- Drone Delivery Service
- Transport and Logistics Innovation
Advanced Technologies Are Disrupting Transport and Logistics Business Models
A diverse set of suppliers in the transport and logistics ecosystem are developing and deploying innovative technologies to make shipping more flexible, efficient, and sustainable as the industry continues to grow. As a result, some traditional business models are being disrupted (e.g., freight brokerage) and others are likely to be completely upended (e.g., last-mile logistics) over the next few decades.
Smart Logistics Platforms Are Transforming Freight Brokerage
Over the past few years, an array of companies has emerged to provide real-time freight booking and pricing services that can improve efficiency and lower labor and material costs in procurement. Recently launched apps and services such as Uber Freight, Convoy, Transfix, DashHaul, and Cargomatic are connecting shippers and carriers through smart logistics platforms. Shippers can view available trucks and third-party logistics providers nearby and can book directly with the click of a button instead of going through a lengthy brokerage process over the phone. Carriers can more easily locate new freight capacity.
While these services are called a variety of names in the industry, including smart logistics platforms, digital freight matching, on-demand trucking, or the Uberization of freight, the companies have one thing in common—they are transforming the speed and way in which freight is brokered. Logistics platforms have enabled the freight booking market to move more efficiently, removing wasted time on the booking process and getting trucks to the right load more quickly. Navigant Research expects the adoption of logistics platforms in the industry to increase as mobile applications, freight pricing, and matching algorithms become more sophisticated and convenient for users over time. Platforms that can easily integrate automated commercial vehicle technology will be best positioned to succeed in the long term.
Delivery Bots and Drones Could Upend Last Mile Logistics
As a result of rising labor costs, many shippers and carriers are experimenting with technologies that reduce driver miles, such as delivery robots and drones. According to UPS, a reduction of just one driver mile a day can save up to $50 million annually (UPS has about 66,000 drivers on the road every day). These disruptive technologies could transform the traditional shipping market by delivering products faster, cheaper, and more efficiently than ever before—potentially leading to significant growth in retailer revenue.
Delivery bots and drones present a compelling opportunity not only to increase profitability for suppliers but also to substantially lower carbon emissions and road congestion while satisfying increasing customer requirements for on-demand and hyperlocal delivery. These technologies could revolutionize the way high priority goods such as medical supplies and food are delivered. Both technologies are far smaller than trucks, more flexible in urban environments, and are naturally suitable for automation and electrification.
Logistics Suppliers Need to Be Ready for Disruption
The transport and logistics market has entered into a period of technological transformation. Logistics companies need to be agile and prepared to adjust their business models to rapidly shifting market conditions. For more analysis on the advanced transport and logistics market, see Navigant Research’s upcoming 3Q 2019 report: Transport and Logistics Innovations Overview.