In shipping logistics, the Internet of Things relies on the Expertise of People.
“Digitization is set to revolutionize the logistics industry,” according to an article published in 2017 by dhl.com. “[The] IoT [Internet of Things] enables the exchange of information between all parties involved in the supply chain process.”1
A more recent article, published by talkinglogistics.com, takes it further, saying that our industry is in the midst of a “transformational journey.” The article cites three key benefits of digitization—collaboration, automation, and analytics—and defines collaboration as “the ability to take information gathered from many supply chain partners who may be in different countries, different time zones, and may speak different languages, and display the information on web browsers to inform people so they can make better decisions.”2
Regarding automation, the article stated, “by letting applications share data and analyze supply chain operations, usually much faster and more accurately than humans, people can be removed from routine processes so they can concentrate on exceptions.”2
In other words—with the possible exception of, well, “exceptions”—the primary work of freight forwarders has all but been taken over by technology.
The truth, however, is very different. Contrary to what the industry press would have you believe, the global logistics industry is not driven by technology. It has not been Uber-ized. If anything, the opposite is true. The industry still relies on a solid foundation of experience, expertise, and human connections. And the irony is that the human work creates the data.
“In the last three months, we’ve started seeing a shift in focus,” says Mark Laufer, CEO of Laufer Group International. “A realization that digitization, while an important aspect of our business, is incremental, not a fundamental change. If anything, it simply provides forwarders an opportunity to do more for their customers.”
“Though today’s talk is all of delivery drones and driverless vans,” said a recent economist.com article, “the key to this [global logistics industry] transformation has been not new equipment but new ways of handling data: knowing where hundreds of millions of things are and where they are going, and being able to act on that data as things change.”3
Talkinglogistics.com said about analytics, the third benefit of digitization: With “an aggregated master database with transaction history, [you can] better understand your supply chain and take advantage of opportunities to optimize operations and improve collaboration.”2
In other words, data is a tool. On behalf of shippers, freight forwarders use data to take advantage of opportunities. They also use it to anticipate and solve problems that can complicate bookings, timing, customs clearances, and insurance; coordination of sea, road, and rail transport; and many more milestones along the journey from loading dock to receiving dock.
Though there is plenty of daylight between the reality of global logistics and what the press has written about it, in practice the two are linked. “The important thing to remember is that if you cut out the human factor, you end up losing most of the value that technology brings to the supply chain equation,” Laufer says. “Technology provides the tools to make people better. It’s not meant to replace them.
“Fundamentally,” he adds, “people are still in control of the supply chain. It’s real people—logistics experts—who move goods around the world, not the technology created to keep the facts and documents organized.”
1. “Digitization: A Potential Revolution for the Logistics Industry?” Amadou Diallo. http://www.delivered.dhl.com/en/articles/2017/11/digitalization-a-potential-revolution-for-the-logistics-industry.html. November 2017.
2. “Digitizing the Global Supply Chain: Three Ways to Create Value.” Adrian Gonzalez. http://www.talkinglogistics.com/2018/04/18/digitizing-global-supply-chain-value/. April 18, 2018
3. “The global logistics business is going to be transformed by digitization.” http://www.economist.com/briefing/2018/04/26/the-global-logistics-business-is-going-to-be-transformed-by-digitisation. April 26, 2018.
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