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The Amazon effect on your business

The Amazon effect on your business

At the CES Technology Show in Las Vegas, Continental showed off its Cube driverless shuttle featuring robotic dogs taking parcels from the vehicle to the customer’s front door¹.  Four legs are better than wheels for getting around pavements and obstacles. What is the world coming to? What is the Amazon effect on the transport industry? How might the future look?

The Amazon effect

Thanks to Amazon, customers (both B2C and B2B) have greater expectations.  They demand virtually immediate fulfilment of their orders, expecting delivery within the next day or two. This effect is forcing change across transport, logistics and the whole supply chain. This ever-moving situation is both a challenge and an opportunity for those trailer fleets that are willing to face the changes head-on. (source: Forbes)

The Effect of the effect

Among many different perspectives of how the Amazon effect might translate into consequences for the trucking and logistics industry is the vision elaborated by PwC’s Strategy& in its Global Truck Study 2018. It forecasts that “By 2030, trucking and logistics will be an ecosystem of autonomous vehicles directed by a digitized supply chain, combining driverless cable trucks and delivery hubs staffed by robots.”

In its very digital- and automation-driven view of the future, Strategy& highlights three conclusions:

  • Trucking logistics costs will decrease by 47% by 2030, mainly through reductions in labour.
  • Delivery lead times will fall by 40%.
  • From 2030, trucks, thanks to their autonomy, will be on the road 78% of the time compared to the current European average of 29%.

Strategy& also predicts that a more digitized supply chain will reduce administrative overhead, cut out time-consuming inventory and decrease insurance costs, bringing savings of up to 41% by 2030 compared to today’s supply chain.

Future trends

Innovation in transport and the supply chain does not stop at electric and driverless vehicles, the use of AI and predictive analytics to improve driver safety and retention or indeed better online freight brokering services to maximise full trailer loads or robotic dogs to deliver packages over the last few 100 metres. There are plenty of other interesting concepts being developed. The trends include:

  • Paperless for real-time information– The increasing digital automation and robotization of processes across the supply chain enable fleets to bring down their costs, accelerate their responses to new business opportunities and provide information to customers about deliveries in a quick and precise way. Abhinav Singh, a director at Intelenet Global Services observes that too many trailer fleets and other players in logistics rely on manual, often paper-based processes. In an era where providing real-time, accurate data can generate increased customer satisfaction and commercial benefit, logistics firms including trailer fleets need to streamline and automate their processes and improve the efficiency of their operating models to compete in the Amazon era.  (source: TTNews)
  • Going underground–Several commentators in a TTNews article entitled “Reimagining Trucking” believed that underground tunnels similar to those being dug by the Boring Company for transport between cities for pedestrians could be adapted to accommodate freight and take more trucks, containers and cargo off the road network.
  • Driver pool– Brittain Ladd, a supply chain consultant, proposes assembling a consortium of truck fleets that would work with a shared pool of drivers to transport cargo between two defined locations. The drivers would be paid an hourly rate instead of a per-mile rate. Ladd believes that this system could have transported all the loads carried in 2017 with two-thirds of the trucks. (source: TTNews)
  • Rethinking order fulfilment– Amazon is among the companies showing the way in order fulfilment. Amazon is crowdsourcing deliveries to external freight companies, delivering to car trunks, Amazon lockers, people’s private apartments and experimenting with drone delivery points. It is also developing an Amazon franchise delivery business model for which companies can apply. If you are operating on a large scale, maybe you should mirror Amazon and consider going “intermodal”. For example, Amazon has expanded its trailer fleet, created Amazon Air with 40 aircraft and made some initial moves into ocean-going freight. (source: “The Rise of Amazon Logistics” – TTNews)

TIP trailer rental and the Amazon Effect

TIP trailer rental enables you to gain flexible access to trailers whether you need one to fulfil a one-off delivery or you have signed a new contract with a customer for a long-term commitment. The flexibility of our rental contracts gives you the ability to use the best trailers and latest trailer technology without having to bear high upfront purchase costs and the overheads of ownership.

Customers renting trailers through TIP Trailer Services can benefit from preferential rental terms to increase their trailer fleet or reduce its size as demand fluctuates. TIP trailer rental customers also enjoy the benefits of TIP’s maintenance and repair services through its extensive Europe-wide network of workshops and mobile servicing vehicles. To find out how we can help your fleet take advantage of the Amazon effect with TIP trailer rental, please contact us via this TIP contact form.

 

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¹ Source: EuropeAutonews

From click, to pick, to pack, to deliver

 

From click, to pick, to pack, to deliver

At the beginning of 2017, a six-year old girl in Dallas, Texas asked Alexa, Amazon’s personal digital assistant, “Can you play dollhouse with me and get me a dollhouse?” A little girl’s request for someone to play her favourite game with resulted in Alexa ordering and delivering a €160/£140 KidKraft doll’s house and, inexplicably, 2 kg of sweets. “How awesome!” the little girl must have exclaimed when the parcel arrived. “What on earth has happened?” her family must have wondered. And journalists across the world started contemplating something we now take for granted: online purchasing and the complex supply chain which underpins it.

So, what are the stages in online purchasing? And where do trucks delivering goods bought online slot into that supply chain?

 

The magic “buy” button

As customers browse online at popular European ecommerce sites such as Ahold, Ocado, Otto or Vente-Privée, merrily filling their virtual shopping bag with goodies, it all seems so simple. Fill your shopping basket, click the magic “buy” button, tap in a few payment and delivery details, press the “confirm” button. “Hey presto”, your work is done so you just sit back, relax and await delivery. But what happens next? Being a customer, you simply expect the goods to arrive fast by parcel truck.

Converting the virtual shopping basket into physical items in the customer’s home is a complicated chain of events demanding plenty of technology and regular human intervention. Let’s take you for a ride: from click, to pick, to pack and deliver.

  

From click to pick to pack

The buyer places the order and the retailer receives it. Algorithms swing into motion and direct the order to the warehouse situated closest to the customer’s destination. Checks are made to confirm the product is in stock in the warehouse. Just like a real shopper in a real shop, inside the warehouse, there is a human ‘picker’ who picks up the product(s) and delivers it(them) to the human ‘packer’ at the end of the process. Handheld devices scan the order to locate the products then direct the picker to take the optimum route around the warehouse to fill the order as efficiently as possible. Orders are sorted and prioritised according to “same day”, “next day” and “standard delivery”.

 

Robots’ zone

Companies like Amazon are investing in artificial intelligence for warehouse systems and robotics technology for automated robots and drones. Robots can help with tasks such as sorting and moving goods around a warehouse and automating the collection process. Delivery by drone is also being trialled.

 

Trucking to the letterbox

Products are then packed, weighed and sorted into piles by destination. Trucks collect the parcelled goods to take them to the delivery centre nearest to the customer. Before dispatching to the trucking company responsible for the final delivery, there are several checks made. This includes checking again that the products collected match those ordered by the customer. Package weight and dimensions are confirmed to avoid disputes with trucking companies. Then, to facilitate real-time parcel tracking, route optimisation and mapping technology is used to ensure that the parcels reach their destination. The products are then collected by the final mile trucking companies and delivered to the customer.

 

Online shopping is changing the supply chain rapidly. Make sure to have enough trailers on a stand-by mode. TIP Trailer Services can help you with extra trailers or to update your trailers with ‘state of the art’ fleet management tools. Contact TIP for more info.