New Report Uncovers Surprising Tech Investments by Global Shippers and Logistic Service Providers
The start of a new year is always accompanied by predictions and forecasts for the future. This year, McKinsey & Company, a worldwide management consulting firm, has taken a unique approach to their predictions. Instead of relying solely on their own insights, they conducted a survey of over 250 global shippers and logistic service providers to gauge their current and planned investments in technology.
The findings of the survey have been compiled into a comprehensive report that sheds light on the tech investments made by shippers and logistic service providers in transportation, warehousing, and planning technologies. What makes these findings particularly interesting is that a staggering 87% of shippers reported either maintaining or increasing their technology investments since 2020. Furthermore, an overwhelming 93% stated their intention to continue or further increase their spending over the next three years.
When it comes to foundational technologies, the report revealed that an unexpectedly high number of logistics service providers, 76% to be precise, have invested in transportation management systems. Similarly, 64% of shippers have also made such investments. Moving towards more advanced solutions, the report highlighted that 68% of logistics service providers and 56% of shippers have invested in real-time transportation visibility, route optimization, and telematics. However, it is worth noting that certain cutting-edge solutions such as delivery drones and hydrogen vehicles are still in the early stages of development and adoption.
Within the transportation sector, the report identified digital freight procurement and asset tracking & data mining as technologies that are widely used. Additionally, automated guided vehicles (AGVs) for internal transport, enhanced driving solutions, and digital yard management are gradually scaling up. As for the futuristic technologies like delivery drones and hydrogen vehicles, they are still at a relatively early stage of development.
It is important to acknowledge that implementing new systems is not without its challenges. Many companies mentioned that developing a business case, change management, and training were the main obstacles faced when introducing new solutions. Interestingly, around 80% of logistics service providers and 68% of shippers cited the cost/return on investment analysis as the biggest hurdle in transportation transformations.
While this report offers valuable insights into the technology investments made by shippers and logistic service providers, there are still burning questions that remain unanswered. One technology that holds immense potential to revolutionize transportation is autonomously driven semi-trailer trucks. However, the report does not address when this technology will be widely available, the potential stages of its roll-out, or which specific autonomous driving model is likely to dominate the market. These unanswered questions leave logistics executives eager for more details.
In conclusion, McKinsey & Company’s report on shippers’ and LSPs’ investments in technology has revealed surprising trends within the industry. The significant percentage of shippers and logistic service providers increasing their technology investments demonstrates the growing importance of embracing innovative solutions. While foundational technologies have gained traction, it is the advanced and cutting-edge solutions that hint at the future possibilities in the sector. Logistics companies will continue to face challenges in implementing new systems, but the potential benefits in terms of cost, driver, and productivity management are driving them forward. Despite the report leaving some questions unanswered, it serves as a valuable resource for those tracking the evolving landscape of the logistics industry.
