Digitalisation is not optional, says 3T Logistics chief
June 19, 2018
The logistics industry is going through a dramatic technological change and blockchain is one of the drivers, according to Steve Twydell (pictured), CEO of 3T Logistics, speaking at this month’s Automechanika show in Birmingham, UK.
“The industry is going through change,” he said. “Blockchain is the in-word at the moment, the technology everyone is talking about. This is all part of the fourth industrial revolution, which is changing the way we live.”
Companies, he said, were taking back control of logistics using technology. “This is not something that is coming,” he said, “it is here already. If you opt out as a company, you die. It is about using digital technology to change a business model. Change is not optional.”
He said there were lots of apps and elements replacing what companies were doing with lots of processes being automated. The new 4PL and systems technology companies were helping companies through the change.
Six signposts, he said, were pointing to what was happening in the industry. The first was that ninety per cent of outsourced logistics handled by the big companies was being digitalised.
The second signpost was that for every £15 being invested in logistics, only £1 went to legacy logistics companies with the rest of the investment into digital logistics.
However, the third signpost shows that only 28 per cent of logistics companies are ready for digitalisation, compared with 41 per cent in the automotive industry and 45 per cent in electronics. Fourthly, the entire market for land transportation will have switched to electric vehicles by 2025.
The fifth signpost is market pressure. Logistics represents ten per cent of global GDP, lorries typically run thirty per cent empty, and the age of long-distance lorry drivers is rising, with the average age in the USA being 49 and in the UK 57.
“Nobody wants to drive lorries any more,” he said. “One answer is to pay drivers more, but already inflation for drivers’ wages is three times the average. The other answer is driverless vehicles. Driverless vehicles are not going to go away. They are already looking at the key issues to make them work. Driverless trucks are the poster children of logistics.”
But he said among the problems that needed tackling was security, such as dealing with somebody using GPS spoofing to take over a driverless lorry and divert it elsewhere to steal the cargo.
The sixth signpost is geo-political change, and in Europe Brexit is a good example.
“The UK has to become more cost effective,” he said. “It is not going to sit there and become a third-world country. We will use technology to get us out of the problems.”
Technology trends happening, he said, included blockchain, artificial intelligence and big data analysis. And 3D printing will be a big one for the logistics industry with goods being manufactured in the lorry while it is on its way to the destination.