This Transportation & Logistics (T&L) Insights series is based on research by Levvel, who joined the Endava family in 2021. The team surveyed over 500 US-based companies who procure transportation and logistics services internally and externally to get their views on their challenges, needs, and use of digital technology solutions.
While companies often perceive technology innovation to mean things like high-end robotics, artificial intelligence, and fully autonomous vehicles, there are many elements in the supply chain that can be modernized without requiring great effort or cost, while still providing the competitive edge T&L companies are looking for. In this series, we will present current industry challenges and how digital technology can help reduce friction, enhance efficiency, and provide a better experience for businesses and their customers.
THE CURRENT STATE OF THE SHIPPING, CARGO, AND LOGISTICS PROCESSES
Digital tools are transforming the shipping and cargo process and creating new expectations when it comes to organization and efficiency. But new technology uptake has been uneven. According to our research, over 40% of companies are still hampered by their legacy methods, including the use of paper, phone calls, and fax machines to handle cargo reception and verification.
When cargo is shipped from a manufacturer to a warehouse, a driver hands over the goods to a consignee on site who is then financially responsible for the receipt of the shipment. That may sound simple, but it actually involves several transactions between the driver and facility management, including:
- Choosing the dock to unload the cargo
- Conveying that location information to the driver/carrier
- Verifying the contents of the cargo and assuring it matches the details on the Bill of Lading (a document that includes the type, quantity, and proper destination of the goods) issued by the carrier
- Securing the Bill of Lading for future reference and inventory
- Unloading the cargo
These steps need to be accomplished quickly and precisely to keep the supply chain moving.
THE NEED TO REPLACE LEGACY METHODS WITH MODERN TECHNOLOGY
While technology such as electronic data interchange (EDI) systems, SAP, and other integration workflow engines can help streamline this process, most companies are still using legacy methods that are slow, costly, and prone to human error.
Problems start before the cargo is even en route: 13% of the companies Levvel surveyed said they have no visibility of what is being shipped until it arrives at the warehouse. Only around 25% of companies use specialized software to convey shipment information – with phone calls being the next most frequent way of communicating, followed by email, paper, and fax.
As you might imagine, paper documents easily get lost – or even forged! This makes planning, record-keeping, and the efficient use of warehouse space very difficult.
WHY CURRENT SHIPPING ISSUES REMAIN UNADDRESSED
There are two main reasons why such vital processes are still relying on decades-old methods of communication: cost and labor. Digital upgrades may, but don’t always, require a significant financial investment upfront. And they often involve upskilling workers in a labor force with a high turnover rate.
This helps to explain why even companies that have adopted some digital solutions have done so in a piecemeal fashion at best. Levvel’s survey found that a mere 27% of the participating companies use EDI systems, SAP, or other integration workflow portals to optimize data exchange throughout the supply chain.
Even crucial legal communications like the Bill of Lading – which acts as a title of goods – still exist in the form of a simple sheet of paper for most companies. Only 41% of those surveyed provide electronic versions of the single most important document in terms of ownership and liability.
OPTIMIZING THE WAREHOUSE RECEIVING PROCESS
Electronic Bills of Lading (eBL) are a good example of a digital upgrade that can increase the speed and accuracy of shipping and receiving cargo. An eBL system allows both parties to exchange information in a timely way that isn’t susceptible to paper forgery.
Yard Management Systems (YMS) are another tech upgrade that can make cargo reception more efficient. These systems enable facility managers to easily communicate with drivers before or as they arrive. Using text messages, drivers are directed to the appropriate unloading dock rather than relying on phone calls or pre-arrival paper instructions that can be delayed or changed at the last minute.
Read our other Transportation & Logistics Insights articles to learn more about how technology can help alleviate industry challenges.