Cargo trucks have been a common sight on roads around the globe for decades. But while logistics technology has advanced drastically over the years, the trucking sector remained largely untouched until very recently. Due to its dependence on manual drivers and operations, the industry has struggled to overcome major inefficiencies: Excessive paperwork, long waits at distribution centers, running empty trucks, to name a few.
Air cargo: Don’t think of it as the “little brother” to passenger planes. While the industry may be in the shadow of passenger airlines or maritime logistics, the rapid rise of e-commerce has seen air cargo grow in size and importance over the past few years. The industry accounts for an average of 51.2 million tonnes being moved every year, and that number is only increasing.
According to the International Air Transport Association (IATA), air cargo demand grew by 3.5 percent in 2018 as measured by freight-tonne kilometers, and the IATA’s latest Business Confidence Survey said airlines expect freight volumes to continue increasing in 2019. Demand is such that Boeing is increasing production of the Boeing 767 Freighter to three airplanes per month in 2020 – their third rate-hike on the model, which represents a doubling of production since 2016. Not only are traditional air cargo methods increasing, but NASA is also estimating that there will be 2.6 million commercial drones in the skies by 2020.
Air cargo is innovating and moving ahead rapidly, but it should be noted that it is still by far the most expensive method of shipping: Air cargo accounts for just 1 percent of global shipping by volume but 35 percent of it by cost. Startups in this space are always devising new ways to combat such costs and boost efficiency for the benefit of both the consumer and the logistics/transport company.
Maritime shipping: it’s the quiet achiever of transport. After the revolutionary introduction of containerization by Malcolm McLean back in 1956, the industry was completely transformed. While it once took up to two whole weeks just to load and unload containers off a ship, piece by piece, the implementation of containerization not only has saved a huge amount of time when loading and unloading shipments, but it has also had an incredible impact on our global access to affordable goods: consumers may be surprised to learn that roughly 90 percent of everything we buy arrives by ship. As the quantity of goods carried by containers has risen from around 102 million metric tons in 1980 to about 1.83 billion metric tons in 2017, our current state of intercontinental trade, bulk transport of raw materials, and the imports/exports of affordable food and manufactured goods would simply not be possible without maritime shipping.
However, the industry is at a pivotal moment of change: Seeking economies of scale and lower unit costs, carriers are deploying bigger and bigger ships, already with capacities of over 21,000 TEUs (twenty-foot equivalent units). In addition, 2018 trade tensions between the U.S. and China, the world’s two largest economies, and the Global Sulphur Cap regulation by IMO set to go into effect in 2020 have also sent the maritime industry into a frenzy as they look for ways to cut costs during this uncertain period.
To address these issues, maritime logistics startups are using innovative tools like digital platforms, predictive analytics, fuel efficiency solutions, and others to help companies optimize their operations and cut costs during this crucial time, ensuring that more goods are received in a more efficient way.
Robots, automation, computation, wearables: warehouses are no longer big storage spaces. Technology has invaded the warehouse to significantly improve efficiency and speed, and it was only a matter of time. Think about it: online spending is up 15.9 percent year-on-year. That is many more orders and fulfilments, and gigantic operations such as Amazon or DHL would simply not be possible without smart, tech-based techniques.
Warehousing is the act of storing goods that will be sold or distributed later, and several major elements of this important supply chain step can be disrupted by technology. The first obviously, is robotics. Along with humans, it is also robots roaming around distribution and fulfillment centers. Including automated conveyors and equipment that assists staff with faster fulfillment processes, robotics is fundamentally changing the way warehouses operate. The second big element is how the warehouse space is distributed – it should be easy for everyone to access it and this is where on-demand warehousing comes into play.
However, there are many more ways technology can improve the operations in warehouses. Machine vision, wearables, and smart platforms can enhance the work experience while also bringing safety and helping employees to take more proactive and data-driven actions.
Logistics of the Future: Best Last-Mile Delivery Startups
This article is part of the “Logistics of the Future” series, where we look at the best logistics startups today.
It is the last step in the supply chain but likely the most important: last-mile delivery. Delivery from the transport hub to the shipment’s final destination has become one of the major focus points for logistics companies as more and more people head online to buy their goods. In fact, e-commerce is expected to hit $1.35 billion in sales by 2018, an increase of 28.8 percent from 2013. Quick delivery direct to door is no longer something that is “nice to have”, it is a customer expectation. But meeting such expectations has become an expensive operation with last-mile delivery comprising more than 50 percent of total shipping costs. People want their goods and they want them now.
Thankfully, there are many logistics companies worldwide who are working to streamline this process using the latest tech and methodology. Forget about the postman coming to your door, these last-mile delivery startups are rethinking the last step in the supply chain to include drones, electric vehicles, robots, driverless cars and more. Smart solutions are the way forward.