• Subject Name : General Management

How Digitization and Data Helped Meet Challenges Faced by Logistics and Transportation Business During Covid-19?

Introduction to Logistics Digitization and Transportation Businesses

Could COVID-19 be the black event that is forcing logistics and transportation businesses to rethink and modify their global supply chain model? Whereas the COVID-19 has stopped every other business, it has had the opposite influence on digitization. As the digitization of logistics and transportation businesses not only provides a solution for the crisis period but also the post COVID period. The webinar dated 19th September 2020, titled: Using past data to survive COVID-19 times strategies for logistics and transportation companies had three renowned personalities. The three personalities incorporated of Mr Sanjeev Verma (a member of Chartered Accounts of India; CFO of GATI, AFL, & FedEx), Mr Vikas Panwar (18+ years of experience in global logistics and SCM); Mr Apurva Mankad (CEO of WebXpress and Logi Cloud and having 20+ years of experience technology solutions and Transportation & Logistics Industry).

Key Highlights

The COVID-19 pandemic and its effect on logistics and transportation companies have drastically begun to rewrite the priorities of businesses. The key highlights of the webinar corroborate that pharmaceutical and essential commodities are some of the sectors that do not get affected but the cargo industry was much affected. In the words of Mr Apurva Mankad “logistics players associated with e-commerce have seen a massive demand”. In terms of digitization, “given the infrastructural development, e-commerce growing, technological development, movement away from captive to outsource model of shippers” is another reason to drive the logistics market. The major highlight of the webinar by Mr Sanjeev was highlighting e-way bills that majorly covers the digital movement of businesses. To be impacted by COVID-19, there were 1.31 million e-way bills in March 2020 and that further fall to 0.28 million in April 2020 that were generally of essential commodities but in August 2020, there was a drastic change that the e-way bills reached up to 1.59 million (both inter and intra-state market). Precisely, the key highlight by Mr Apurva also stated that “IT is the natural ally of logistics” and usage of cloud computing, application development, and maintaining servers would be advantageous for credit management, easy communication with customers, easy tracking of vehicles, generating accounting bills, e-payments, e-billings with vendors, and complete efficiency.

Literature Review

When the mobile era has started the keywords associated with transportation and logistics were “transportation management”, “sourcing of trucks”, and “warehouse and distribution services” but now the buzzword has changed to keywords like “network optimization”, and others. As truck operators, seafarers, crane drivers, loading and unloading workers, have a decline in terms of availability, can technology become an effective tool in terms of meeting the demands of the industry? (Jensen, 2020) The technology has been proved to be an effective tool in terms of de-stressing logistics workers because of the high demand in the industry. Technology provides workers with a benefit of completing tasks in a short period and with ease. “67% of companies which are technology-enabled are capable of fulfilling their half of their customers’ requests whereas the non-tech enabled companies were able to do only 30% on an average” (report, 2019). Herein, Mr Sanjeev Verma in the webinar also highlighted companies like both Zinka Logistics Solutions private Limited or Blackbuck and Fortigo Network Logistics Pvt. Ltd has digitized themselves in the pandemic situation and is remained at a competitive edge with physical automation as well as digital automation.

Personal and Professional Learning

To be the talk of professional learning the sole aim of digitization of the logistics and transportation sector is to produce more efficiency and cost reduction. Also, to change the typical structure of a network-based logistic company which is fixed or semi-variable. However, in this COVID era, various companies have already attempted to convert their fixed cost to a variable one. Several approaches were being used for cost reduction such as optimization of the network through route, negotiation for rent waiver of two months, negotiating with vendors for credit period, and the biggest one is the sacrifice of employees to reduce their salaries by 15%-30%.

As we are about to move into 2021, new technologies have been introduced into the logistics industry which makes it possible to easily access and comprehend data, access to quicker service, and better communication. Moreover, Artificial Intelligence (AI) has also become a colossal trend as it can lower logistics costs by at least 5 per cent (Economist, 2020). At a personal level, listening to so many examples of overall SMEs or other big giants to get a competitive edge as using digitization in terms of logistics in COVID times, I would like to end my learning with the quote of Fred Smith; founder of FedEx ‘the information of package is as important as the package itself’ so, as with technology.

Future Outlook

Every year, software, technology, and digital platforms will continue to evolve, prompting the logistics sector to adjust to these changes. For the logistics sector, the introduction of big data, GPS & sensors, cloud computing technologies has created a huge advantage. However, not all logistic firms have utilized it. Data-driven decisions are crucial to attaining success in supply chain processes and activities as without it logistic companies can fall behind. Change is inevitable. Hence, remaining up-to-date with relevant and new technologies can bring success. 

References for Logistics Digitization and Transportation Businesses

BIBirbal. (2020). Logistics Transportation Webinar " 19th Sep 2020. Retrieved from https://www.youtube.com/watch?v=Dz_fhleDEFo

Economist, T. (2020). An understanding of AI’s limitations is starting to sink in. The Economist.

Jensen, L. (2020). COVID-19 to accelerate digitalization, automation of container shipping. joc.com.

the report, t. t. (2019). 2019 Logistics Tech Trend Report. www.cdn2.hubspot.net.

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