The COVID-19 pandemic is an unprecedented global event. Across the world individuals, organisations, and governments face challenges in every facet of their lives and every part of the economy.
Many of the solutions are apparent. We all understand social distancing, staying at home and washing our hands.
In the business world, the challenges and solutions rapidly scale. The complexity of interactions and dependencies grows geometrically as we add moving pieces by involving suppliers, customers, and third parties.
Logistics was thrown in the deep end of COVID-19. Impossible to shut down, and critical in all areas from healthcare through to deliveries of toilet paper, logistics professionals grapple with daily unforeseen challenges. This is further complicated by the fact we are primarily a person to person industry, often reliant on people working in proximity for extended periods.
On the other hand, we live in the 21st century. Developed nations have access to technology that was science fiction decades ago. There is an infinite array of software solutions and physical tools we can choose from.
If anything, there are too many options. One of our challenges is choosing which to use.
So, what has been the impact of COVID-19 on new technologies in logistics? How will the industry thrive in The New Normal? And most importantly, what tools are available to ensure that we are better prepared next time we experience an unprecedented event?
How well prepared were we?
“Most businesses have a disaster or recovery plan for various areas, in most cases, you are planning for something that “might” happen.” – Craig Ryan, GM, Tranzworks
In logistics, there is a dichotomy between technological preparedness and cultural preparedness.
As an industry, we have largely moved away from pen and paper systems, and many organisations have already stepped up to cloud solutions. Logistics software technology for companies with multiple branches and divisions was designed to manage a distributed workforce, various time zones, and variable demand.
Physically, there are handheld devices for drivers to capture proof of delivery information, telematics devices in vehicles to monitor speed, g-forces, and driving conditions. These technologies should enable faster and safer deliveries.
Welcome to COVID-19.
The pandemic struck in the lull between Christmas and Easter. This is a time when many companies schedule changes, improvements, technology deployments and general business re-engineering.
As news trickled in from overseas about a potential new version of SARS or MERS, government guidance was mixed, and rumours and conspiracy theories outweighed facts 10 to 1. Unable to categorise the threat, most logistics companies continued with a business as usual approach.
“I don’t think anyone was prepared for this type of situation however our small transport business had operational standards that we have a contingency driver for every ten full-time drivers. That practice comes at a cost but saved us as our delivery volumes went through the roof.” – Mohan Perera, Founder, Zion Group
Some businesses had inbuilt operational and technological preparedness. This may have been an existing roster of contingency drivers, or adoptions of distributed communication technology such as VOIP phone systems. It is common to see businesses of all sizes with offshore call centres, distributed data entry capability, and automated processes to handle routine events.
Amazingly, some of the largest companies were the least prepared. Disaster Recovery plans existed but were either out of date or just irrelevant. With cost-cutting being a significant driver in corporations, due in part to multi-national takeovers, mergers, and shareholder demands, resilient and redundant systems have been pared back to the absolute viable minimum.
What technology problems do we see that would not have arisen without the pandemic?
As with every other industry, logistics companies have seen that the NBN for many is not capable of carrying the load. Homes and small businesses that were scraping by with speeds barely fast enough to stream Netflix and play Fortnite are now having to cope with multiple users in global Zoom conferences and dashboards heavy with data and 10-second refresh rates.
Fast, reliable internet has quickly gone from being a nice thing to have, to absolute business necessity. Sure, 5G is coming, but the rollout is slow, expensive, and right now focussed on the CBDs and major commercial centres. In The New Normal, these are the parts of the country which have seen the most significant reduction in demand.
Tools such as Microsoft Teams, Zoom, and DocuSign have become commonplace, and the chasm between bringing together a team on an adhoc basis, and a minute by minute need for reliable internet has created problems in team cohesion, and in some cases just keeping things moving.
Companies running multiple non-integrated software systems installed on desktop PCs in offices are now having to manage a range of at-home devices and operating systems. Not only is it hard sometimes just to get the software running, but there are also significant cybersecurity risks. How do we stop a customer service person at home from opening an innocent-looking email from a vendor? How do we contain the outbreak of a software virus?
And these are just the internal challenges. Logistics companies are now exposed to the real world. Everyone is talking about freight.
Reliable parcel tracking and interactive delivery management have now been fully exposed for everyone to see. – Ian Kerr, Postal Hub Podcast
The increase in home deliveries caught everyone off guard. According to many reports, April 2020 was bigger than Christmas 2019, the previous busiest time of all time. This creates challenges everywhere from the e-commerce front end to inventory control, warehouse management, and along the last mile. Some customers are used to receiving their purchases 2-3 days after ordering. Sometimes they are now lucky if the confirmation email arrives that quickly.
Overall, the biggest problems seem to be a lack of infrastructure, a lack of preparedness, and a lack of warning, all combined with the fact everyone else was facing the same problems at the same time. The shared resources, consultants and on-demand teams were now very much in demand.
Which solutions, implemented to deal with the pandemic, will endure if we return to business as usual?
“Microsoft Teams, Zoom, DocuSign will all become commonplace” – Matthew Purvis, Managing Director, Managed Business Consulting
It has not taken long for Zoom to become a verb. The remote conference, the morning stand-up, the daily team check, are all much more efficient if we don’t have to have everyone in the same place physically. As in other industries, companies are keen to explore future cost savings in reduced office space and perhaps turning car parks into something more useful.
Sales reps are having a ball. The number of customer welfare calls and new business meetings that can be held in an 8-hour stretch has increased tenfold now we do not have to crawl around at 20 miles an hour in traffic. New skills are being developed, such as better sales techniques on video calls, improved listening, and the sales management tools that may have been treated with disdain are the only effective method of keeping an eye on a distributed team.
Phone-based driver onboarding and management tools such as Undivide (https://undivide.com.au/) will become the industry standard as we move further away from sharing paperwork. The ability for a fleet or depot manager to arrange an instant toolbox across a dispersed contractor and employee base is invaluable. This was important as governments increased restrictions and will be equally important as those restrictions are removed.
Transport companies have to have agile tools to enable all drivers to understand the variety of protocols and procedures being introduced at customer warehouses, as well as delivery points such as shopping centres and hospitals.
As with the broader workforce, we will see a shift to work from home for administration, customer service, and sales teams. The tools we have implemented in a hurry have proven to be robust, and anecdotally, most companies are seeing either continued levels of productivity or even increases. Motivation is a challenge for support staff, though, and new software solutions such as Tradler (https://tradler.co/) will become a must for ongoing HR management.
As a parent, I am thankful that home-schooling will not be a trend that continues.
It is interesting to note that keeping cars off the road, particularly into and out of our transport hubs in capital cities, is in the best interest of logistics companies. A 10% reduction in congestion does equate to less time in traffic for drivers, resulting in reduced fuel use, and potentially more deliveries. On the flip side, we have seen moves by city councils in Europe and Australia to reduce parking and increase bike lanes. Drivers will have to adapt.
This highlights the long-term impact telematics systems such as Kynection (https://www.kynection.com.au/) and Connectfleet (https://connectfleet.com.au/) will have. Companies are challenged now to get more from their existing fleets and drivers without increasing costs. Knowing what your drivers and vehicles are doing is an excellent start. I doubt there will be a successful transport company now that does not have complete real-time visibility of their fleet, and the ability to reroute drivers on the fly to take advantage of or avoid local traffic conditions.
We need to better utilise data for real-time easy to use reports. – Matthew Collier, General Manager, Doble Express Transport
I expect to see case studies on the time savings created by the industry adoption of contactless delivery. Delivery drivers are spending less time waiting for people to answer the door and less time watching a customer fumble with a stylus and a PDA. Authority To Leave is also in style, although this does not work everywhere for all freight. An interesting start-up to watch in this space is Pickups (https://www.usepickups.com/) in New York, where neighbours become virtual parcel lockers.
Some couriers are now taking photos of the receiver instead of signatures. The privacy implications of this probably mean it to be a short-term solution, but an example of the lateral thinking across last-mile delivery.
There will be less non-essential travel. For an industry that relies on sending things long distances, we have been very fond of sending people long distances! The weekly trips between capital cities, the four hours of travel for a 45-minute face to face meeting, will all be rethought.
Are there any industry-wide technologies that should be implemented?
“Our operations and customers have also adjusted to contactless deliveries which we believe will remain for the foreseeable future. I think as long as our customers have transparency of their delivery/pickup, contactless will become the norm.”- Jessica Ip, Chief Transformation Officer, Couriers Please
The important point Jessica makes is “transparency”. There are still too many delivery companies who mask the actual events or change Estimated Delivery dates without notifying the receiver or sender. Australia Post’s services are guilty of this, along with friendly advice such as “90% of late deliveries arrive within three days of the due date”.
We do have the ability to introduce real-time track and trace and combine that with proactive and honest communication. This can be accomplished without increasing staff levels (and therefore staff costs), or even worse, hiding our customer service people behind exhaustive FAQs and then adding chatbots.
Companies have to become used to relying on employee and contractor personal technology. Most people do not want multiple devices, and work from home desks often lack space for more than a single PC or laptop. There will be an increasing move to mobile devices and companies need to ensure that they either have up to date apps for both Android and iOS, or mobile-friendly websites and services.
With the increased volatility as markets start to rebuild and The New Normal Economy takes shape, companies will look to start-ups such as utenant (https://utenant.com.au/) and spaceishare (https://spaceishare.com/), to enable them to better utilise excess capacity and take advantage of distributed warehousing.
Overall, our industry needs to implement end to end collaboration systems such as Last Mile Solutions (https://www.lastmilesolutions.com.au/) and grow their partnerships rather than continuing to offer redundant services either at an inaccessible premium or conversely at a non-commercial loss.
Finally, our industry needs to intensify its focus on driver and operator safety solutions. Fatigue management hardware and software are available and affordable now. With the potential for less direct interaction and oversight of staff, a safety net of solutions needs to be introduced.
Where are our Electronic Work Diaries? According to https://www.nhvr.gov.au/safety-accreditation-compliance/fatigue-management/electronic-work-diary “There are currently no approved EWDs.”.
Unquestionably the time has come! There are rogue operators in our industry, and it is not prudent to trust everyone at their word. The new technologies may not be perfect, but they are better than existing solutions and are also likely to improve rapidly as their use becomes widespread.
This will not be the last time we are faced with massive disruption. How can logistics technology help us be better prepared for next time?
“… a staged warning/response system with phased of shifting from BAU to full ISO-Lockdown. It should be all about what, where, when, how and how much change by defined/distinct phase. Practice drills at least once a year.” – Justin Williams, Principal, IMR Consulting – CX/EX Innovation & Growth
Will we learn? History tells us something bad will happen. Whether it be war, another pandemic, or a catastrophic climate change event, we must be ready.
A digital-first strategy will be implemented by every company. It is not enough to have a plan up for review, or a 3-year timeframe to roll out the new ERP. The changes need to start right now with iteration one. Our successors will not forgive us for a lack of preparation and foresight.
“Reconsider your IT support practices.” – Matthew Purvis.
IT is not just a branch or a bunch of nerds in the back office somewhere. They are not propeller heads. Your IT support team are now critical infrastructure support. As important to your company’s success as the vehicles and the people who drive them.
As some companies have learned more than once this year, IT support is not something that can be trusted to the cheapest vendor. Just as Australia will become more self-reliant in manufacturing, Australian companies need to look locally for reliable and responsive tech partners who have both the capability to deliver and a cultural fit.
Disruption may become The New Normal. There may be no going back to the old ways. We hope and expect that a vaccine will become available within the next 12-18 months, scientists are still learning about herd immunity, and there is ongoing research on whether people only get sick once.
Clouded, the future is.
Every company must learn to be agile and to adapt. Strategic planning continues to be critical, but plans need to be flexible and there needs to be strength in corporate physical and technological infrastructure to ensure our businesses are not derailed by the next unforeseen event.
“…the value of digital in improving your general business processes, data collection, collaboration, decision making and reporting is clear. The big thing from our perspective is removing the clutter of too many digital systems and making sure all systems are integrated, so time is not wasted in administration and double handling. – Courtney Smith, Director – Champion | Strategy & Design, Kynection
Logistics companies do not have the luxury of dispersing the whole team to work from home. We are not solely software as a service companies delivering all our value through phone apps and internet browsers. Our value is in physically delivering.
We need to move things, and that means putting people in harm’s way. People are by far our most important and indispensable resource. Beyond simply providing hand sanitiser, masks and keeping them socially distant, we need to ensure our people can be flexible, adaptable, and resilient.
Ensure your people are trained across multiple functions. For example, internal teams willing to work in the warehouse, assist with marketing, finance or even sales.
Kyle Rogers, General Manager – uTenant, Vic/Tas Director – SCLAA
Whatever new technologies we adopt, whatever changes we make, whichever new strategies we implement, all our efforts must focus on ensuring that the people who work in our industry are better prepared for the future and completely safe in the present.
If you are a company with a logistics technology problem to solve and you have questions, you can schedule a free consultation with me at https://askmarsh.com/catch-up/ or call +61419134461