The supply chain’s digital transformation

The supply chain’s digitalization has been underway for at least three decades. That’s not surprising. Moving freight, especially moving freight internationally, has always engendered complexities that demanded technological solutions. Technology is simply in the DNA of the business, and always has been.

However, through most of the technological history of the supply chain, tech existed in silos directed along highly specific avenues of problem solving. If it was a warehouse problem, it was a warehouse solution. If it was an international freight forwarder issue, the solution was designed for forwarders. If it was with a terminal or ocean carrier challenge, or rail or road, the solution was designed for the problem.

Software wasn’t a service, but the mechanism to solve a specific set of problems. With the advent of the worldwide web in 1989, the digital toolbox grew exponentially but much of the early focus was still siloed. That began to change as the business began evolving technological-based enterprises. It seemed suddenly that a company like C.H. Robinson wasn’t a trucking firm, freight forwarder, or a warehouse operator but something new - a 3PL, a third party logistics provider. And a great deal of that providing was supplied through the deployment of web-based technology. Now we have not only 3PLs, but 4PLs, 5PLs and beyond [up to 10PLs by some measures], each provider adding a layer of technology, and in many cases digital technology, to the totality of the service.

The Brave New World of Digitalization

Despite the fact that nearly every employee working in the industry owns the omnipresent smartphone, digitalization is far from being as industry-wide as one would expect.

Recently, Magaya, a provider of logistics and supply chain automation software, released a State of Digitization in Freight Forwarding. Magaya based the report on a survey completed by 70 freight forwarders, 3PLs, and NVOCCs of varying sizes from around the world. And Magaya summed up their findings as “The pace of digitization in freight forwarding has accelerated since 2020 with companies increasingly investing in technology solutions to streamline operations. However, the industry as a whole still has a long way to go to capitalize on evolving technological advancements, with many organizations still relying heavily on inefficient manual processes.”

It would seem odd, that repetitive “manual processes” would still be feature of the global supply chain — a movement that is often portrayed like a phalanx of freight moving with conveyor belt efficiency from one part of the world to another.

For example, the report noted, “Automation and digitization: 24% of respondents still have completely manual processes, as in no ERP or specialized freight forwarding software.”

Still, in fairness to the industry, the widespread digital innovation led many practitioners to create their own WMS or TMS systems. And moving on from legacy systems was often both expensive and burdensome to integrate into their operations. With the adoption of portals and platforms and the SaaS business models [which has expanded to other fields such Raas –…