With the advent of the Internet of Things and the promise of artificial intelligence and machine learning right around the corner, digitization is impacting just about everything these days – including the logistics industry. Although, the industry is typically slower to adopt new technologies because of the complexity of the supply chain and the headache (and cost) that updating legacy programs and solutions would cause. However, as challenges increase and consumers become more acclimated to all things digital, the logistics industry, including the LTL sector, is realizing the need to get on board with digitization.
What Does Digitization Mean in LTL Logistics?
In terms of business and logistics, digitization is a broad term that may be interpreted differently depending on the company or sector in which you work. Generally, it refers to the process of using technology to automate processes or functions and transferring them to electronic form. Additionally, digitization is not a one and done update. It is something that evolves as technology and new innovations come into play.
So, what does digitization look like in the LTL sector?
In LTL, as well as all shipping modes, companies are looking for digital functions to simplify operations, eliminate paper documents, create efficiencies and provide much-needed data, such as freight visibility, tracking, rates and more, to improve their performance and meet or exceed customer demands. To get this digitization, LTL shippers and carriers will have to implement the technology that makes it possible. This will require replacing or updating legacy systems at a cost of money and time, which is one of the biggest hurdles in technology adoption. Companies don’t want to disrupt their supply chain even if it will pay off in the long run.
According to “Digitization to transform US LTL trucking,” an article on JOC.com by William B. Cassidy, “shippers in the past have been reluctant to digitize, but the COVID-19 pandemic is increasing the need for detailed shipment visibility and paperless transactions, and that’s generating greater interest among shippers in moving to more digital LTL processes.”
When it comes to digitizing functions of freight and logistics, there are many places a company can start as long as they have buy-in from the team involved.
For sake of the supply chain, a good place to start would be transitioning to application programming interfaces (APIs), which allow the shippers’ system to communicate directly with its carriers’ system. Through APIs, shippers have real-time access to their preferred carriers’ rates, allowing them to compare prices and book loads in seconds. Additionally, through APIs, all of the documentation is uploaded and stored in the system by order number for all parties to track and utilize the data. For example, electronic bills of lading (eBOLs) are immediately created when the shipment is booked, and carriers get access to more complete data while the shipper gets an electronic tracking number. This also allows the shipper to track the load and project an accurate estimated time of arrival for the end user. With all of this being done digitally, you take the paper out of the process, speeding up delivery and reducing risk of transmitting germs from driver to warehouse worker and vice versa. This is a huge benefit when in the midst of a global pandemic, not to mention it reduces human error and loss or mix-up of paperwork.
Speaking of the dock, digitization helps in the warehouse as well. As the midpoint of the LTL transaction, it is important to increase efficiency in the warehouse to ensure quick resolution with pickup and delivery. By using the data derived from tracking the shipments in the API, an LTL shipper can help warehouses better estimate arrival times. This helps the warehouse prepare for the truck, weight of the shipment and any other special circumstances involved. More and more warehouses and LTL carriers are looking to handheld devices to further digitize their processes so that communication happens in real-time throughout the entire shipping process. For instance, route changes or delays can be shared this way as well as bills of lading and POD receipts. However, for this to be successful, integration is the key. The handheld must be able to access the warehouse and transportation management systems. Switching to cloud-based systems allows for easy integration and upgrading as new technologies and innovations come out.
Are You Ready to Digitize Your LTL Operations?
Digitization is the future of LTL and logistics. It will deliver cost savings, operational efficiencies, quicker transit and even more as it continues to grow. This article is truly just the beginning! When it comes to digitizing the LTL supply chain, there is so much more that can be done and so much more to come in the future as it will continue to develop. However, if you can prepare your company to adapt to changes and set it up for easy transitions through cloud-based solutions that can easily integrate with other systems, your company will be at the forefront when it comes to implementing new innovative solutions.
Contact Banyan Technology for more information about digitizing your freight management.