Logistics is one of the oldest and largest industries in the world. The industry has becoming saturated with additional new companies each year, resulting prices becoming like commodity items, where Profit and Cost can be measured. We now live in a digital era in which platform business models like Uber, Amazon, and Airbnb have proven effective and disrupted traditional business model. Working on a platform enables each company to collaborate and cooperate with others to share resources and be more adaptable to future market demands. Airbnb, for example, does not need to buy property to run its rental business, and instead, they are able to collaborate and cooperate with existing real estate owners to become one global real estate rental ecosystem.
The logistics industry, whose job as an Intermediate is next to be transformed into a platform business model. Shippers/consumers are able to place shipment on logistics platform, by passing conventional forwarders. The industry is still operating in linear-sequences and offline-environments, where each interaction and transaction need to be coordinated by human and paperwork documents that travel from one operation to the next. Currently, companies when serving its consumers are not directly connected and interacted to each other, there are too many delays in communication and response. As a result, operation, marketing and administration cost becomes expensive with low efficiency to fill unused resources.
The shifting age bracket of older to younger in population preferring technology platforms when shopping for their necessities has created a new variation of consumption and impacted new logistics service requirements. The business world has become online and logistics needs to be dynamic with creative services in providing digital requirements. New products introduction is now promoted via live streaming instead of paper publication, resulting product market trends to become shorter. The logistics company can no longer afford to work manually and independently to catch up to the fast-moving market requirements.
Under a single platform, it offers interconnected Domestic Land-International air transportation-eCommerce logistics-Warehouse services. Each logistics function has a standard operating procedure document, which is controlled by algorithms sent to the parties involved. The end-to-end workflow process is made easy and effective with integrated services and standardization digitize documents. To set up the process, information about incoming sales orders is automatically provided to sales and operations at the same time. Direct digital transmission of the finished operation document is made to the shipper for evaluation and the transporter accounting for billing preparation. Once the warehouse operator presses the finish button on their mobile device, the inventory level is updated automatically.
With a proper set up where functions and services are interconnected enable domestic and international information distributed seamlessly from one operation to another in real time. For example, during export shipment customs handling operation at origin airport when documents and final weights are verified and cleared by customs, the algorithm will automatically send an online notification and email pre-alert of incoming documents to the transporter at destination for them to download via email or online download menu with reference to work order number.
Transporter-at-destination can immediately begin pre-customs procedures to expedite shipment clearance at the airport prior to shipment arrival. With real-time response, it reduces shipment delays and unnecessary extra expenditures at destination. When a shipment is cleared by customs, an algorithm distributes information automatically to assign driver mobile devices with detailed shipment to pick up and delivery route to consignee final address.
The way we used to work with human and paper resources will not carry us to the next era. Updating the schedule of fleet rotation, pricing scheme, counting load level of incoming shipment into vehicle using excel format and paper are no longer sufficient. The final report takes longer because we have to repeatedly redo-and-review numbers and documents.
The Covid-19 pandemic not only led to global lockdowns, halted commercial activities, but our social and business life suffered for more than two years. Many new regulations and workforces were implemented that were difficult to adapt and created more expenses to our daily life. Now, we are gradually ready to travel and explore the world again. Many countries are open, airplanes are now flying, and the tourism and trades industries are now in revival mode. World countries are busy preparing and accepting incoming tourists. Example, Thailand, a country which generated more than 12% of GDP from tourism, now allows visitors to come by Air, Rail and Ocean without any covid checked. Travelers besides sightseeing and to relax, they also spend money to buy souvenirs to bring back home for loved ones, or to re-sell products in their home country at eCommerce sites.
We all recognize difficulties to bring parcel from foreign country back home, beside needing to pay extra charges of baggage overweight to airline, traveler/shipper needs to pay duty and taxes in their home country. Even worse, some travelers who don’t understand their home country’s customs regulations end up paying a penalty or items that need to be destroyed. It is a big challenge to even business/individuals who resell products at ecommerce sites. How do they buy a repeat order or buy newer items? Do they keep flying back and forth to purchase and hand carry products to their home country?
With more people now buying products online, eCommerce transactions are expected to grow at a higher rate than traditional brick and mortar transactions. People in the US or Europe who frequently search and shop for products made from other countries can instead buy products directly from where it is made, compare prices, make a purchase and tell a platform where to pick up and send to their home address. This is a new level of shopping experience with online eCommerce logistics that follow a moving market trend.
Currently more than 64% people are connected to internet with majority via smart phones to a world-wide-web. The large share of businesses and households owning computers in developed countries has exceeded 80% along with more than six billion smartphone users worldwide. Furthermore, in each country, tens of thousands of independent logistics companies and millions of SME (Small and Medium Enterprise) consumer shippers have presented a platform business model with an adequate quantity of potential users.
Working with an algorithm is like operating with a machine that operates continuously and produces results that are quicker, more accurate, and more productivity than human’s capabilities. The logistics industry sector with its linear and off-line business methods needs to transform manual, paper-based, and offline business procedures. Technology and algorithm have changed every aspect of our business and social life. Those who know how to Create-Design-Execute digital innovation, transform manual-to-become-autonomous, with limited human interference, are the ones who will become a winner in their industry. Written by: Eddy Syaifulah, is a founder of technology company.
