How Real-Time Freight Operations Are Transforming Logistics

In the past, freight shippers were often obliged to become heavily involved with the spot market to get their freight shipped, especially when existing capacity became strained and could not meet the demand for getting their products shipped. The problem with such reliance on the spot market is twofold: first, it is not completely reliable, and second, it generally strains the budget of any shipper, since pricing is always very high.

In the near future, it appears that real-time freight operations will relieve this issue, and make it possible to acquire affordable shipping which is much more efficient and responsive to customer needs. In short, the transport and logistics industry may be poised to undergo a complete transformation, and these changes are already beginning to be adopted.

Real-time freight operations

The beauty of real-time freight operations is that they will enable shippers to have guaranteed rates, and to book freight loads instantly, all without ever having to send an email or even make a phone call to set it up. Even better, shippers can be confident that pricing on those shipments will be a competitive reflection of the current market rates for shipping, and that service will remain consistent and reliable. If there is a caveat to this terrific-sounding scenario, it’s that widespread adoption of real-time freight operations will only be adopted at a painfully slow rate, as shippers gain confidence in this new way of managing logistics and their supply chains.

The old way vs. the new way

Requests For Proposals (RFP’s) have traditionally been based on forecasts for the following year for shipping volumes, lanes, and rates. The problem with this has always been that the forecasts have been made by scheduling and planning tools that are entirely separate from the bidding process. This has caused a huge element of uncertainty to be built right into the process, and that uncertainty is generally reflected in the bidding done by carriers, who can’t guarantee that capacity will be available for shipping when the time to move a load actually comes. In the past, this has resulted in inaccurate rates, as well as the possibility that a carrier might have to abandon a contracted bid for lack of capacity. Needless to say, this kind of scenario can wreak havoc on a shipper, who suddenly has the rug pulled right out from under her.

The obvious solution is to have pricing and shipping commitments generated in real-time, instantaneously, so that planners can make better decisions regarding distribution, inventory, capacity, and replenishment. The end result of that improved decision-making is that service would become more reliable and contracts would become far more certain. When real-time freight technology becomes more widespread, shippers will have a great deal more flexibility, and a whole lot more insight into prevailing market rates and capacity, not to mention savings on rates which may have soared on the spot market.

How technology will enable real-time freight operations

There are a number of ways how technology is already helping to enable real-time freight operations, and as this technology becomes more thoroughly embraced and implemented throughout the supply chain, logistics services in the freight industry will become much more reliable and consistent.

One of the ways that technology is assisting is in this area is the use of self-driving vehicles. Originally developed for passenger vehicles, this technology has spilled over into the trucking industry to help solve the critical shortage of truck drivers. One such company is Starsky Robotics is currently hard at work developing a reliable self-driving system for heavy-duty trucks as well as many of the traditional OEM’s.

There are also robotic devices and machines being developed and improved for use in fulfillment centers and warehouses to solve labor shortages and improve efficiency, with regard to automated forklifts, wearable technology, and robots. This is an important piece of the logistics picture, which will help speed up operations at such distribution centers and warehouses so that bottlenecks are less likely to occur which slow the shipping process.

Another area where technology will provide a big boost to the freight industry is in the area of dispatch operations. Whenever it’s necessary to create shipment orders by making a phone call or sending a fax to someone, inefficiency creeps into the picture, and on top of that, it hampers tracking visibility for any order created. Digitizing the creation of orders will remove the need for manual and time killing processes like phone calls, and provide a much better system of tracking and tracking so that the progress, temperature or condition of any load can be quickly monitored.

Online marketplaces are already available to freight shippers where they can find assets that are currently under-utilized, so they can connect with select carriers to accomplish needed transportation services. Digitization is enabling these connections to occur much more frequently so that carriers such as CargoX and Convoy can provide a platform for increased shipping services, so shippers can discover these available services.

Obstacles to real-time freight operations

There is no doubt that widespread digitization is both possible and realistic in the logistics and freight industry, and there is little doubt when it will happen it will be a huge boon to both carriers and shippers. However, the implementation of this technology across the entire supply chain will not happen overnight, as you might expect. There are several companies already committed to the implementation of an end-to-end solution, which would consolidate information from a number of different sources into a single highly functional and useful platform, which would bring enormous value to all. Elementum and Turvo are two such companies developing such robust platforms, which can be used at all points in the supply chain.

Another large obstacle to digitization is the cost of implementing it at some distribution centers and warehouses where robotics could make a big difference. It would be necessary to install sensors and wireless connectivity capabilities at such installations, and that means any given warehouse might have to be completely retro-fitted or reconfigured. This could be a significant cost for such centers, so it would probably not be accomplished very quickly.

Whenever the possibility of introducing more technology comes up, the next question almost always revolves around cyber-security. When digitization is fully introduced across the supply chain, it will become an inviting target for cyber-criminals and hackers who are bent on disrupting technology for their own profit and benefit. This means that any digital solution adopted must include protection against this possibility, or the results may become catastrophic to both shippers and carriers.

It’s clear that there are some obstacles which stand in the way of the general adoption of real-time freight operations, and that these will have to be overcome before the supply chain industry can enjoy the benefits of it. However, when all the hindrances are finally managed, the tantalizing prospect of better freight service, more reliable rates, and better decision-making will be within the grasp of all shippers and carriers that will drive down costs and speed up service.

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