Dr. Shereen Nassar, Global Director of Logistics Studies and the Director of the MSc Logistics and Supply Chain Management Programme – Edinburgh Business School, Heriot-Watt University Dubai, shares insights on the future of transportation in logistics
A report by the United Nations Conference on Trade and Development (UNCTAD) stated the market for frontier technologies (a group of new technologies that take advantage of digitalisation) could grow to over USD 3.2 trillion by 2023.
Technologies such as artificial intelligence (AI), the Internet of things (IoT), big data, blockchain, robotics, and drones all seem to have increased prominence across sectors. These technologies help with efficiency, productivity, and agility.
Globalisation and trade are increasing, and novel mobility scenarios are evolving from new technologies and market entrants. However, a growing focus on sustainability and environmental impact has placed new restrictions on how companies operate.
Additionally, from global sourcing and omnichannel demand to disruptive events and ever-rising consumer expectations, logistics features so many complexities that it is imperative for technology to be embedded within the industry. With intricacies come challenges, especially in the transportation and logistics sectors: importers are expected to find competent and inexpensive ways to move goods from manufacturing facilities – to distribution centres and then, finally, into the hands of consumers.
With the easing of restrictions and a visibly downward COVID-19 trend the industry’s growth is evident. According to Reportlinker.com the freight and logistics market in UAE is expected to reach USD 31.41 billion in 2026 growing at a Compound Annual Growth Rate (CAGR) 8. 41% between 2021 – 2026.
The report also states that the UAE freight and logistics market has been growing steadily, mainly driven by the consistent and fast growth of e-commerce across the globe and the region along with rising international trade.
While all of this has created a great need for the inclusion of technology, the transportation and logistics sectors can by far be the most benefitted by it.
Autonomous vehicles and delivery solutions
The introduction and combination of artificial intelligence (AI), machine learning (ML), and automation have provided means for the logistics transport industries to give convenience a new dimension. Capable of almost completely independent transportation of goods, the use of self-driving or autonomous vehicles (AV) for delivery is here and will stay.
AVs along with drones and 3D printing – also known as additive manufacturing – are among emerging technologies working towards resolving the challenges of last-mile deliveries. These solutions can be integrated into local cross-docking centres with urban freight systems for collecting and receiving goods.
These solutions are still lacking the necessary regulatory frameworks. Additionally, there has been a major shift in the way activities are undertaken due to the pandemic. It has pushed for safer operations and for that rapid development of contactless solutions became a priority across industries, with logistics being one of the former sectors. In addition to safety, autonomous vehicles support improved operational efficiencies, autonomous trucks and vehicles can help lower freight costs, improve truck utilisation, reduce logistics costs, improve fuel efficiency —reduce delivery times.
Cloud-based transportation management systems
Transport Management Systems (TMS) are becoming increasingly significant in the supply chain. Solutions are now moving towards cloud and a growing number of firms are migrating their existing TMSes towards cloud systems with considerable investments made into these systems. As a working system, TMS, in itself, is one of the most important investments for an organisation as it uses technology to help firms plan, execute, and optimise the movement of goods, and making sure the shipment is compliant with proper documentation.
The introduction of cloud-based systems has taken TMS a step further as it automates manual tasks allowing more streamlined workflows and increased efficiency. It only requires an active and strong internet connection by which the system is accessible from anywhere globally, even remote locations.
Furthermore, it consolidates data from multiple internal and external sources allowing for transparency and greater visibility. Additionally, the advances in cloud computing and Internet of Things (IoT) have provided a promising opportunity to address the challenges caused by the increasing transportation problems. Transportation Management System Market is expected to grow at a CAGR of over 10.85% during the forecast period (2021- 2026) compared to 9.8% for the forecast period (2015 – 2022) which has not considered the COVID-19 impact.
Near-field communication
Another technology revolutionising various industries is near-field communication (NFC). Majorly used in payments to make them contactless, NFC has gained prominence in the past few years due to the need for safe payment requirements. But its implications for supply chain management, especially when combined with the internet of things (IoT), could become just as conventional and potentially even more disruptive.
NFC facilitates electronic devices, including mobile phones and payment terminals, to communicate with one another for payment and other related transactions. With transport networks increasingly becoming interlinked – given that multimodal travel and transit network connectedness emerging as a trend, NFC’s can increasingly support easy transportation and transit payments.
Enabling millions of smart devices in the marketplace to act as contactless tickets or transport cards working seamlessly with public transport operators (PTO) and mobile network operators (MNO), this innovative integration is revolutionising both the serviceability of technology and the overall travel experience.
Next-gen GPS locators and anti-theft systems
While global positioning systems (GPS) have been around for nearly half a decade, it has become almost indispensable to individuals and certain businesses. The logistics sector has greatly benefitted from the invention which has become increasingly interactive, modern, and accurate. GPS units used by firms today are also extremely versatile. The predict better routes that have less traffic, avoid congestions due to accidents or road closures, predict extreme weather conditions, and suggest better routes for faster delivery.
GPS tracking enables the development of logistics mobility solutions to help you take control and monitor fleet vehicles and manpower. A modern mobile transportation tracking software can provide information that is critical cost assessment, excellent customer service and improves efficiency.
Modern GPS business solutions allow companies to have a constant communication with the fleet. From rerouting to assigning an additional pick-up GPS locators can support through the information they provide.
Furthermore, visibility through tracking technology, adoption and adjustment for increased traceability support anti-theft GPS which allows receiving near time locations for the entire fleet and other items in transit.
Sustainability at the centre
Above everything, sustainability forms a core aspect of future of transportation in logistics. The future of the industry needs to be environmentally friendly and energy efficient. According to PwC, carbon dioxide emissions from road freight transport have risen by more than 20% since 1995.
Using advanced technologies that support efficiency, such as AI, ML and IoT can provide much needed solutions to minimise unnecessary travel times and delays. By optimising scheduling through cloud-based TMS to assigning low fuel using autonomous vehicles to using eco-friendly vehicles, and by using biofuel instead of fossil fuel – the industry can create a lasting impact on the environment.
Technology is now forming the core of our world. Tech-enabled solutions are powerful and imperative in creating a faster, agile, and transparent logistics sector and transportation in logistics needs to be supported by advanced technology to further increase its value in the industry.
The global logistics market is no more based on age-old solutions and systems, it has evolved exponentially and continues to forge new paths for which the industry needs to keep up with the latest solutions and capabilities.