Transportation and coronavirus have been getting a lot of attention lately. The global supply chain is becoming more complex due to increased regulations, trade wars, cross-border commerce, and most recently, the impact of coronavirus. When the coronavirus pandemic hit many industries and economies came to a grinding halt. However, transportation solutions have generally been a bit more insulated as goods still need to move from Point A to Point B. This is especially true of essential items such as grocery and personal care products. With capacity constraints, visibility into transportation is becoming more important than ever.
I am finishing up my market study on Transportation Management Systems and kicking off a new study on Transportation Execution and Visibility Systems. Talking with executives at these types of suppliers is a key part of the process. I recently spoke with Matt Elenjickal, CEO at FourKites, about the global transportation visibility market, taking a deeper look into transportation and coronavirus. FourKites is a predictive supply chain visibility platform, delivering real-time freight visibility and predictive analytics to its global network of shippers, carriers, brokers and 3PLs.
Transportation and Coronavirus: Visibility
There are many factors that have historically driven growth in the transportation management and transportation execution markets, such as a strong ROI, the growth of e-commerce and omni-channel, and the emergence of SaaS solutions. However, in my discussion with Mr. Elenjickal, we touched upon a different growth driver, especially in the visibility space: coronavirus.
Mr. Elenjickal said that “supply chain disruption caused by COVID is leading to the need for more transparency. It is one thing to know where the trucks are, but what am I going to do with that data? Who do I contact if something goes wrong? Customers are looking for visibility across the entire supply chain; they want to know where their products are across the entire network at any time. This could be in a warehouse, on a truck, or in the yard. They even need to know where an item is at the SKU level, and this is not easy to pull off without years and years of research and development. The public perception is that these visibility solutions seem very simple. But they are not. They require density and a network to make it happen. Solutions that do not have the density and a network will not last.”
Visibility software has always been important for improved ETAs, which can reduce dwell times and help to eliminate empty miles. But as Mr. Elenjickal noted, this is becoming more important during the current coronavirus pandemic. FourKites serves companies across all industries, with a major presence in the fast-growing markets of essential items: CPG, food and beverage, essential manufacturers, and retail. In the first few days of the pandemic, the company saw a spike in volume, with their customers pushing for increased visibility into where their shipments were.
When looking at where global transportation and fulfillment will go in the future, we discussed the “new normal” quite a bit. As I’ve written about before, the post-COVID world will be very different than it was just a few short months ago. As economies begin to open, restrictions abound and are likely to remain in place until a vaccine is created and administered across the country. In this post COVID world, the supply chain will continue to be a key cog in ensuring that the economy can function, and home deliveries will be the new normal for more and more of our retail needs.
Mr. Elenjickal highlighted a few changes he sees as part of the new normal. First, there will be less paper-based processes; instead, everything will go digital, including proof of delivery and bill of lading documentation. There will also be heightened collaboration between manufacturers and retailers, all of which will take place digitally, in real time. Mr. Elenjickal also sees a lot of demand for last mile to make things completely touchless. The post-COVID logistics workforce will be very different, as jobs that were always done on site have shifted to remote work. This likely will remain the case for the foreseeable future.
The impact of coronavirus on the global supply chain has been significant. The flow of goods slowed considerably as consumers looked to stock up on essential items. The result has been an increased need for real-time visibility solutions within the transportation market. However, these purchases are facing increased scrutiny in these uncertain economic times. As Mr. Elenjickal said, “Non-essential businesses face much higher levels of scrutiny during this time, as many stores remain closed, so visibility becomes a C-level decision. But for essential manufacturing companies, the discussions are more around how much they are committing to visibility upfront.”
With transportation solutions being a bit more insulated, the rebound could come quicker than other industries. Either way, when it comes to transportation and coronavirus, visibility solutions will continue to be a critical component.