This is the time of year when industry analysts and technology experts make predictions about the future. McKinsey & Company, a worldwide management consulting firm, has done the same. However, their predictions are based in part on a survey of more than 250 global shippers and logistics providers. The survey covered what technologies they currently use as well as their planned investments.
McKinsey recently released a report on shippers’ and LSPs’ investments in transportation, warehousing and scheduling technologies. 87% of shippers reported that they had maintained or increased their technology investments since 2020. 93% said they plan to maintain or increase their spending over the next three years.
In terms of core technologies, a surprising 76% of logistics service providers and 64% of shippers have invested in transportation management systems. More advanced solutions include real-time transport visibility, route optimization and telematics. 68% of LSPs and 56% of shippers have invested in these more advanced transportation solutions. Even more cutting-edge solutions, solutions that may or may not prove their worth, include delivery drones and hydrogen vehicles. These ground-breaking solutions are at a much earlier stage of development.
In transportation, digital freight procurement and asset tracking and data mining are widespread. Automated Guided Vehicles (AGVs) for internal transportation, enhanced driving solutions and digital yard management are starting to scale up. Advanced technologies, such as delivery drones and hydrogen vehicles, are at a low level of development and adoption. The main drivers for these investments are the needs for improved cost, driver and productivity management.
Implementing new systems is not easy. Most companies cited developing a business case, change management and training as the main challenges they faced when implementing new solutions. About 80% of LSPs and 68% of shippers cited cost/ROI analysis as the biggest challenge for transportation transformations.
The technology that could most change the face of transport is autonomously driven semi-trailers. Understanding when this technology will roll out, how the rollout might progress, and which specific autonomous driving model is likely to win the market are the biggest questions facing logistics managers. This report did not address these very difficult questions.
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