Industry’s real disruptors

John Manners Bell, Chief Executive Officer of transport intelligence, gives his views on the factors driving change in the air cargo industry.

 

What does disruption mean in the context of the logistics industry?

Disruption is occurring in every part of the logistics industry as traditional business models are being challenged by new thinking, often emanating from outside the sector. e-commerce has transformed fulfilment and last mile delivery; digital freight platforms are having a major impact on both road and freight forwarding markets and automation is transforming the warehousing industry. new technologies are becoming more affordable even to the smallest companies, facilitating the growth of online platforms and improving supply chain visibility, through the use of low cost sensors, for example.

Companies like to say they are disruptive, but who are the true disruptors?

There is a lot of confusion in the industry over the difference between innovation and disruption. True disruption will mean new business models and processes, enabled by digitization, for example, as opposed to improvements in process efficiencies. take the forwarding sector. The many digital marketplaces being established offer ways in which forwarders can improve the quoting and booking process, reducing the time and cost of this part of their operation as well as improving customer service. however, digital forwarders that have built their businesses from scratch around new technologies and have the potential to seize market share from the incumbents are the real disruptors.

What is more disruptive? New technology or new business models, or maybe the two go hand in hand?

Presently it is the advent of new technology that is largely responsible for the facilitation and proliferation of new business models. even containerization in the 1950s was underpinned by developments in shipping, crane, and container technology, albeit mechanical rather than it. Many entrepreneurs are looking to apply technologies developed in non-logistics sectors (such as consumer electronics or even gaming) to logistics problems. the use of smartphones, for instance, has provided enormous processing power, connecting sMes and individuals to logistics platforms.

Why is the logistics industry so reluctant to embrace collaboration and share data?

Obviously, there are many commercial sensitivities around the sharing of data and this is one of the problems of a supply chain that involves many parties – some collaborating, some competing. security and data protection are also big issues. supply chain visibility is fantastic when the right parties have access to the data, but if it falls into the wrong hands, there is enormous potential for criminality or breach of confidentiality.

Blockchain – is it just a buzzword?

People are very excited about Blockchain as it provides a way of ensuring supply chain integrity and visibility. My personal view on this is that in a few years’ time, the technology will have become completely accepted. Obviously Blockchain is not a silver bullet for all problems found with supply chain technology. however, it does have great potential to resolve some practical problems that have been around for years such as supply chain visibility and provenance.

What will the future look like? Who will be the winners and losers?

It is going to take a huge effort by the incumbent logistics providers to fight off new market entrants – legacy technology systems provide stability but cannot meet the challenges of the new market environment, especially customer expectations. amazon has already transformed fulfilment and last mile. if freight forwarders are not able to evolve in the new digital environment, they will find that they will lose parts of the ‘first mile’ market to aggressive e-commerce platforms.

What made you join the logistics industry and what kept you in it?

I had no choice really as logistics is in the blood! My father established an international freight company in the early 1970s and I have been hooked ever since. the sector has always been exciting, never more so than today.

How can we encourage the next generation of logistics leaders to join our industry?

Very few young people make a conscious decision to choose the logistics industry, which is a shame. More has to be done to promote the career in schools whilst at the same time changing its perception as an unattractive option. this will be essential as the industry becomes more focused on technology, automation and knowledge capital, rather than the fulfilment of routine, manual and low value roles.

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