Global logistics costs amount to 10% of GDP — that is, about $7T, a huge total indeed. If to compare this sum — America’s GDP in 2016 was $18,5T. Nevertheless, the amount of money in the logistics and shipping industry is enormous, and the need for software logistic automatization is everywhere. How can web solutions for logistics help to prevent the delay of freight and low shipping cost estimates?
The most visible part of the shipping and logistics market is carriers — owners of the transportation models, such as trucks, planes, ships, and trains, as well as those who run the warehouses and ports. For now, the connecting link between these asset-based carriers is often an asset-light 3PL (third-party logistics provider). They help move cargo and add extra services, such as storing cargo between transport steps and processing shipments. Working behind the scenes, 3PLs have more than $700B industry worldwide.
3PL market size in 2016, by region (in billion U.S. dollars)
How Poor Workflow Automation Impacts Logistics Efficiency
To get a shipment quote from a traditional freight forwarder takes from 24 to 48 hrs. If you get raw materials from Asia to the US, for example, it should go through several stages. Firstly, your freight forwarder needs to find a truck to get your goods to the port, secondly, the company needs to see a ship to carry your goods to the US, and finally, it needs to find one more truck to get the goods to your warehouse at the destination, before you ship it downstream in your supply chain. Also, it is obligatory to:
- file with the relevant government agencies;
- clear customs;
- go through inspections;
- be insured ;
- locate intermediary warehouses, if needed.
Today, all these manipulations are done via phones and faxes in a very decentralized network of relationships.
How Web Logistics Services Save Time and Reduce Budgets
Internet of Things, Reverse logistics, and automation have created a necessity in rethinking, refining, and improving internal processes to keep up. The right web solution for effective data exchange and communication is crucial for logistics companies seeking to adopt new ideas, prepare for supply chain changes, and monitor progress against new plans. A web-based logistics service is essential if you need to control data in real time.
Opportunities of individually designed web logistic services:
- the base of available transport, documents, and specifications;
- business logic, that counts the optimal way, norms of weight and number of km to be passed during the day, indexes of cargo wastage during transportation;
- the easy and fast connection between all participants of the transportation process via messaging services;
- geo-informational service;
- various other options, according to your business needs.
Architecture and components of the Smartseeds project
Web solutions for the transportation industry have a complex structure and include many external functions, so their development takes much time, but the result is worth it. For example, the Smartseeds — project, which we have developed for effective cooperation of cargo owners and carriers, according to the forecast, will get half of the country’s transporting market — it is more than 20 thousand trucks.
Key Participants in the Freight Forwarding Process
There can be very many participants in the cargo delivering process, but the key men are:
- Cargo owner — a company or a person, who needs to deliver cargo to some destination point;
- Carrier — a company or a person, who has transportation facilities, for air freight, ocean shipment, railway cargo delivery, etc.;
- If you work with the freight forwarding company (a 3PL), then all interactions go through it;
- Also, there are representatives of the terminals, working in ports and willing to receive information about transport that is about to arrive at the port for disembarkation.
If the cargo owner wants to minimize his transportation budget, he works straight with the carrier (without 3PL) — the cargo delivery often becomes more complex in this case. Not every carrier has sufficient capacity to transport the full volume of cargo the cargo owner needs.
To make cargo delivery effective and available for all, there should be a carefully thought-out web solution for each cargo delivery process participant. For example, we have developed three versions of Smartseeds: for carriers, cargo owners, and drivers, and we are designing a system that helps cargo owners find trucks for large volumes of cargo.
Version for cargo owner — the main task is to simplify and systematize the search for carriers and to minimize the volume of bureaucratic procedures while organizing the transportation process. Its interface may resemble an Uber-like app. For example, in Smartseeds, the cargo owner only needs to choose a departure point, a destination, the loading date, and the cargo type.
Version for carrier should help owners of trucks (or other transport) to perform transportation. No single carrier can accommodate all requests. There are several reasons for this: short-term, high cargo volumes, and no vehicles available at the moment. For example, in Smartseeds, the cargo owner doesn’t choose a carrier because he shouldn’t be overly concerned about it. He publishes the request and waits until it is performed on time. The carrier only needs a free truck available and to respond to the request. So few carriers may handle a single order.
How to Boost Driver Efficiency in the Logistics Process
In 2015, there were a total of 66.56 trillions of ton-miles of freight. The highest share of freight was moved by truck. Whether the cargo owner uses air freight, rail shipment, or sea shipment, they also need a truck to deliver the cargo to the port of discharge. The driver’s task is simple: load the cargo at the loading point and transport it to the disembarkation point. However, this simple task should be completed on time. If he doesn’t, the cargo may spoil, and a truck delay could disrupt the entire shipment process, resulting in financial losses.
Total U.S. ton-miles of freight from 1990 to 2040 (in trillions)
To manage the transportation process from the driver’s side, we have designed a special mobile app within the Smartseeds project. The driver can change the current stage of request completion and exchange information with the support service in case of unexpected circumstances. To track vehicle movement, a GPS sensor is installed on each truck and periodically sends coordinates to our GIS, enabling real-time tracking.
In case you consider investing in a logistics service or startup, study our latest whitepaper “How Modern Digital Trends Reshape Logistics” and make sure you take only the right decisions.
