Next to the healthcare system, COVID-19’s biggest infrastructural burden fell upon the supply chain. Fluctuations in supply and demand of essential goods, along with the oil surplus, led to a freight cliff in mid-April.
Outbound tender volume and spot rates bottomed out, which highlighted a massive drop in demand.
As the market rebounds, technological investments are key to the industry’s recovery. To build a future-proof infrastructure, leveraging real-time data will be especially important.
Outbound Tender Volume and Rejection Rates plummet around April 14, the height of COVID-19. This shows less shippers provided minimal freight to carriers who were far less likely to reject a shipment.
(Sonar by FreightWaves: https://www.freightwaves.com/news/21-1-million-continuing-jobless-claims-and-transportation-stocks-rip-higher)
Even before the pandemic, the centuries-old logistics industry was already well on its way to a data revolution. Venture capital funds were pouring hundreds of millions of dollars into tech-y logistics startups and the traditional players were developing digital platforms to disrupt their own models.
The goal was to automate record-keeping once managed by spreadsheets, fax machines and desk phones. Carriers wanted to digitize paperwork like Bills of Lading (receipt confirmation) and rate cards. Meanwhile, shippers wanted to know where their freight or cargo was in real-time, whether it was delayed by bad weather in the middle of the Atlantic Ocean or stuck in traffic on I-95.
A notable milestone for adoption of real-time data in logistics came way back in January 2011 with the Federal Motor Carrier Safety Administration proposing Electronic Logging Device (ELD) implants on the engines of American commercial trucks. The goal was to restrict truckers’ driving hours to prevent exhausted drivers from endangering themselves and others. Prior to ELDs, truckers kept their hours on paper logs, which was far from accurate in terms of reporting and far from effective in terms of real-time response.
The mandate of ELDs, which went into effect December of 2017 after litigation, marked a notable shift from the old ways of doing business. While safety was the emphasis of the Congressional mandate, a switch to streaming real-time data meant the ability to track more than hours driven.
“You can get everything from ELDs: engine performance, driver performance, capacity, gas mileage,” says Kevin Hill, Director of Research at FreightWaves.
He warns that gathering data is only part of the equation; “the issue remains what’s good data and bad data from an ELD. It’s such an intense data set, so how do you cleanse and extract the data?”
Similar to the ELD mandate, the COVID-19 pandemic accelerated the supply chain’s big data adoption; especially in maritime logistics, where data is extremely fragmented and there are no ELDs.
“The digital transformation that [maritime companies] were slow in making became essential when the pandemic hit,” Avron Olshewsky says.
Avron is the Chief Technology Officer of the Maritime Fleet Management provider, 90POE.
“One client had been unifying data into one SharePoint, which was taking forever; suddenly, all the meetings and bureaucracy went away and it just happened.”
Experts believe the focus on data will lead to another planned innovation; autonomous vehicles.
“Data is the fuel that feeds the fire. With enough sets you can model real life driving, like the data coming from ELDs regarding brakes and acceleration.”
Kevin Hill sees a near future where autonomous trucks “incorporate all those metrics with machine learning and AI, then you have the ability to model your algorithms.”
Autonomous vehicles feel unimportant as COVID-19 continues to shut down carriers, reduce containers in ports and cause massive layoffs. This was especially tough for the tech-driven newcomers who were caught overextending themselves to gain market share. Many once sure-footed brands are re-negotiating rates and licking their wounds.
The companies most likely to come out the other side of the pandemic will be the ones who not only unify their data, but also find a way to use it. Unfortunately, top developers do not flock to the logistics industry. The supply chain must turn to technology to harness the data they have been sitting on and leverage it in real-time.
Take Vortexa, the energy analytics provider using advanced real-time analytics to deliver new services to their seaborne oil supply customers.
Or MarineTraffic, querying real-time data on Apache Kafka to map shipping fleet data.
Delivering new streaming services is the right place to start.