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Transportation management technology evolved throughout 2016. Our predictions focused on using new technologies and best practices to correct inefficiencies and problems. But, the true scope of change and focus went a bit further than expected. Let’s look at how supply chain entities have tapped the untold resources of the Internet of Things (IoT), where processes stand with the FAST Act and why collaboration became king.

The IoT Became a Core Concept in Transportation Management Technology

Companies spent more than $7 billion on IoT-based technologies. This aligns estimated spending over the next three years, as shown in this graphic in Business Insider.

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Increasing urban mobility and accessibility of shipment routes are driving forces of IoT use in transportation management technology. Radio frequency identification, GPS, acoustic sensors, near-field communications and more are combining to give transporters more information than ever about the status of a given shipment. This translates into greater profits, more insights into where things are going wrong and stronger visibility. In addition, customer service levels have improved as companies have been able to boost operational times to nearly 100 percent around the globe, reports Jenipher Wang, Ph.D. of the WIOMAX SmartIoT Blog.  

Most of the IoT’s benefits derive from the analysis and use of big data. Per Cyzerg Logistics Technology, the amount of available data doubles every two years. This graphic shows how extensive the “mountain of information” will be in the next few years.

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Clearly, the power of the IoT is only going to increase.

Implementing the FAST Act Enabled More Shipments and Fewer Delays.

Passage and implementation of the Fixing America’s Surface Transportation Act (FAST Act) was supposed to give America’s shippers and carriers an opportunity to boost revenue and improve capacity through federal funding. However, 2016 saw a slight diversion from this belief. According to Representative Sam Graves, Chairman of the Subcommittee on highways in the House, the FAST Act does not provide enough funding to properly repair highways within the next five years. Consequently, Graves suggests creating more toll roads, private investor-funded highways and imposing a fee for the number of miles traveled per vehicle.

Though each of these options is possible, it would mean adding new burdens to low- and middle-income families. Paired with the buzz over a Trump administration and his promises to cut taxes and cost-of-living, any of these solutions will likely be met with turmoil and hatred. So, supply chain entities may need to start thinking about the possibility of a bottleneck in the FAST Act funding. In other words, holding fundraisers or even raising community awareness might help to spur additional funding for improving America’s highways.

There are other solutions too. According to Supply Chain 24/7, the U.S. Department of Transportation (DOT) could continue providing and managing the Highway Trust Fund, coordinate freight advisory committees with state freight planners or request extensions or additional sources of funding under the FAST Act. Ultimately, U.S. roads make up more than 4 million miles of roadways, reports PLS Logistics, and just maintaining a project of that scale will continue to require funding long after the FAST Act expires.

Collaboration and Inter-Management Brought Profits Across the Industry.

A disruption in one shipper’s operations can cause a domino-effect in the industry. Transportation management technology can avoid these issues by focusing on collaboration, which is why collaboration became the new normal in 2016.

Collaboration leads to optimization of resources across the industry. As explained by Artur Zgoda of Talking Logistics, common processes, decisions and time horizons encourage companies to work together for common goals. Although this might seem like “helping the enemy,” the benefits help each company independently.

For example, company A outsources auditing and IoT analysis to third-party logistics provider (3PL) A. Both companies get a profit share of something they would not have otherwise could achieve. Essentially, companies can do more when working together. The following graphic, created by Lanetix, further explains how collaboration plays into procurement, integration and subsequent activities in transportation management technology.

transportation management technology

Meanwhile, collaboration leads to better visibility as supply chain partners work to double-check one another’s work. This results in better outcomes for the companies, collaborating entities and end-users. According to Rich Katz of Talking Logistics, increasing visibility in a company leads to more than $300 in savings per shipment. So, collaboration will continue to dominate 2017.

The Big Picture.

Supply chain entities will be looking for new ways to cut costs and boost production in 2017. However, the fundamentals of cost savings and transportation management identified in 2016 will continue to be driving forces this year. Instead of looking for the next big thing, companies should double-down on their efforts to take full advantage of collaboration, new funding sources and capabilities within the IoT. Ultimately, these few decisions could lead to universal improvements in the industry, including fixing some of its greatest problems, such as the growing driver shortage.