The Road Ahead
How IT is currently shaping up the Transport and Logistics industry and the ways in which it may enhance productivity in future
The logistics and transport is visibly a sector that has gained a lot of momentum over the past few years and in the wake of Post-GST and E-Way bill regime it has been changing in unprecedented ways. Another important change is a favourable trend towards utilising the technology for which the awareness has been consistently growing. These two trends are reducing the incentives for small transport businesses and driving faster consolidation. The recent news also suggest that many players, startups and incumbents, including the international ones like DHL are targeting the logistics sector with higher assets on books indicating consolidation. The consolidation is likely to bring professionalism to the sector that will pave way to ever increasing adoption of technology. This article discusses how the IT is currently shaping up the industry and the ways in which it may enhance productivity in future.
The Widening Net
First,I would like to define IT broadly which combines the software, IoT and analytical tools like machine learning and its offshoot, AI. In terms of software such as accounting and ERP, the adoption of IT has been notable. The penetration has been significant with increasing number of softwarebeing adopted by a number of even small sized players.With the cloud based billing and ERP software the penetration is expected to be even deeper in near future.
Although the IoT devices are being utilised increasingly, the use is mostly at operational level and reactive. The utilisation of IoT devices are limited to basic types such as geo-location devices or GPS trackers. These devices are now ubiquitous due to substantial efficiency gains. The government has also introduced regulations to ensure mandatory compliance of data sharing with the government. It has specified standards for utilizing GPS devices. This indicates the spread of basic IoT devices by government led-push. The push is likely to break the inertia and pave the way of even faster adoption of IoT soon.
The penetration of sensing devices is also getting deeper with some of the players using real time monitoring of temperature, remote door open/close data etc. But the IoT technology can achieve much more especially it can help in automation of seamless integration of processes resulting in substantial efficiencies. Apart from automation, IoT will likely to work wonders in tandem with Machine Learning technology.
THE INCREASED USE OF TECHNOLOGY ITSELF CAN BRING DOWN THE COSTS BY A COUPLE OF PERCENTAGE POINTS OF GDP IN VERY SHORT TERMS. THEREFORE, IT IS IMPERATIVE FOR THE NEW GOVERNMENT TO LAY OUT FACILITATIVE FISCAL AND POLICY FRAMEWORKS TO PROMOTE LATEST TECHNOLOGY IN THE FIELD AS IT IS THE NEED OF THE HOUR — Rohit Chaturvedi, CEO, TransportHub.com
TransportHub expects that the most profound and exciting changes will be brought about by the deployment of Machine Learning. Although, there is no clear articulation of AI strategy at present even by the new age companies, the technology holds huge potential to make the industry highly efficient. Expectations The use of ML and its variant AI has still not started materially due to lack of clear understanding by the end users. We expect that to change soon with the plethora of startups wanting to change landscape in transport and logistics in India by introduction of increasing number of use-cases of ML. In the beginning, the use of ML will be limited towards supervised learning such as predictive analytics. Since Machine Learning algorithms are data hungry, they will get a boost as the spread of IoT will provide huge amount of accurate and automated data. In other words, IoT is expected to work as complement to Machine Learning and AI.
VR and AR are yet to even register into the psyche of the industry. Transport Hub, appreciates that the technologies like VR and AR can play a significant role in reducing road related mishaps by training drivers in virtual environment with plethora of simulated scenarios comprising local driving conditions and other complexities. However, these developments are some way off.
All these developments are likely to take the transport and logistics industry in the vanguard of technology revolution. However, given the peculiar nature of the industry, technology solutions must be designed to cater to customised use cases of the industry. Understanding these customised needs, Automating Transport TransportHub is working to combine the power of IoT and AI to automate logistics chain for the shippers. It has also introduced,a unique product called Improvement in Cold Chain Efficiency (ICE), which is a cold chain automation solution which predominantly targets F&B, pharma and other industries. The solution utilises IoT to automatically manage temperature based on defined policies. The temperature can also be managed remotely from anywhere in the world with a click on its Mobile app. Innovations like these will invariably become indispensable for the future of logistics industry to sustain and grow as they have certain crucial needs which need to be met and the use of tech enabled solutions can only save the day for them.
Indian logistics industry is considered to be highly fragmented, unorganised, and inefficient with logistics as it costs about 14% of the GDP. This compares adversely with the logistics costs in peer economies. The government wishes to drive the costs down to less than 10% of GDP by 2022. (Source: https://urlzs.com/3xSDT).
However, the implementation plan has not yet been laid out. Transport Hub believes that the increased use of technology itself can bring down the costs by a couple of percentage points of GDP in very short terms. Therefore, it is imperative for the new government to lay out facilitative fiscal and policy frameworks to promote latest technology in the field as it is the need of the hour. Companies in the industry also need to start thinking on the best usage of new technologies. For companies deciding not to adopt AI run the risk of obsolescence in not so long term.