points. Advanced data availability and real-time analysis fed into an original AI technology will be critical for these solutions so that logistics providers can ensure where goods are, what delivery options are available, and what costs might be incurred.

Supply chain disruption will drive innovation in the logistics sector.
Freight disruption is set to continue due to geopolitical risks, cyber threats and economic instability overall impacting supply chains and continuing to create bottlenecks. These problems need solutions such as agile alternative routing and advanced warehousing strategies to minimize the amount of disruption experienced by customers.

Companies need greater visibility and control over logistics flows and the ability to share this information with stakeholders in the product journey. Consequently, data availability, collation, and analysis capabilities are critical to enabling logistics companies to adjust processes in real-time to minimize costs and speed deliveries. The ability to pivot your operations ‘real time’ is for many still something of the promised land. Those that have structured their businesses around the data will be well positioned to win.

Unlocking this data won’t be without its challenges. Legacy technology, siloes, and the inability to open proprietary data to third parties all act as blockers. By building data platforms that work collaboratively with legacy systems, companies can remove the risks associated with rip-and-replace projects, while still evolving into more adaptive, responsive businesses that today’s volatile environment demands.

For a list of the sources used in this article, please contact the editor.

Richard Davies
Richard Davies is UK Managing Partner at Netcompany. Netcompany delivers business critical IT solutions and consultancy that helps customers to achieve significant business benefits in a digitized world. Netcompany also helps customers to manage and operate IT solutions both on location and in the cloud.