The logistics industry is going through a big disruption… a big technological disruption specifically.
A number of factors including “Amazon effect”, sustainability and technological disruption are fundamentally changing the logistics industry. Organisations that are not resource efficient, agile, and quick to respond to customer demands risk their long-term commercial viability.
Enabling technologies such as IoT and predictive analytics are being used to flip this notoriously manual industry to one that is increasing digital.
eyefortransport by Reuters Events sat down with, Martin Ring, Global COO, Damco and Joel Sellam, Founder and CEO, Stargo to discuss Damco’s drive towards digitalisation.
Nicholas Stylianou, Project Director, eft (eyefortransport) by Reuters Events: This conversation is framed around Damco’s digitalisation journey. But just taking one step back… Why is there such an urgent need for digitalisation within the logistics industry?
Martin Ring, Global COO, Damco: From my perspective, I don’t consider it to be an urgent need, but I rather think there is a need to embrace digital capabilities in general. In my view, and I don’t know if it’s a misconception, but we hear a lot about digitalisation and how tomorrow is going to be all about e-forwarders with robots and AI largely running the operations. But that’s not how we see it.
I think there are a lot of more technical capabilities available today than there were five years ago. And I think it’s a matter of embracing them.
At Damco we see it as part of embracing the new technologies as they become available. Using them to equip our people to make better decisions for our customers and support them better. And that’s really that’s really our approach to digitalisation.
I think there are a lot of more technical capabilities available today than there were five years ago. And I think it’s a matter of embracing them. I don’t see digitalisation being this big and scary disruptor… I think it’s about embracing the technologies that are available, just like we went to emails 20 years ago.
Nicholas: You mentioned this has ramped up in the last five years… Compared to other industries it seems like this has been quite a slow process. Why has it taken so long maybe for logistics to embrace digital technologies?
Martin: If you look at our industry, I think it has taken longer because it’s very complicated. There are a lot of process steps. There are a lot of parties involved. I also think that there are forces in the industry that might not might not have had a great interest in accelerating digitalisation. That’s what they made a living out of, making the complicated understandable. And of course, when you see more digitalisation you get more transparency and more simplicity. And that, so to speak, lowers the bars of entry for those who can play that digital game.
The data needs to talk to each other and be presented as one to the customer
Nicholas: Supply chains are very complicated with many different kinds of players and many different steps. Can you kind of speak to how complex the process is in becoming digital?
Martin: How does the ideal world look versus our reality today, right? Over the last ten years there has been an increase in the number of channels that a customer wants to be reached on and wants to reach us on. We cannot just expect them to call us like we have done in the past.
They might reach us from their computers they might reach us from the laptops, from the mobile phones, whatever it is. So, I think the individual logistics provider and the channels expected out of the individual logistics provider have increased significantly.
I think customers are looking for a more intuitive product today than they might have done in the past. And that of course, means that if you are not able to deliver that yourself, you’re going to have to rely on more parties. That brings added complications around the management of data. The data needs to talk to each other and be presented as one to the customer.