This article originally appeared in the December Issue of Logistics Journal, a monthly publication for 3PLs produced by TIA (Transportation Intermediaries Association). Banyan is a regular contributor to Logistics Journal. To receive the publication directly, visit the TIA website to learn more about becoming a TIA member.
By: Brian Smith, Banyan Technology CEO
2017 was a whirlwind for us all. We witnessed some major shifts in the freight industry: the adoption of the ELD mandate and subsequent delays stole the spotlight, we started the discussion on blockchain, confronting the growing driver shortage, and of course we have a new president, all of which has brought some surprises and frankly, some uncertainty to the industry as a whole.
Throughout this busy year, it has become increasingly clear how important it is to stay on top of the trends. As we look to 2018, we’ve compiled the top 5 trends to watch for in the freight industry in 2018:
1. Aggressive LTL Pricing Direct to Carriers
LTL has become a major battleground as technology solutions make this traditionally complex mode of shipping more manageable combined with carriers increased pressure to find more creative ways to grow revenues by leveraging technology and driving efficiencies. This alignment provides commercial shippers who previously didn’t meet the volume thresholds to access competitive pricing direct from carriers. This leads right into our next prediction…
2. Carriers Eroding 3PLs Market Share, Permanently?
The pressure is on for 3PLs: Carriers are eroding 3PLs market share by improving their systems, providing shippers with better platforms for quoting and booking, and positioning themselves to offer many of the services of a 3PL.
3PLs can continue to stand apart from traditional carriers if they stay ahead of the technology curve, which will allow 3PLs to do more with fewer resources. At the end of the day, the players who provide the best customer service most efficiently will win and clearly technology plays a critical role in driving financial success tied to this strategy.
3. Lean in: Blockchain
2017 was the beginning of the blockchain story as it applies to the freight industry. At a high level, blockchain technology is a way of securely managing access and information. The core of blockchain hinges on the idea of decentralization, which essentially distributes power and risk equitably across players in a network. Blockchain will be expanded upon in 2018, and we’ll learn a lot, but don’t expect to see blockchain fully operational on a large scale. At this point, the industry as a whole has a lot of learning to do to fully understand the technology and the different roles we’ll each fill. While there are already corporate alliances forming surrounding the topic, it is important to remember that in true blockchain, no single entity owns the data. By the end of 2018, you can expect to see an increase in the number organizations joining blockchain alliances, and those organizations will hopefully make progress on not only developing the technology, but determining how they will each individually contribute to that core mindset of decentralization. Don’t be surprised if you see an increase in the number of organizations making moves to monetize blockchain before the end of 2018. In 2018, Smart Contracts and Hyper-Ledger will move up the hype-curve.
4. Mass Customization in Transportation Management Software
Customer choice is now the expectation – as buyers, we want items in the size and color we want, when we want it. In 2018, expect TMS providers to drive further the next wave of mass customization. TMS providers are making it easier for users to tailor their systems for their own unique business operations. This will create efficiencies like we’ve never seen before.
5. A Technology Whirlwind
Technology solutions in freight management are already enhancing decision-making and reinventing business models. In 2018, technology will accelerate in creative ways to turnover historical assumptions and really change the way that freight is managed altogether. Our prediction is that by the end of 2018, we will begin to see a major technological gap – companies who leverage technologically advanced ways of doing business will be lightyears ahead of the rest, which will ultimately create a challenge in the industry. This is in part due to the reality that organizations within the freight industry are so intertwined.
Organizations who want to stay ahead should explore intelligent systems, understanding that these systems SHOULD reinvent your business. If you don’t want those technology solutions to change the way you manage your business, you should probably reconsider your time and investment. At the end of 2018, we’ll see some surprising clear winners and losers.
We left a few “buzz-worthy” trends off the list: self-driving vehicles, artificial intelligence, and the internet-of-things are in the works. We don’t expect those things to rock the industry in 2018, but it will be fun to watch them evolve.
This is a great time to be in the freight industry. Change is right in front of us and those prepared will grab their inordinate share of the market and success. Let’s go have a great 2018!
Brian Smith is the CEO of Banyan Technology. Banyan is a provider of live carrier connectivity, including API connectivity.
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