The logistics industry evolves to support the sharing economy

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Driven by the customer demands of the digital era, the future will deliver efficiencies and opportunities the logistics industry has never seen before.

Asset sharing has become commonplace in many transport-provider sectors – including shipping and air transport. This allows for greater agility among smaller logistics players, streamlined pick-up and delivery, as well as lower costs, supporting the broader sharing economy.

“Even an industry as set in its ways as logistics is susceptible to disruption,” says Stephen Morris, Acting Director General of FIATA (the International Federation of Freight Forwarders’ Association). “Technology is certainly making greater flexibility possible across the spectrum, from forwarders to other service providers.”

Paul Cheetham, MD of Freitan Logistics and speaker at the upcoming FIATA World Congress, says that there are three technologies that are critical to disruption specifically in logistics. “The first is Artificial Intelligence, the second is self-driving vehicles and the third is drones.”

The combination of AI and self-driving vehicles is not limited to road vehicles and is already seen in Rotterdam in the Netherlands, Cheetham says. “Self-navigating barges are already moving goods on rivers. Elsewhere, self-driving warehouse equipment is fetching and carrying parcels.”

He points out that this will clearly have an impact on labour in the industry because it won’t need the same amount of human intervention, and ultimately, if developed correctly, this technology will be far more accurate and less prone to human error. “This means that there will be a shift – true in many industries – in the way human capital will be deployed.”

Cheetham says that, while drones are limited in terms of capability and application, they can currently only fly short distances with light weights. “That’s changing. In the next five to ten years, we’ll see drone deliveries becoming far more commonplace.”

There are already vehicles that are being adapted to receive drone deliveries. These special vans have safe landing zones on the roof of the vehicle, for the drone to land and release ordered packages. “While this has massive potential for the delivery of medicines to remote locations, for instance in Africa, or food in times of flooding when roads are inaccessible, the likelihood of drone-jackings will also become a reality – so this is will have to be considered.”

Cheetham explains that within this increasingly flexible and efficient space, there will be great potential for entrepreneurial activity.

According to DHL’s report ‘Sharing Economy Logistics’, 41% of US consumers have used programmes offering same-day, expedited, or on-demand delivery services. It becomes clear that the infrastructure to support this is growing to sustain user demand.

The report listed additional technologies that participate in this ecosystem, including digital payment infrastructure, communication APIs, location services and platform-specific algorithms, all of which taken together, are revolutionising the industry, making efficiencies possible, and creating greater need for on-demand services.

“The logistics industry of today is a very different creature from the logistics industry of tomorrow,” says Morris. “The combination of smaller, more entrepreneurial players in need of solutions, and larger established entities able to make significant investments in advanced technology, will support this disruption and deliver a future that we’re all only beginning to imagine.”

Paul Cheetham will be speaking at the annual FIATA World Congress to be held at the Cape Town International Convention Centre from 1-5 October 2019. The event is organised in conjunction with The South African Association of Freight Forwarders (SAAFF) and will serve as an international platform for industry leaders to discuss sustainable solutions within the freight forwarding and transport sector in Africa.

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