Last week, I attended the annual Descartes Systems Group User conference in sunny West Palm Beach, FL. This was my second time attending the event, and once again, it did not disappoint. This was the largest event yet for Descartes, with well over 400 attendees at this year’s conference. I managed to catch some really interesting sessions featuring Descartes employees as well as some great case study sessions, including Clean Harbors, BC Sands, and CVS. My main focus was to listen to Descartes customers to see how their needs are changing, and how Descartes is enabling them to succeed (I’ll be writing more about this over the next few weeks). So it was fitting that the theme of the conference was “Logistics Excellence: Now and in the E-Future.” It was a compelling theme based on how the industry is changing, and what these changes mean for the future of transportation.
During his keynote address, CEO Ed Ryan talked about future trends that are shaping the business. He outlined a series off trends that customers ask him about. The funny thing is that the trends that he is asked about the most are the ones that have the least impact on businesses today. Specifically, he gets a lot of questions about drone deliveries, and when that will become a viable delivery option for consumers. He also gets asked a lot about driverless trucks, and when they will be on the road making deliveries. Neither of these technologies have much bearing on the business today, although they do pose potential impacts in the future. The trends that have the biggest impact today are e-commerce and omni-channel, as the Amazon Effect makes waves in the industry.
Descartes is making investments to support the future, and Ed Ryan pointed out a couple of key areas where customers can be better prepared for the e-future. First, the company has expanded its smartphone solutions. Now, they can get applications out to drivers across multiple platforms, enabling drivers be more productive and rely less on paper-based work, including proof of deliveries, invoicing, signature capture, and overall improved communication. The company has also worked on ELD-compliant telematics, enabling customers to have a better understanding of where their drivers are compared to where they should be. The company has also improved denied party screening features and added more countries for security and customs.
Ken Wood, EVP of Product Development, gave an update of product innovations and improvements. These innovations are all geared towards the e-future. To that end, Ken pointed out that e-commerce is affecting all commerce, and the impact can be felt everywhere. Commerce is becoming more global in nature, and companies need to be prepared. A few highlights of innovations across products include, but are not limited to:
- Routing, Mobile, & Telematics: enhanced on-demand route optimization, driver vehicle safety-check mobile, and, as mentioned above, ELD-compliant telematics.
- Transportation Management: enhanced optimizer, expanded carrier compliance, and a new workflow automation engine.
- Customs and Regulatory Developments: new union customs code rollout, expanded EU customs procedures, and the launch of a global compliance framework.
During the conference, I caught a few sessions that were very interesting, and showed the importance of making changes to be ready for the future. Two of those sessions were presented by Chris Jones from Descartes, both of which looked at benchmark data around transportation management and home delivery. The benchmark survey consisted of 220 respondents across a diverse set of industries, including 3PLs, discrete manufacturing, wholesale / distribution, retail, and others. One of the more interesting points he presented looked at how companies view their TMS – either as a competitive weapon or a basic necessity – and how they respond to change. Those companies that viewed it as a competitive differentiator also viewed TMS as a contributor to revenue growth. These companies were also significantly more likely to invest in technology, while the ones that view TMS as a necessary evil looked mostly at ways to cut costs. Not surprisingly, the other group of companies that are looking to invest in technology are the top performers. Chris Jones made the connection that top performers and competitive differentiators have top management that puts a higher strategic value on TMS, and that is driving results and therefore, increasing investments.
During the home delivery benchmark session, he made the point that revenue growth is the prime justification for home delivery. And this is where there is a lot of misunderstanding in home delivery. While the final mile is very expensive, charging premium prices for better delivery timeframes and windows is a way to offset the associated costs. In fact, enough customers are willing to pay a premium to get an item exactly when they want, which is actually a new revenue stream for many companies. As he stated, “time is money and customers will pay more for discernably superior delivery service.”
In conclusion, the Descartes Evolution user conference took a detailed look into how the future of transportation is changing and evolving, and what customers need to do to be prepared for the e-future. E-Commerce and omni-channel will continue to change the retail landscape, but more and more manufacturers are also delving into direct to consumer shipments, which means that they will need to meet these changes head on as well. Descartes showcased how their different solutions are evolving with the overall commerce trends, and look to be in a good spot to help their customers enter the e-future.