As the Fourth Industrial Revolution brings advances in fields such as AI, IoT, Big Data, blockchain and robotics, certain industries have responded quickly, while others have been able to carry on without radical change. The Transportation & Logistics (T&L) industry has introduced innovation and technology at a much slower pace than other sectors, but that is changing, and it is changing now, says Amihai Zeltzer, Director of Industries Transportation & Logistics at Salesforce. When Amihai looks forward, he sees a leapfrog coming to the T&L industry, as B2C companies like Amazon have rapidly shifted customer expectations around parcel delivery. We asked Amihai a few questions about the current and future state of the T&L industry.
An Interview with Salesforce’s Amihai Zeltzer
Q: Why is T&L just starting to feel the impact of new technologies?
AZ: With the evolution of technology, customer expectations have changed. Online shopping has gained traction, we now purchase products through mobile, and we are beginning to connect B2B2C. Shippers – who are consumers in their personal lives, after all – are looking at the experiences they’re having in their personal lives and want to apply those standards when they work with their logistics providers or carriers. For example, the notion that one should be able to book space for freight with the same ease as when one books an airplane seat is gaining momentum. Service levels are increasingly impacting decisions – in the domains of leisure, education, employment, almost everything we do. Transportation & Logistics is also a service. It uses more than one mode and many people to meet shippers’ and buyers’ expectations of on-time delivery, in full and in a customer’s preferred way. So, suppliers and shippers are looking to become more efficient, accurate and transparent, and they are demanding that logistics services provide the same experience they have as when, for example, they book a seat on a flight.
Q: What adaptations are required of T&L organizations to accommodate the latest trends in technology and the business world?
AZ: Change starts with people. A change in mindset needs to take place, with executives driving their organizations forward by putting the customer at the forefront of every decision. As long as every discussion begins with the customer, the technology solution will follow. For example, customers hate to miss deliveries, so how can we make sure that every time we ship our product, it makes it to the customer the first time?
Q: What, if any, are the implications to B2B T&L of rapid growth in B2C parcel delivery?
AZ: Last year, China’s State Post Bureau estimated that more than one billion packages would be delivered across China in just a single week in November. That is roughly equivalent to the number of packages delivered across China in all of 2006. With technology, global becomes local, and in a decade from now, we will be able to do things that today seem very complicated, like international trade. Over time, we will see in logistics the same evolution we have seen in travel. That will introduce new changes in the supply chain. We already see businesses coming together to build a new standard to promote trust, transparency and efficiency in supply chains that we call a distributed trusted ledger, or blockchain. Logistics companies will be required to meet the same standard that customers have in other industries.
Q: How can T&L businesses compete with the speed and scope of a service like Amazon Prime?
AZ: One thing Amazon does very well is move closer to its customers by focusing on one of their biggest needs: convenience. Convenient does not mean fast; it means fitting the timing that is best for customers. By truly understanding customer expectations, you gain that competitive advantage. And the closer to the customer you get, the more personalized and predictive your experience can be. That is how T&L businesses can compete with Amazon. Imagine a company called @yourservice, your own personal logistics provider. @yourservice delivers strawberries to your home or office and knows that each shipment of berries probably won’t last more than a week in your refrigerator. So, it’ll suggest the delivery of a fresh box when you need it and at your convenience. Now, that’s personalized and predictive!
Change is Coming
Customers want a personalized, connected experience, and that desire is only growing as B2C parcel delivery surges ahead with convenient solutions for customers. PWC’s recent Transportation and Logistics Trends Report concluded that over 53% of existing services will be digitized over the next 24 months to boost revenue and customer experience. Now is the opportune time for T&L businesses to harness this next wave of innovation by getting even closer to their customers. How will you adapt to the Fourth Industrial Revolution?