‘Datafication’ will drive transformation in transport and logistics in 2023

‘Datafication’ will drive transformation in transport and logistics in 2023

digital transformation

Looking ahead to this year, it is from the position of continuous volatility the past twelve months have brought. Transportation and logistics companies, still in COVID recovery mode, face a number of challenges as external factors combine to ensure the road ahead is anything but smooth. Both industries are experiencing a fierce combination of disruption and transformation, with exciting innovations beginning to deliver on their potential.

We are already seeing the incredible potential of data-focused digital transformation to revolutionize how transport and logistics companies operate. Successful “datafication” will enable companies to absorb some of the shock waves of ongoing disruption that will plague the sector in the coming year and enable them to begin to realize the potential that digital transformation can bring.

With all this in mind, what are the main trends that will shape the movement of people and things in the coming year?

Here are five areas we expect to see advanced data use impact transport and logistics companies in 2023:

1. Macroeconomic factors will accelerate the need for digital transformation in the logistics sector. Persistently high fuel costs will have the greatest impact on the logistics sector in 2023, exacerbating already difficult operating conditions. This will drive a need for greater efficiency across the board and means businesses will need to seek productivity gains in an attempt to offset high fuel prices and to continue operating. Investing in digital transformation, especially solutions that capture and manage real-time, high-quality data from multiple sources, can help businesses unlock efficiencies and adapt operations quickly to prevailing conditions.

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2. Data agility will drive innovation as the rollout of electrification and automation continues. As a general trend, the effective collection, analysis, management and application of data will drive diverse use cases, covering everything from route planning and needs analysis to companies’ ability to integrate with the wider transport and logistics ecosystem. The sheer amount of data being generated is daunting for most organisations, and turning this into actionable data is critical.

As electrification continues to roll out across road, rail, air and sea transport, huge amounts of data will be generated. This needs to be managed, analyzed and shared to optimize performance and customer service. It must also be seamlessly incorporated into existing systems.

Organizations using legacy technology will struggle to extract data from silos, or in some cases will not have it available at all. This will highlight the need for solutions that work with legacy technology, but also unlock the power of data in the business, making it more accessible and agile to drive modern use cases and inform decision making.

3. The introduction of Mobility-as-a-Service (MaaS) will continue. MaaS offers new solutions for personal mobility using a mix of public and third-party transport options brought together in a single user interface that simplifies end-to-end travel planning and payment. The ideal of being able to plan and manage a seamless multimodal journey is much more complex in reality.

MaaS will be more in demand as disruptions across public transport networks cause frustration and people seek alternative options.

In addition, increasing public awareness of sustainability, combined with rising costs of driving private vehicles, will also see travelers looking for greener and cheaper transport solutions. Transportation providers must ensure they can provide the right level and sophistication of data to MaaS applications or risk being left out of the personal mobility loop.

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4. The last mile competition is escalating. Logistics companies have been trying to solve the costly last mile for decades, but the rise of omnichannel customer choice and greater competition means they must become increasingly flexible. Retailers facing recession will seek last-mile innovations that serve customer preferences while keeping costs under control as fuel and personnel costs become increasingly unpredictable.

While there will be a focus on moving to electric vehicles or even drone deliveries, solutions such as crowdsourcing private couriers through Uber-style apps and setting up neighborhood collection points are just two options, and we’ll see more ideas forming. Advanced data availability and real-time analytics will be essential for logistics providers to ensure they know where goods are, what delivery options are available to them and what costs they may incur.

5. Supply chain disruptions will drive innovation in the logistics sector. Shipping disruptions are set to continue well into 2023 due to the war in Ukraine and the ongoing Covid situation in China, which affects supply chains and continues to create bottlenecks. These problems – which can become endemic – need solutions such as agile alternative routing and advanced inventory strategies to minimize the amount of disruption customers experience.

Companies need greater visibility and control over logistics flows and the ability to share this information with stakeholders in the product journey. Consequently, data availability and analytics capabilities are essential to enable logistics companies to adjust processes in real-time to minimize costs and speed deliveries.

Unlocking data to release its full potential will be central to the development of the transport and logistics sector in the coming year, but it will not be without challenges. Legacy technology, silos, and the inability to open proprietary data to third parties can all act as blockers. By building data platforms that work with legacy systems, companies can remove the risk associated with rip-and-replace projects while evolving into more adaptive, responsive businesses that today’s volatile environment demands.

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Image credit: Robert Kneschke/Shutterstock

Kirstie van Oerle is partner, Netcompany.

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