Shipping for the Digital Age

Robots, autonomous vehicles, and other fancy hardware like drones are the cool new toys in logistics. Although logistics and transportation is one of the largest markets on the planet, the relative lack of innovation in the sector is surprising.

Marty McFly and the rest of the “Back to the Future” crew predicted that this year—2015—would be the year for innovative vehicles like hover-boards. And though we’re still waiting on that, we can make phone calls without touching a button, print images in 3D, and start our cars without ever putting a key into the ignition. Flying DeLoreans can’t be that far away.

Why, then, has it been so difficult to find new and innovative ways to move physical goods from one place to another?

The problem is putting all the pieces together. Shipping managers deal with various procedures, carriers, equipment, destination types, and expectations. How do we synthesize a system that comes with so many variables and changing pieces?

Certain market leaders such as Stamps.com, Neopost, and Pitney Bowes have tried to create a single end-to-end logistics solution by acquiring various smaller companies that each provide solutions for different parts of the picture. Unfortunately, this is not enough.

Can we connect the technological dots? We have already bridged the gap, for instance, between carriers and e-commerce shopping carts, ERPs, and salesforce. But can we create a complete solution that brings the shipping industry into the digital age, making moving A from B to C as easy as 1-2-3?

In order to create a consistent end-to-end logistics system fit for an innovative and demanding society of customers who are used to one-click results, the solution needs to solve a multitude of issues:

Pricing. In 1980, President Carter signed the Motor Carrier Act, deregulating the trucking industry. This opened the door for carriers to set their own prices, spurring competition and lowering both prices and margins. This resulted in some incredibly complex pricing schemes. In short, it often takes a degree in advanced calculus to figure out how much it is going to cost to ship something, and that shouldn’t be the case. Simple, transparent pricing is imperative to the evolution of this industry. End-to-end solutions can’t exist without it.

Packaging materials. Every commodity is different, which means packing supply companies continue to print new boxes for every tiny order we process on e-commerce sites such as Amazon. Some e-commerce businesses claim they will consolidate orders to reduce materials, but the problem remains: If you need a box, a new one usually has to be printed. That’s slow, cumbersome, costly, and inefficient. We need an intelligent packing material that is inexpensive to manufacture, automatically protects the commodity, and is flexible enough to be adjusted to fit the most viable dimensions for the product being shipped.

Network re-balancing. As we mentioned, packing materials are expensive, bad for the environment, and usually wind up stuck at the destination until they are taken to the dump. We need an efficient network to recirculate reusable materials to reduce costs, improve their availability, and cut down on pollutants.

Independent crossdocking. Crossdocking supports the hub-and-spoke distribution model by allowing carriers to move goods from truck to truck efficiently. This allows carriers to ensure service to any destination. New startups diving into the logistics space are often limited by their inability to crossdock whereas one startup player, Cargomatic, is using local terminals within their network to crossdock so they can service more destinations and better serve their customers’ pickup and delivery needs. A complete solution must include crossdocking for the end-customer to have a positive experience.

Universal tracking. In this day and age of limited attention spans, we can hardly sit through a 30-second commercial, let alone wait for days or even weeks for a box to arrive at our doorstep. Thankfully, many carriers offer package tracking. This is important to keep us in-the-know in order to ease our impatience, but all the different systems to track packages being delivered via different carriers make it hard to follow. A one-stop shop to track all shipments, regardless of destination or carrier, is crucial.

Logistics systems are complex, and complex issues require complex solutions—in other words, time and hard work. Luckily, technology and innovation mean the promise of a complete shipping logistics system is much closer than a car that can go back to the future.