Logistics Trends and Opportunities in 2018
This past year was very challenging for shippers. The hurricane season exacerbated an already tight truckload capacity market and sent shippers scrambling to find ways to cover their rejected loads. This also caused rates to skyrocket ahead of the 2017 busy holiday shipping season. There are several trends that have been emerging in the industry for the past few years that are now standard expectations, and many more dynamic changes in shipping are coming in 2018.
Logistics Trends in 2018
Coming into 2018 I expect capacity to remain tight which means that rates will remain high. I also see shippers getting more creative around final mile shipping. UPS and FedEx continued with another annual rate increase which is putting more and more pricing pressure on large packages. UPS has another increase scheduled for mid-year that is targeted at the larger packages—think of ordering a big screen TV online. I think we’ll also see shippers and carriers challenged with delivering complete visibility to each shipment. Customers are demanding visibility to where their orders are, which is causing the shipper to need complete visibility to their supply chains. Not only do shippers now have to ensure they can deliver the customer’s order, but they must also provide the customer’s real-time tracking of the order.
Opportunities Around Actionable Data
Looking at these challenges, I see huge opportunities for shippers. I think that 2018 will be the year that shippers move beyond data and focus on actionable data. Shippers in 2017 were focused on collecting data and thought by having all sorts of data with a flashy front-end to view it would instantly improve their supply chain. What shippers found is that data alone won’t offer insight or provide intelligence. Further, the blinking red, yellow, green lights indicating shipment status were only right part of the time.
Moving forward, data alone will no longer be enough. Data must be the right data: cleaned and standardized for the data to be actionable. There’s a reason why UPS is going to do a mid-year rate increase on a focused piece of their rate structure, and I know UPS determined a rate increase was necessary with actionable data.
Speed is the New Reality
In December 2015, we blogged about how the customer experience with expedited shipping had affected business expectations. We saw speed as an emerging trend, but over the last few years we have observed that speed is no longer a trend, it’s the new reality. It’s all about speed. The customer expects products instantly. This has necessitated the shipper and carrier to integrate tighter and exchange much more information than before.
The speed expectation has also caused the shipper to expect the same thing around data. Shippers are now thinking in minutes and hours, instead of days and weeks with respect to data. Track and trace data can’t be more than an hour old or the shipper deems it to be useless. Analytics that are telling the shipper how they are performing must be running in real-time. The shipper can’t wait to pull a month’s worth of data, then spend another week cleaning the data, and another week analyzing it. The results must be at their fingertips constantly telling them how they are doing and what adjustments they need to make. Real-time, actionable data is the way to deliver on this expectation.