Technology: How will it disrupt the logistics industry in future?

By Abhineet Kaul,

Director, Public Sector & Government Consulting Practice,

Frost & Sullivan

©2018 This presentation is copyright of Frost & Sullivan (S) Pte. Ltd. No parts of this can be reproduced without permission of the author.

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at A Glance

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How are we planning to ridethe coming storm?

New business

Models to compete

effectively

Use of technology to

achieve efficiencies

Skill development for

future ready manpower

Cost cutting &

business optimization

The industry is preparing a 4-pronged approach

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Online B2BOpen public networks, Blockchain, and

Smart commerce

On-demand LogisticsNon-asset based – crowdsourcing and

aggregating asset capacity

Unbundling of Logistics

Solutions

Specialized niche market operators

focusing on unmet needs

Online FulfillmentHub to spoke; click-and-collect, same-day

deliveries, locker boxes, in-store pick ups

Specialized Supply ChainIndustry-specific supply chains catering to

consumer needs

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05

03

02 01

Unbundled logistics solutions and marketplace models leading to new last-mile solutions are the major industry trends expected to transform the logistics industry

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The freight logistics industry is experiencing a sweeping transformation of the scale last seen in the 1990s when IT revolutionized logistics

Impact of Digital Technologies on Logistics Collective impact of digital technologies on logistics expected to replace some business models and give rise to a new breed of business entities

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Evolution of Digital Technologies Adoption rates may vary by technology and region, but lack of awareness may lead organizations to obsolescence

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Digital Transformations in Logistics are result of dynamics of the overall disruptions in the logistics industry

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Mobile Devices and Apps and Their Impact on Logistics Mobile devices and apps has impacted the entire logistics value chain

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Big Data and Analytics will create a value-add of about $500 billion worth of time and fuel savings for the transport and logistics industries by 2020

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The increased adoption of cloud platform-based IT services has pushed the market to generate a cloud infrastructure service revenue of over $24 billion in 2015

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Automated storage retrieval and pick-pack processes increase capacity utilization and reduce process time - the demand for warehouse automation is expected to drive revenue to about $40 billion by 2020

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The commercial implementation of autonomous vehicles is bound to disrupt every industry that deals with transport

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The enterprise sales of AR and the related services are expected to reach about $5 billion by 2020

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Rise of blockchain able to remove freight brokerage systems by making transactions recordable and traceable, providing a system that is transparent, efficient and market-oriented.

Shippers

Shipper contacts

either the freight

broker or carrier

Consignee

Customs and Regulatory

Agencies

Blockchain

Transportation Distribution

Purchasing

Customer

Service

Other

There is almost no need for intermediaries and freight brokerage services due to automation. With

that, letters of credit or payment processing for freight , insurance while in transport, down to

duties, taxes, customs fees via terms of sale will be created through smart contracts which

includes currency adjustment (hard currency or cryptocurrency).

Carriers

Freight brokers

Rise of Blockchain expected fasten the supply chain management and accelerates the trade growth

Competitive Advantages of Blockchain:

• Improved Tracking of Orders and Assets-

Brokerage companies using blockchain technology

able to provide detailed information about supplier

information, manufacturing details and logistics

information.

• Lower Errors in Payment Processing and

Auditing- Auditing may not identify all the

overbillings or overpayments. But, blockchain able

to reduce these errors by creating a finite paper-trail

to isolate where the problem occurred.

• Higher Trust by Consumers- Customers can

easily identity if the broker is genuine by tracking

the past deals of the broker and know if the carrier

company offers realistic delivery expectations for its

truck drivers.

• Enhanced Scalability- Blockchain technology can

be used to identify potential trends and possible

surges in the market. Furthermore, the use of

blockchain technology is less regulated, which will

aid in smooth entry of brokers and brokerage

companies entering the market.

Image Source: Flaticon; Source: Frost & Sullivan

New technologies

related to data

analytics & cloud

computing

Increase

proliferation of

automation

(robotics/ drones)

Increased

investment in

environmental

technologies

Blockchain -

Increase in

information

sharing between

stakeholders

Improvement in

satellite/remote

operation

capabilities

Increased

automation and

digitisation of

processes

Shift towards

clean

energy/alternative

fuels

Augmented Reality

Internet of Things

Cybersecurity

Technology is an enabler for future-ready logistics industry

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These technologies are

expected to create an estimated

$200 billion opportunity in the

global logistics industry by 2020

Final Thoughts

The combined impact of digital

technologies has resulted in

new types of business entities

and business models in the

logistics industry

Each area of logistics will move

toward adopting machine-

based decision-making

systems with effective data

capture capabilities

Abhineet KaulEmail

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Website

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©2018. This presentation is copyright of Frost & Sullivan (S) Pte. Ltd. No parts of this can bereproduced without permission of the author.