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Tag: Transporeon

Brexit’s Impact on the UK Logistics Industry

Posted on by David Priestman

Since the historic referendum in June 2016 Brexit has been a seismic event, reshaping the landscape of the UK’s logistics and transport sector. With the official departure from the European Union on 31st January 2020, followed by subsequent negotiations and agreements, the impacts continue to reverberate throughout the industry, raising questions about its future trajectory.

There’s no denying that the aftermath of Brexit has seen logistics businesses grappling with a host of operational adjustments, from managing delays in transportation to navigating intricate import and export regulations. Meanwhile, compliance with new import and export procedures and health regulations have posed formidable challenges for businesses of all sizes. Nick Ghia (pictured), Chief Revenue Officer of Transporeon, a Trimble company, explores how Britain’s split from the EU has affected the logistics Industry as a whole.

Paperwork at UK Borders

Due to customs changes being introduced as a result of Brexit and the end of free trade between Britain and the EU, the knock on effect has seen the introduction of more paperwork and logistics businesses having to meet new product standards which are stricter, particularly when trading restricted goods and livestock, to name a few. These new customs regulations have made it more difficult and time-consuming to ship goods between the UK and the EU. Ultimately this means that businesses reliant on international trade have had to adapt to the new regulations, which has added costs and delays.

Brexit’s impact on UK borders is starkly evident in the realm of food exports, with significant financial burdens placed on businesses sending products to the EU. In fact, in recent reports, lorry drivers from continental Europe are set to reject jobs taking them to the UK unless delays are reduced and driver conditions improved at post-Brexit border posts. The delays are due to the border checks for plant and animal products brought in on 30 April. Not only this, but the requirement for exporters of foods of animal origin to obtain veterinary sign-offs and export health certificates (EHCs) has led to a significant rise in costs. And with data from the Office for National Statistics showing the amount of meat products exported to the EU from the UK in 2023 totalled £1.26bn, a 17% drop from the £1.53bn exported in 2019, this notable decline in exports, combined with the rising costs associated with Brexit, will affect smaller producers. Consequently, some companies have faced reduced profits or even had to cease exporting activities altogether.

The introduction of reciprocal measures by the UK in response to EU requirements further exacerbates the situation, potentially putting EU exporters off from engaging with the UK market due to increased bureaucracy and costs. While larger companies may absorb these new expenses, the ramifications, again, for smaller enterprises are profound, prompting concerns about the sustainability of their operations.

Delays at the border

The delays at the border caused by Brexit have been well documented over the past few years and in turn have helped cause numerous issues for all industries, however, the food industry has potentially suffered the most due to lack of warehousing facilities and a short shelf life making the process seemingly impossible. The medical sector has also been hit hard by delays at the border, with some suppliers in the UK being forced to stockpile medication and other emergency items.

The delays have also seen an increase in crime at the border. In fact, there were 5,373 reports of HGV and cargo crime in the UK in 2023, according to NaVCIS, with an estimated cost of the loss in value from the thefts alone of £68m – with the retail value much higher. As well as this, according to the Environmental Systems Research Institute (ESRI), the volume of products traded between the EU and the UK has decreased by one-fifth as a result of Brexit. Again, these delays have particularly impacted smaller businesses that make up the majority of the logistics industry and are already struggling with cost of living and business pressures. Delays at borders (alongside with COVID-19) were also cited by the The Road Haulage Association as the root causes of driver shortage.

Navigating post-Brexit impact with smart logistics solutions

In order to navigate the aftermath and constantly changing regulations of Brexit, shippers can adapt and leverage carrier networks and connectivity to manage their increasingly complex transportation networks effectively. This includes the likes of shipment tendering, visibility, and invoicing. Currently, the majority of transport companies offer shippers varying levels of visibility, for example, tracking and monitoring messages through existing technology infrastructure. And, with research published by Gartner stating that a quarter of all logistics KPIs will be powered by generative AI by the year 2028, for logistics providers to get ahead of the curve and thrive, they should be looking to utilise a Transportation Management Platform (TMP) that uses AI and machine learning to improve the accuracy and efficiency of complex logistics situations — like Brexit — to enable their businesses to focus on what people do best: service and strategy.

However, for smaller shipping businesses, the reliance on tracking drivers and monitoring shipment execution highlights the disparity in accessing comprehensive information compared to larger companies. This is primarily due to the cost-prohibitive nature of extensive hardware requirements. But, by implementing an effective TMP, shippers can unlock the potential to collaborate seamlessly with both smaller and larger transportation companies without sacrificing visibility. This approach fosters a more inclusive and efficient logistics ecosystem, benefiting all parties involved and reducing the effects of events like Brexit damaging their operations.

The necessity for a smart TMP has never been greater. For smaller exporters, such a platform could reduce delays significantly by streamlining documentation and compliance checks and with the additional chaos caused at the UK border following Brexit. For too long now, drivers have been trapped in endless queues armed with unfamiliar paper documents, whilst shippers have been grappling with the nightmare of damaged goods before their destination. A more digitalised approach could have facilitated the transition by alleviating the administrative burden on drivers, stopping language barriers, and providing real-time updates to shippers and carriers.

As we reflect on the key milestones of Brexit, from the initial referendum to the subsequent negotiations culminating in the UK’s departure from the EU, it’s evident that the impacts of Brexit on the logistics industry are profound and far-reaching. Some logistics companies have found new opportunities within the UK market, especially as they invest in technology to address the new challenges. The benefits of cost-effective and sustainable transportation planning, optimisation will be reaped if both shippers and carriers are focused and willing to adapt. The ability to support continuous planning across all transportation modes simultaneously will be fundamental to delivering cost and sustainability goals effectively across the entire transportation network for all orders.

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Post-Brexit Border Check Delays

 

Will the Olympic Games Disrupt Transport Operations in France?

Posted on by David Priestman

From today France enters the spotlight with the Olympic Games. The preparations leading up to the games, as well as the event itself, are expected to significantly impact transport operations. Factors such as road closures, overall traffic, and increased security levels, all against the backdrop of rising transport demand associated with the event, will likely not just affect the Paris region but the entire country. Christian Dolderer, Lead Research Analyst at Transporeon, says now it’s a good time to assess what data and the derived KPIs show. Is there already an effect visible due to the event?

Spot prices are heavily influenced by the market forces of demand and capacity. While demand is expected to slightly increase, the market will likely face reduced capacity and increased inefficiencies due to the Olympic Games. This is expected to result in a continued increase in contracted load rejections (transports that are either timed out or rejected by carriers on the Transporeon platform) and a decrease in the number of offers per load on the spot market. The first metric indicates that more loads will be moved to the spot market, not only for the impacted weeks, but also for the preceding and following weeks. The second metric provides insight into market competition, reinforcing the basic theory that more offers lead to lower prices, and fewer offers lead to higher prices.

France domestic road transportation

In May 2024, during the public holiday season, France showed a strong market reaction with significant spot price increases. Offers and rejections followed the expected behaviour. This assessment is crucial to understand how the market is likely to react and to which level it will likely return to after these sportive weeks. Weeks 28 and 29 showed increasing prices while rejections and offers started to fall short.

Are we already seeing a clear and direct impact of the Olympic Games in these movements? I must answer with no.

Although initial signs, such as the described price increases and decreases of influencing factors, are visible and could be caused by the event, these changes could still be seen as usual spot market behaviour and fluctuations. What we can confirm is that, seven days before the Olympic Games, none of the prior described potential effects significantly affected the French domestic market. However, this does not necessarily mean that there will be no effect at all; it could still be too early to see a direct impact.

The expectation trend shows my expectation of price increases, including a high variance. So far, it’s hard to assess as spot rates could also easily take off in this tense market situation (Olympic Games and vacation season). Also at the borders to France, all is quiet so far. During the last hours and days, no unusual situation was monitored. Fears that the transport sector will face significant efficiency problems ahead of the event have not materialized yet.

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Container Ship in Marseille Welcomes Olympic Flame

 

More Turmoil for Shipping?

Posted on by David Priestman

Geopolitical upheaval and legislative change: More turmoil for shipping ahead.

There’s no such thing as a typical week for shipping. Global routes form a delicate web, and disruption is to be expected. From inclement weather to economic headwinds, disruption rarely makes global headlines, as contingency planning by shippers and carriers usually shields consumers from its effects. Notable exceptions include the period following COVID-19 lockdowns, when the whole globe felt the impact of port congestion and skyrocketing shipping costs. Recent events appear similarly momentous, putting global shipping in a precarious position and highlighting endemic issues.

When lightning doesn’t just strike once

Rather than a single lightning strike, current shipping disruption can be attributed to a barrage of unforeseen geopolitical and climatic developments. Currently, attacks by Houthi rebels are disrupting shipping in the Suez Canal, which usually accommodates roughly 12% of annual world trade and 30% of all global container traffic. Meanwhile, across the globe, an ongoing drought in the Panama Canal continues to restrict shipping capacity.

The result? Shippers are experiencing significant delays, and freight costs are skyrocketing again. For example, Transporeon data shows that container shipping prices from Asia to Europe have recently spiked by 300%. And with no end to disruption in sight, this may just be the start! But geopolitical upheaval is just one of many sources of disruption facing the European maritime transportation sector, with two important legislative changes coming into force.

Introducing the EU Emissions Trading Scheme

Designed to reduce shipping emissions by encouraging carriers to invest in sustainably-fuelled vessels, the EU Emission Trading Scheme (ETS) came into force at the start of 2024. Shipping companies are now obliged to buy permits for a portion of their emissions (gradually increasing to 100% by 2027) for all inbound, outbound and transhipment vessel movements. LNG and other ‘sustainable’ fuels are exempt from EU ETS. However, these are currently used in less than 1% of maritime transportation, and it’s likely to take decades to build capacity. So, in the short term, most carriers will view EU ETS as a ‘cost of doing business’. An extra ‘ETS/fuel surcharge’ will most likely be passed onto shippers.

The end of CBER

In April, the EU will make another significant legislative change by discontinuing the 2009 Consortia Block Exemption Regulation (CBER), which allowed shipping companies to cooperate in consortia. CBER was introduced to improve service availability and market options for shippers, intended to drive down the price of maritime transportation. However, the pandemic exposed its flaws (limited oversight and information-sharing), which allowed larger carriers to consolidate and potentially exploit loopholes. This led to higher prices and reduced service options for shippers – and ultimately to the exemption’s demise.

The full implications of ending CBER aren’t clear yet. Shipping consortia will need to carefully assess whether their current cooperation agreements are compatible with general EU antitrust rules when offering joint services or sharing slots, capacity and data. However, some speculate that we could see reduced competition (and therefore capacity). Container shipping is very capital-intensive, and there’s a high barrier for carriers to add new services to a line, particularly when collaboration is limited. However, there’s also a clear expansion opportunity for carriers who already have a strong market position.

If disruption is a given, how can shippers prepare?

Ask any shipper, and they’ll tell you that delays aren’t always inherently problematic. However, a mismatch between their expectations (i.e. the timely arrival of cargo) and reality (i.e. delays) can have serious repercussions in the form of resource misallocation and unnecessary costs. These are ultimately passed onto consumers when problems stack up – so everyone loses.

Unfortunately, ‘unexpected’ delays are far too common in maritime transportation. The problem isn’t that delays happen ‘too suddenly’ for shippers to act, but that there’s a lack of information-sharing within the industry. Shippers routinely lack regular updates on the status of their freight, and if freight has been booked via a third party, tracking information is often completely unavailable.
Maritime transportation suffers from endemic data fragmentation. For instance, to track freight, shippers currently have to ‘call’ different carriers’ APIs individually for each vessel. The technology to fix this problem already exists. In recent years, it has been widely implemented across other transportation modes – to the point where real-time visibility is now becoming standard practice for road freight.

In maritime transportation, the key to minimising disruption lies in increasing cross-industry collaboration and boosting the data maturity of shippers and carriers. Ideally, early impact identification and analysis require shippers to have access to a single source of truth with data from all carriers. Though data fragmentation can’t be fixed overnight, shippers can already implement technologies that offer improved visibility into the location of freight and enable them to predict where future disruption might occur. The bottom line? Shippers can’t control the climate. Or geopolitics. Or legislative changes. But they can control how they respond to disruption.

by Lena von Fritschen, Director Market Intelligence at Transporeon, a Trimble Company.

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Industry View: Secure Your Supply Chain Now to Beat Disruption

 

Challenges of Peak Season Logistics

Posted on by David Priestman

As the holiday shopping season rapidly approaches, shippers and carriers are yet again gearing up to tackle the formidable logistical and customer service challenges that inevitably come with peak season volumes. However, this year, their task is further complicated by ongoing supply chain disruptions all while grappling with the increasing uncertainty based on the geopolitical situation. Yet amid these challenges, customer expectations continue to soar, demanding fast, convenient, and on-time deliveries accompanied by real-time communication. To paraphrase Game of Thrones, Winter is certainly coming.

Shippers, carriers, and customers alike are no strangers to the stress involved in the months leading up to Christmas. With Black Friday, Christmas and Boxing Day sales just around the corner and unforeseen circumstances and delays, the potential for overwhelm is ever-present. However, proactive planning and more organised transportation operations can alleviate these concerns, ensuring that any potential threats to deliver a seamless peak season can be avoided.

Therefore, the need for swift and intelligent delivery solutions is more critical than ever. Transportation Management Platforms (TMP) emerge as a key enabler, allowing stakeholders to optimise delivery times, enhance agility, and streamline their sustainability and costs, all while meeting rising consumer expectations. In this article, Christian Dolderer (pictured), Head of Market Intelligence Europe Road & Intermodal at Transporeon explains why it’s vital that retailers should prepare a seamless end-to-end supply chain before the run up to 2023’s peak season.

The Beauty of Data

Shippers and carriers are facing a delicate balancing act of keeping costs down while meeting the needs of increasingly demanding consumers. An empty shelf isn’t just a lost sale for someone – it’s a reason for customers to switch to another brand. So, businesses looking to drive as much value as possible from their operations also must ensure resilience against disruptions that, according to McKinsey, are becoming increasingly frequent.

Achieving an equilibrium between value and resilience starts with digitisation. The truth is that shippers and carriers aren’t as digitised as they should be. The era of Excel spreadsheets, manual searches, and endless route and rate browsing have become relics of the past. This inefficient administration burns valuable resources and fails to deliver optimum outcomes.

Now is the time for enterprises to pivot from mere data collection and embark on the process of generating transactions with the data at their disposal. Automated, data-driven decision-making within a collaborative and interconnected network, leveraging historical patterns, real-time data, and future predictions, will enhance transportation operations and enable reactions to fluctuating customer demands and adaptations to unforeseen events, such as border closures or dangerous weather conditions.

At the same time, tapping into data will provide balance in optimising their operations. Consider a day-to-day product such as toilet rolls, which is transported from warehouses to multiple countries and hundreds – if not thousands – of locations within those countries on a near-daily basis. These transports may have to cross international borders, adapt their routes due to traffic jams or road closures, and sync up with countless other transports. The logistics involved are staggering, but data can act as the common thread that ties such a complex operation together.

By investing in a smart Transport Management Platform, carriers and shippers can unlock multiple benefits such as optimising their operations and building greater profit margins. However, achieving it requires businesses to think beyond basic automation.

We’re Better Together

At times like peak season, it is more important than ever for enterprises to unite and work together to unlock operational benefits. For example, there’s no reason for trucks to travel hundreds of empty miles when a similar truck, equipped for the task, is more than likely unloading nearby. It’s time for shippers and carriers to forge connections with one another, establish common business standards, foster collaboration and embrace a platform that facilitates network-wide interoperability.

During peak season, connecting shippers, load recipients, service providers, brokers, forwarders and asset-based carriers is integral to creating a collaborative transportation community. By adhering to common standards and promoting interoperability, all stakeholders can uncover new business opportunities while achieving economies in their operations. This spirit of collaboration will grant the transportation market resilience and agility – both critical components, as highlighted in the 33rd Annual State of Logistics (SoL) report.

Long before the holiday season, shippers and carriers must be prepared to build deeper relationships and drive collaboration with other industry stakeholders within one connected network. They must work together to realise the economic gains available. It’s also clear that only through the implementation of digital tools, automation of the decision-making processes, and the harnessing of real-time insights, can the necessary steps be taken to establish the connectivity and interoperability required to bring logistics businesses together.

How can the Logistics Industry Unlock its True Potential?

Posted on by David Priestman

Transportation and the logistics industry serves as the lifeblood of today’s modern economy, binding together businesses, streamlining supply chains, and championing eco-friendly initiatives on the path to achieving net-zero emissions. However, it also harbours the potential to disrupt these pivotal strategies if they are not managed appropriately, writes Transporeon CEO Stephan Sieber.

Nowadays, many industries have seamlessly embraced (and thrived from incorporating) digitisation into their businesses. However, transportation has seemingly lagged behind and it has been that way for some time. In fact, the lack of any meaningful evolution predates events such as the war in Ukraine, the energy crisis, and even the pandemic. Yet, these events have only highlighted the importance of seamless transportation to continue delivering goods globally. So why is it being neglected?

In the current landscape, numerous inefficiencies mar the transportation market. Idle assets, empty runs, static capacity, unwarranted waiting times, and isolated operations cast a substantial shadow on economic prosperity. In addition, the lack of investment in digitisation perpetuates administrative burdens such as manual labour overload, emotionally driven decision-making and a scarcity of actionable insights. And, compounding these issues is the looming ecological threat of untracked and unrestrained CO2 emissions. At both micro and macro levels, there’s no denying that transportation appears sluggish in adapting to the demands of our reality.

However, it’s not all bad news and there are an array of solutions available to help reverse this trend. For instance, synchronising transportation with the world by leveraging digital solutions to usher in efficiencies that positively impact the economy, businesses, and the environment can continue to thrive. This transformation of transportation hinges on three fundamental components…

Enterprises must unite and work stronger together to unlock operational benefits. For example, there’s no reason for trucks to travel hundreds of empty miles when a similar truck, equipped for the task, is more than likely unloading nearby. It’s time for shippers and carriers to forge connections with one another, establish common business standards, foster collaboration and embrace a platform that facilitates network-wide interoperability.

Connecting shippers, load recipients, service providers, brokers, forwarders and asset-based carriers is integral to creating a collaborative transportation community. By adhering to common standards and promoting interoperability, all stakeholders can uncover new business opportunities while achieving economies in their operations. This spirit of collaboration will grant the transportation market the resilience and agility – both critical components, as highlighted in the 33rd Annual State of Logistics (SoL) report.

The era of Excel spreadsheets, manual searches, and endless route and rate browsing have become now relics of the past. This inefficient administrative burden is burning through valuable resources and failing to deliver optimum outcomes. Now is the time for enterprises to pivot from mere data collection and embark on the process of generating transactions with the data at their disposal. Automated, data-driven decision-making within a collaborative and interconnected network, leveraging historical patterns, real-time data, and future predictions, will enhance transportation operations.

Finally, in the logistics business, having real time insights are vital to success. This allows the business to control multiple ongoing operations, whether that entails monitoring CO2 emissions, accessing spot rates, evaluating capacity, or receiving transport ETAs. Equipped with these real-time insights and the ability to act upon them, logistics companies can anticipate future developments, swiftly address issues, and assert control over operational efficiency.

The past two years witnessed a rush for outcomes at nearly any price, a trend likely driven by necessity rather than desire. Nevertheless, this approach threatens the industry’s sustainability unless addressed.

In conclusion, synchronising transportation with the world requires a shift in approach and mindset – a challenge which spans the entire industry. It’s clear that only through the implementation of digital tools, adoption of a culture of collaboration, automation of the decision-making processes, and the harnessing of real-time insights, can the necessary steps be taken in establishing the connectivity and interoperability required to bring logistics businesses together. The time for change and digitisation is upon us and companies should look to modernise their infrastructure or risk getting left behind.

Transporeon Launches Freight Marketplace

Posted on by David Priestman

Transporeon, a leading Transportation Management Platform and a Trimble Company, announced today the launch of Freight Marketplace, a neutral (of equal benefit to both shippers and carriers) deal-making hub for freight procurement.

Both buyers and sellers of transportation services face ongoing challenges in aligning capacity and assessing fair pricing. In addition, insufficient transparency and fragmented systems can lead to low relevance on carrier tender invitations and inefficient alignment with shippers’ service preferences. Negotiating efficiently and fairly is also a challenge due to the lack of standardised data sets, which hinder like-for-like comparisons and make it difficult to consider factors beyond price, such as sustainability and service levels.

Transporeon’s Freight Marketplace addresses these challenges head-on with a new solution designed to transform logistics procurement and redefine how companies buy, sell, negotiate and contract. Its key benefits include:

● A central location for deal-making: Freight Marketplace unites carriers and shippers ‘under one roof’ to do business based on their specific needs, capabilities and requirements. It taps into Transporeon’s extensive network of 1,400+ shippers and 158,000+ carriers for instant scale, creating a definitive catalogue of buyers and sellers.
● Simplified negotiations: Freight Marketplace uses advanced algorithms to simplify negotiations and optimise the procurement process.
● Multi-dimensional negotiations that factor in sustainability: Negotiations between shippers and carriers often focus solely on price, disregarding other factors such as volume, lead time and sustainability. Freight Marketplace solves this challenge, enabling shippers and carriers to factor pricing, volume, CO2 emissions and more into negotiations. Buyers can prioritise low-emission options, while sellers have a platform to showcase their efforts in reducing emissions.
● Enhanced visibility and transparency: Freight Marketplace allows logistics providers to build comprehensive profiles that include their expertise, services, performance metrics and fleet data. To establish transparency, it blends self-declared facts with third-party verified information and real-world insights from the Transporeon platform. Shippers have similar profiles, enabling both parties to search for partners that precisely match their specific requirements, ensuring a smooth matchmaking process.

Platform neutrality

Freight Marketplace drives value for both buyers and sellers through neutrality, ensuring an environment where all players can benefit equally:
● Buyers benefit from pre-structured, standardised data that simplifies finding new partners through high-quality profiles. Freight Marketplace makes it easy to access fair pricing and optimise decisions based on other factors such as volume, lead time, and sustainability.
● Sellers gain access to a broader range of shippers and mini tenders, allowing them to win new business. Since every event is structured the same way, sellers can also evaluate opportunities more efficiently, meaning they no longer need to decipher shipper-specific jargon or endless Excel table names.

Stephan Sieber, CEO at Transporeon, said: “Finding reliable partners, aligning capacity and securing fair agreements is a long-standing industry challenge. That’s why we built Freight Marketplace to take freight procurement to the next level. At its core, our new solution is a one-stop shop for deal-making, empowering buyers and sellers alike to connect, negotiate and close new business. This is supported by advanced algorithms, full transparency and a focus on sustainability.”

Data Everywhere: AI in Logistics

Posted on by David Priestman

Most shippers, carriers and logistics service providers understand the importance of data collection and data-driven decision-making. Data collected over time provides intelligence, enabling companies to enhance long-term decision-making. Meanwhile, real-time data can be used to make smart split-second decisions – like how to correct or replan when problems occur.

Artificial intelligence is a potent tool that helps companies get the most from their data. This takes several forms. “Statistical AI” enables users to analyse huge quantities of information to find hidden patterns and make smart decisions. Meanwhile, companies can use past data to programme “symbolic AI” models, which can be used for “purpose-seeking” applications, such as process optimisation. Jonah Mcintire (pictured), Chief Network Officer at Transporeon, A Trimble Company, explores further.

Automation vs. AI – understanding the difference

Automation and AI are often spoken about in the same breath, as if they are synonymous. However, though they’re interlinked, there’s an important distinction between the two. Automation involves delegating mundane, often administrative, tasks to software. It’s clerical. On the other hand, true AI involves handing over decision-making power. Software is given set parameters, but it will use them to draw unexpected conclusions. Users can give AI varying degrees of freedom. A more cautious approach is to allow software to calculate options and make recommendations for a human to approve. However, it’s also possible for it to reach conclusions and make decisions autonomously, without even informing a human.

So, where can AI in logistics transportation have the most impact? The short answer is ‘everywhere’. In fact, forward-thinking shippers, carriers and logistics service providers are already integrating AI into their tech stacks.

There are a few considerations to keep in mind. AI is best used for decisions with concrete financial values that are easy to score and have discrete, well-known variables. Fast decision-making cycles are also important. Like humans, AI learns from experimentation. So, if a decision is only made annually, it will take decades for the software to gather enough data to get feedback. Realistically, you want AI models to analyse thousands of decisions per day. Ideally, players would use models trained not just with their own data, but with data gathered from across the industry. This collaborative (also known as “platform”) approach enables everyone to get ahead.

So, how AI can transform how companies utilise their data through autonomous procurement, real-time ETA tools and decarbonisation?

Real-time ETA tools

The disconnect between shippers and carriers has long been a challenge in the logistics transportation industry. To enhance visibility, transparency and efficiency, we need to connect load receivers and load givers. For example, predicting arrival times for loads has traditionally been a pain point for both shippers and carriers. Common causes of delay – like strikes, traffic jams and mechanical difficulties – can seem completely random to the human eye. But when an AI model analyses years’ worth of this data, hidden patterns do emerge. Typically – unless circumstances are truly unprecedented – AI is much better at predicting ETAs and with the help of an AI-assisted real-time ETA tool, companies can ensure they’re prepared to receive loads whenever they arrive.

Automating procurement and quotation

Spot buying is a perfect use case for symbolic AI, as companies have a set budget and clear constraints around lead times and carrier types. Beyond this, the structure of negotiations is relatively simple – participants can make an offer, wait for a response, make a counteroffer, accept an offer, or end a negotiation. This makes it easy for software to pursue its goals independently, saving thousands of manual administrative hours.

This is just one example. In the procurement space, statistical AI can also revolutionise tendering by using huge quantities of data to predict pricing. For example, instead of asking carriers to bid on a load tender, AI can present said tender – and a pricing offer – to a select number of carriers. If no carrier accepts the tendered load at the offered price, the AI can initiate additional tendering rounds as needed.

AI can also have a transformative effect for sellers of logistics services, enabling them to automatically serve customers with instant, accurate pricing for spot transports based on predicted market rates. With this ability, load takers can increase the volume of opportunities they quote for and ultimately win more new business.

Decarbonisation

The logistics transportation sector is under pressure to slash its carbon emissions. End-user customers are leaning on shippers to decarbonise. Meanwhile, shippers are putting the same pressure on carriers by contracting them based on their sustainability practices, offering longer freight contracts to environmentally responsible carriers, and even paying a premium for lower carbon transport.

With sustainability now affecting the bottom line, it’s no surprise that decarbonisation is rising to the top of the agenda for both shippers and carriers. So, how can AI help with all this? The first thing to emphasise is that – unlike procurement – there’s often no single ‘right’ answer when it comes to sustainability. Companies may have differing ideas of the optimum strategy, carefully balancing ‘cost vs. emissions’ or ‘certainty vs. emissions’. However, once shippers, carriers and logistics service providers have decided on their risk appetite, AI can play a crucial role in helping them stick to their goals.

Companies typically adopt one of two mentalities. The first is a cap-and-trade strategy, where the company decides that it won’t tolerate more than X emissions. The second is a carbon tax, where a company decides to offset its emissions. For both of these strategies, shippers and carriers can factor ‘price per ton of emissions’ into procurement events. Statistical AI can be a helpful decision-making tool. For example, when deciding which mode of transportation should be used for each shipment.

The future of AI in logistics transportation is collaborative

We’re at an important inflection point in the use of AI in logistics transportation. It’s poised to slash administrative work and help companies become more efficient and sustainable. But achieving this depends on effective data gathering and sharing. This is where cooperation between industry players comes in. To maximise positive outcomes for everyone, shippers, carriers and logistics service providers need collaborative digital platforms to share data to feed AI models. Looking ahead with this approach, we can significantly accelerate our progress towards reaching the industry’s digitalisation and decarbonisation goals.

How to Unlock Value of Data-driven Logistics

Posted on by David Priestman

The ability to tap into data is critical to business success – from predicting sales trends to improving operations and customer service, writes Stephan Sieber (pictured), CEO at Transporeon. This gives companies the insights they need to outperform the competition, and today’s business leaders clearly recognise the value of data.

However, these game-changing insights are elusive for many companies, with 58% of organisations basing at least half of their regular business decisions on gut feel rather than on data and information. ‘Laggard’ companies base 70% of their decisions on gut feel, while ‘best-in-class’ companies base 60% of their decisions on relevant information.

In the logistics industry specifically, the ripple effects of the last few years – and the ongoing recovery – across supply chain processes have clearly revealed the urgent need for organisations to embrace a data-driven culture. It’s not enough to just have access to data. Data must become a central component of logistics operations, built into the fabric of the business.

The journey to being data driven

Aside from the cultural shift required, one of the biggest industry challenges associated with data-based decision making has been aggregating data from many disparate systems. Logistics practitioners highlight this as the biggest factor inhibiting their ability to convert data into actionable insights, followed by a lack of trained analysts and poor data quality.

The good news is that supply chain businesses recognise the need to leverage real-time data across their operations. And as a result, having accurate ETAs on transports is essential to managing supply chains and operations more efficiently. However, there’s a significant difference between just seeing what’s happening and being able to instantaneously use that information in an impactful way.

This is where a modern transportation management platform comes into play. Integrating different elements of the supply chain into an intelligent platform will serve as the backbone for data-driven decision making in large transportation networks. This approach can also connect shippers, carriers, logistics service providers and other stakeholders, enabling them to communicate, share data, and make smarter decisions based on a larger pool of data.

The more stakeholders that participate in the network, the more data that can be generated and analysed to deliver business value – from optimising loading and unloading through smart slot management, to scaling operations and cutting emissions. So, in 2023 and beyond, how do businesses get the most out of their transportation management data and transform their operations like never before?

Unlocking data value

The power of bringing key services and tools together in one comprehensive platform is that it delivers insights along the 360-degree lifecycle of a freight transaction. Having access to this data can provide several benefits, such as the ability to analyse market performance. With multiple stakeholders connected to a single platform, processing millions of real-time transactions annually, a network-based transportation management platform can help businesses benchmark their performance against the market.

Businesses must contextualise the data being collected by aligning it with clearly defined Key Performance Indicators (KPIs) linked to desired outcomes and business objectives. In the transportation realm, common KPIs include on-time delivery, on-time arrival, transportation spend by mode, lead times, and tender acceptance rate. These KPIs can then be compared to external network-wide benchmarks to help organisations see how they are performing relative to the market.

But the true value of being data-driven comes when businesses layer artificial intelligence, machine learning and visualisation tools on top of the data. This unlocks new insights about the businesses’ operations and generates recommendations on how to strive forward smarter. This could include: monitoring industry-wide freight spend and tender rates to optimise their freight procurement process; using AI-powered smart tendering to enable autonomous tendering; or analysing network-wide capacity information to reduce empty miles.

By choosing a modern, intelligent transportation management platform as the foundation of a connected network that prioritises real-time data, companies can unlock the insights that help them reduce costs and carbon emissions while improving service, mitigating risks, and much more. They can finally make smarter decisions based on actual data, not gut feeling.

Why FMCG Supply Chains are about Balance

Posted on by David Priestman

FMCG Supply Chains are delicate things, writes Tim Bruun (pictured), Head of Customer Management – Retail & FMCG at Transporeon.

Transporting day to day goods like food and toiletries has always come with challenges and pressures and having items that are daily necessities for millions of people around the world and must be available at all times is a given. I’m sure we all remember the drama when toilet roll shortages swept across Europe during the height of the pandemic.

However, when analysing the current state of the market, we can see two distinct trends. On the one hand, the market is softening and the capacity crunch is reducing after tightening in 2021 and the first half of 2022. Indeed, the future prognosis for the global FMCG market is generally positive. It is predicted to grow by €284.4 billion by 2026, largely due to the growing preference for eCommerce online distribution.

However, at the same time, impending recession and rising inflation is causing production demand to drop and prices to rise. Consumer goods companies are now dealing with billions in additional costs, thanks to rising prices for raw materials and transportation. These are generally higher for FMCG products, due to specific temperature and humidity requirements.

This is likely to continue throughout 2023. But, the big question is, what does it all mean for businesses in terms of driving future growth and success?

In the balance

With these trends in mind, FMCG businesses are facing a delicate balancing act of keeping costs down while meeting the needs of increasingly demanding consumers who have considerable purchasing power. An empty shelf isn’t just a lost sale for someone – it’s a reason for customers to switch to another brand.

Those involved in FMCG supply chains are also looking to drive as much value as possible from their operations yet ensure resilience against disruptions that, according to McKinsey, are becoming ever more frequent. How well FMCG suppliers achieve this balance will determine their success in 2023 and beyond.

Achieving an equilibrium between value and resilience starts with digitisation. The truth is that FMCG logistics aren’t as digitised as they should be. They still rely on plenty of paper-based processes that cause inefficiencies. The good news is there’s a drive within the industry to replace them with e-documents and digital processes.

Additional value can also be realised by implementing automation to save time on elements such as time slot and yard management processes. As a result, FMCG businesses will be able to streamline and enhance their tactical activities, which is crucial since millions of people worldwide depend on FMCG supply chains every day, as well as the time-sensitive storage and consumption windows for many perishable products – some of which are only available for a short period of time.

Embracing a digital-first mindset will empower FMCG businesses to deliver the speed and convenience that consumers are looking for, while optimising their operations and building greater profit margins. At the same time, it will provide resilience by making it easier to adapt to disruption. A lack of resilience can be fatal for modern FMCG brands, but achieving it requires businesses to think beyond basic automation by focusing on data and relationships.

Realising FMCG 2.0

The only way FMCG businesses can truly ensure resilience is by enhancing their ability to execute on market and operational insights. This is what will enable them to react to fluctuating customer demands and adapt to unforeseen events such as border closures or dangerous weather conditions. With the right data at their fingertips, businesses will be able to make more data informed decisions in a timely fashion – relying on actionable insights rather than gut feel – and build optionality into their operations.

At the same time, tapping into data is what will provide balance in terms of optimising their operations. Consider a day to day product such as toilet rolls which is transported from warehouses to multiple countries and hundreds – if not thousands – of locations within those countries on a near-daily basis. These transports may have to cross international borders, adapt their routes due to traffic jams or road closures, and sync up with countless other transports. The logistics involved are staggering, but data can act as the common thread that ties such a complex operation together.

In order to succeed, businesses within the FMCG supply chain must be prepared to build deeper relationships and drive collaboration with other industry stakeholders within one connected network. They must work together to realise the economic gains available. For example, there’s no need for a truck to drive hundreds of empty miles to pick up a load when another may be unloading nearby.

A deeper collaboration through a common platform can provide the balance that is essential – whether that’s by increasing resiliency, providing wider access to market data, reducing costs, or enabling more sustainable supply chains.

Ultimately, the goal of any FMCG stakeholder is to ensure that products make it to customers on time, every time. The key is to maintain the flow of goods, no matter what challenges come their way. And, like any ecosystem, the world of FMCG transportation is all about balance. Taking a digital-first approach driven by data and relationships will help FMCG businesses balance their operations in a way that drives sustained success.

Driver Shortage isn’t just Personnel Problem

Posted on by David Priestman

It’s no secret that global supply chain disruption has dominated headlines since mid-2020, writes Stephan Sieber (pictured), CEO of Transporeon. And, over the past three years, the continuing aftershocks of the COVID pandemic, combined with geopolitical factors and an economic downturn, have caused significant upheaval for shippers, cargo receivers, service providers, brokers, freight forwarders, carriers – and of course consumers.

Today, driver shortages in the road freight sector are threatening to cause further disruption. Catalysed by initial pandemic downtime – which saw many drivers leave the industry, take early retirement or extended sick leave – driver shortages are now a significant strain on supply chains. Especially given rising demand for road freight transportation.

A recent report by the world road transport body IRU revealed that there could be an eye watering two million unfilled driving positions in Europe by 2026 (already now there are around half a million unfilled positions in Europe).

In the UK, a drop in migration from Central and Eastern Europe caused by Brexit has further highlighted driver shortages where, according to the French transportation union FO Transports, the number of driving vacancies in France could currently be as high as 50,000. The situation is even worse in neighbouring countries where there are currently around 80,000 vacant driving positions in both Germany and Poland (IRU).

Transforming the ‘Great Retirement’ into greater opportunities

With a global recession looming, it’s widely believed that we’ll soon see an influx of candidates onto the job market. Though this may ease personnel shortages in some sectors, it’s unlikely to solve road freight driver shortages.

The primary reasons for this are demographic shifts leading to the ‘Great Retirement’. The same IRU report found that 30% of drivers are planning to retire by 2026 – outstripping any potential recession-related increases in driver availability. So, it’s clear that simply poaching drivers from elsewhere in the industry isn’t a long-term solution for companies.

The IRU also found that young people are joining the driver community in the road freight industry at a rate between four and seven times lower than drivers are retiring – with the average age for European drivers now over 50 years old.

Twentieth-century approaches won’t solve a twenty-first-century problem

The bottom line is that the European driver shortage is not just a personnel problem. Dwindling driver numbers would not present such a challenge if transport operations were smarter and more efficient. According to scientists at the MIT Center for Transportation and Logistics, increasing the efficiency of US drivers by just 18 more minutes of active driving time per day could solve the country’s driver shortage. This claim was based on research in the US but pointed out that the same principle is likely to apply in Europe.

There’s a multitude of ways that companies can look to boost efficiency. But to do so, they must first understand where there’s room for improvement. More are now turning to solutions that offer real-time insights. This helps companies to uncover previously hidden inefficiencies (like empty runs and excessive waiting times in yards) and improve visibility by tracing deliveries.

Within the logistics industry, another trend we’re seeing is Autonomous Case-handling Robot systems (ACR) to reduce labour needs. Self-driving trucks are still a long way off in logistics transportation, but it is possible to make significant efficiencies within warehouses in loading and unloading processes, as well as automating time slot and yard management processes. But by implementing smart software, businesses can start to look to reduce waiting times for drivers from hours to minutes.

Ultimately though, enhancing the effectiveness of transport logistics depends on increasing collaboration between all participants, rather than companies simply working to optimise its own performance – as is currently often the case. Indeed, a recent survey of international supply chain experts revealed that the vast majority rate ‘increased collaboration between supply chain partners’ as both ‘highly probable’ and ‘highly desirable’ in the run-up to 2025.

When working collaboratively as part of a wider network, rather than in isolation, organisations can significantly streamline key processes such as freight sourcing, transport execution, dock scheduling, freight matching, payment and settlement.

Solving the UK and Europe’s road freight driver shortage can’t be done overnight. And, moving forward, companies should view this as an operational matter, rather than simply an HR or personnel problem. The solution lies in adopting a network approach and collaborative solutions that focus on finding new efficiencies.

With the unique approach of combining automation, real-time insight, and collaboration, a transportation management platform can alleviate the driver shortage, reducing empty miles, eliminating unnecessary dwell times and optimising yard operations – the integral intersection between the road and the warehouse.

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