Pain Points in Logistics That Are Solvable With Software

by Vector | Nov 30, 2021 9:02:12 AM

Here's a question we'll investigate today: What pain points in the logistics industry can be solved with software? This was the underlying question of the 60 Minutes report "Freight Expectations."

First of all, this story indicates the supply chain crisis has reached a critical mass of mainstream visibility. When you're the leading story on 60 Minutes, you know you've really made it. To clarify, that's not always a good thing when your story is bookended by that famous tick-tick-tick-tick-tick.

Unfortunately, as anyone in the logistics industry can tell you, no news is good news.

Therefore, it was a bittersweet moment (in my opinion) when reporter Bill Whitaker gave the supply chain crisis the 60 Minutes treatment. Bitter, because all our supply chain pain points got exposed to the world. Sweet, because Whitaker's assertive baritone has a way of soothing worries about a problem. But did 60 Minutes solve anything?

The Key Pain Points of the Supply Chain

In general, 60 Minutes' report focused a lot on the symptoms of the supply chain crisis as opposed to providing any solutions. They reported that some businesses have no inventory. The ports are clogged. There's no chassis. There are too many local interests and not enough labor.

Specifically, 60 Minutes highlighted businesses getting gouged by demurrage and detention fees. For example, one business owner said he paid $1 million in storage fees in September 2021. In turn, he's raising prices. And that means inflationary pressure and reduced consumer buying power.

All this information got distilled into 60 Minutes' final mic drop. Whitaker said, "Don't expect a Christmas miracle." Did 60 Minutes just cancel Christmas?

The folks at 60 Minutes sure hit the zing button there. But as I mentioned earlier, their report didn't offer many solutions regarding the supply chain's choke points. And attempts to solve the crisis have not been entirely successful.

At best, 60 Minutes merely identified some of the key pain points facing logistics. Which is fine. A good list is a sensible way to approach a complex problem.

But like 60 Minutes' tick-tick-ticking, we know time is money in logistics. So let's work on this list. Perhaps we can get a layer deeper on this onion and prevent some Christmas tears.

Can Software Fix Complex Supply Chain Pain Points?

Consider this quote from Port of Los Angeles executive director Gene Seroka during his 60 Minutes appearance:

"And there, you've just diagnosed the problem. The cargo has nowhere to go. We've got to get a workforce in the warehouses, and the trucking industry that are complementary, to all this cargo that's coming in right now."

Software can get us out of any supply chain mess. Right? Short answer: Yes.

I say yes with confidence because, I mean, other than elbow grease and working longer hours, what else is going to do it other than software? Is there a more complicated puzzle to solve than the global supply chain? I'm asking that even though I have a teenager!

I hear Seroka describing a complex problem. But then again, I also hear Seroka calling for greater visibility throughout the supply chain. As we know, supply chain visibility is a hot term in logistics circles right now. But to clarify, visibility refers to using software—even more than we already are.

A Software Fix for a Workforce Shortage?

The labor shortage is one of the major narratives of the post-pandemic supply chain crisis. It seems like regardless of the industry, labor is the main bottleneck. The trucking industry is no different.

There are several ways software can help provide breathing room to this particular supply chain choke point.

I'll get into it more below, but digitized document software like what Vector has developed is the basis for every solution we'll cover today.

Take this example. Data and the software that interprets it is the heart and mind of all autonomous and robotic vehicles. The quality of our data and software programs will determine the efficacy of our driverless future. But in several ways, the driverless future is already here.

Autonomous Trucks

First of all, I believe there will always be a place for human truck drivers. In my opinion, autonomous trucks will fill certain specific niches for the foreseeable future. These niches will likely center around specific high-volume, modern highway routes and smart warehouses. The reason for this is the demands that optics software makes on roadways and routes.

In short, the way a driverless truck sees the road could limit or eliminate certain routes. Entire regions featuring certain terrain and weather might not see a driverless truck for a while. For example, what happens during winter months in northern states when roads are covered with snow?

That said, several companies, like Waymo, TuSimple, and Aurora Innovations, are leading the charge with driverless over-the-road trucks.

But trucks aren't the only autonomous vehicles coming to the supply chain.

Autonomous Material Handling

Automated approaches already integrate with existing processes and warehouse management systems (WMS) to streamline repetitive and labor-intensive order fulfillment tasks.

Robotic forklifts, autonomous material handlers, and other mobile robots are already on the market from companies like Yale, 6 River Systems, and Fetch Robotics. In general, warehouse operators might view automation as a way to lessen the risk of labor disruptions.

Software literally drives all these robots. With robots handling the heavy lifting, humans are able to spend time doing what we do best, in my opinion—managing, analyzing, and thinking creatively.

Digitized Document Software and eBOLs

Unfortunately, one anchor to autonomous vehicles and robotic material handling is paperwork. Electronic bills of lading aren't new, but they still aren't standard. In fact, the global supply chain industry needs a level of standardization that only software can fix.

Document digitization software from a company like Vector solved this problem years ago. But digitization is still only an optional upgrade—not an industry standard. Why?

Are we beholden to paper documents because of the contractual nature of a BOL? In other words, is it just about getting that John Hancock? Or worse, are we just stuck in our ways? Maybe it's both!

In reality, we need to standardize eBOLs. The information is what's vital, not the signature. It's the data that holds the power, not the BOL. Software can facilitate the electronic transfer of vital and sensitive documents.

If there are any remaining doubts about the validity of an eBOL, perhaps blockchain software can be added? Blockchain and cryptocurrency are already involved in the logistics and supply chain space.

My sense is that properly integrated blockchain will be an important administrative security piece. Put another way, BOLs are the backbone of every shipment in the industry. But I think eBOLs backed by blockchain can act like an exoskeleton. Can blockchain externalize the inherent contractual strength of a BOL? If so, it could dramatically improve efficiency in terms of standardized supply chain visibility.

Supply Chain Visibility, AI, IoT, and Digital Twins

Artificial intelligence (AI) gathers data quickly. Software can combine data from AI and Internet of Things (IoT) sensors to track container locations and conditions and use that data for good decision-making. It's possible to use digital twin technology to monitor fleets from a dashboard. And all this can happen without the need for hands-on human intervention.

Let's reduce dwell time! Every delay our trucks, ships, and containers avoid maximizes our supply chain resources. Software helps carriers identify issues and work around them. Bad weather. Construction delays. Traffic jams. Bottlenecks. Queues. Software is the solution!

Clearly, GPS technology is getting smarter. And smarter GPS has led to better routing already. Taken further, here's a specific equation only software can perform. I'm sure there's software calculating in real time how and where to reroute container ships in a way that won't cost more, won't lose freight, and still gets the package to its final destination on time.

Tick-tick-tick-tick-tick

"The White House has put a top-level task force on the problem. But other than twisting arms and wrangling concessions, there's not much it can do in an industry dominated by private companies, foreign shipping lines, and local port authorities. And no one we spoke with expects a Christmas miracle." —Bill Whitaker

I've been watching 60 Minutes on Sunday nights since I was a kid. I give the producers and reporters there a ton of credit for their excellent work. Their famous use of the pregnant pause? Revolutionary.

60 Minutes stories over the years have always seemed to find our society's pain points, right when they hurt most. And when it comes to our supply chain crisis, 60 Minutes knew exactly which choke point was the most concerning of all.

Indeed, the most important, most vital, most fragile choke point in all the universe to me isn't at a port. It's the one that chokes you up during a perfect holiday moment. Surrounded by loved ones—feeling that everything's okay.

Regardless of what arrives or doesn't arrive in time, let's never stop living for that moment.

I'm Brian Deines, and this . . . is Vector Minutes.

Cheers!

This post was written by Brian Deines. Brian believes that every day is a referendum on a brand’s relevance, and he’s excited to bring that kind of thinking to the world of modern manufacturing and logistics. He deploys a full-stack of business development, sales, and marketing tools built through years of work in the logistics, packaging, and tier-1 part supply industries serving a customer base comprised of Fortune 1000 OEMs.

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