Smart trucks bring opportunity and loss to supply chains, analysts say

Smart trucks bring opportunity and loss to supply chains, analysts say

Analysts say smart trucks bring opportunity and loss to supply chains

Traditional logistics and freighter supply chain operations are set to be disrupted by the advent of smart trucks, such as those designed by Uber, a recent report from analyst house Frost and Sullivan suggests.

In the analysis, Developments in the Global Connected Truck Market Shaping the Future of Logistics, the firm outlines a future in which 35 million trucks, ranging from the partially connected to the fully autonomous, will feature in global supply chains by 2020.

The market is therefore projected to grow at a compound annual growth rate (CAGR) of 40.9 percent, garnering $20.5 billion in the process, as the trucking industry becomes smarter, more efficient and, consequently, more productive.

However, this transformation from analogue to digital also poses problems for some in the industry.

Smart trucks bring opportunity and loss

“The logistics industry is expanding to include unconventional players, resulting in innovative and unique value-added services,” said Frost & Sullivan Mobility senior analyst, Krishna Chaithanya Bathala.

“As logistics service providers (LSPs) shift from mere outsourced logistics to more non-asset-based and end-to-end, integrated, demand-driven logistics, with an extensive e-business focus on all logistics operations, technologies such as real-time data, sensorization and intelligent autonomous machines, will accelerate the transformation of the logistics and supply chain industry.”

That sounds very positive; however, Bathala also claims that “by 2020, IoT use cases characterized by advanced machine-to-machine capabilities and sensor fusion will make the traditional supply chain models redundant.”

“The shift away from vehicle-centric platforms to IoT-based platforms that connect vehicles, warehouses, and infrastructure, is expanding opportunities for key ecosystem participants,” Bathala says, but that leaves traditional players trying to catch up to the technologists with the capability to support smart trucks.

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Partner power

Frost and Sullivan is indicating that strategic partnerships between OEMs and LSPs are now critical to remain competitive and garner growth opportunities in this evolving market.

The firm states that telematics, which includes real-time traffic, tolling, routing and scheduling, parking, freight aggregation, as well as weigh station bypass, will become the key revenue driver for logistics companies looking to get value from their supply chains.

To extract this value, Frost and Sullivan believes LSPs and OEMs must:

  • Develop a brand-agnostic open platform: A single holistic platform with core fleet management solutions (FMS), value-added services, and back-office management software, such as transport management systems (TMS) and enterprise resource planning (ERP), will enhance operational efficiencies;
  • Quickly identify and implement new services through collaborations with start-ups;
  • Develop a cloud-based logistics control tower: A central hub through which the entire ecosystem can capture data across various stages of the supply chain and offer stakeholder-specific dashboards for custom viewership;
  • Ensure data security by partnering with network and data security vendors.

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