10 Jan Logistics e-Marketplace – the right model for the industry to collaborate
Efficient logistics is one of the parameters that define the success of an organization. A tiny glitch in a specific process could hamper the efficiency of the entire supply chain. According to a recently published study, the logistics industry faces several obstacles, and a significant chunk of the cargo is often delayed due to identifying the right modes of transport based on capacity.
Stakeholders in some regions believe that price isn’t flexible, and they could go out of business soon due to competitive pricing strategies by newcomers. Therefore, a platform that eases price discovery allows end-to-end connectivity and facilitates the entire process flow is the need of the hour.
Logistics electronic Marketplace has been a technological awakening for many in the change-adverse logistics industry. A true disruptor. Bringing logistics service providers together on a unified technology platform—a huge step for an industry known to be highly fragmented and relational is disrupting the industry. The entire supply chain could access better growth, profitability and efficiency.
The Marketplace Model: round peg, round hole
One may not assume that logistics Marketplace has the same wiring as Amazon, but if you lift the veil on either company, you’ll see that their inner workings are the same. Logistics typically involves three primary players, just like a Marketplace. An Amazon buyer is like a shipper. An Amazon seller is the equivalent of a carrier. Amazon, the marketplace operator, is the equivalent of a broker or freight forwarder. Connecting the buyers with the sellers can be compared to connecting shipments with trucks, airlines and shipping lines.
Of course, this is an oversimplification. There are nuanced differences between these business models. But when we see shippers as buyers, carriers as vendors and brokers as operators, suddenly, marketplace technology is unlocked as a viable solution for tech-starved agents. By acknowledging this congruence, agents can imagine a world where matching shippers to carriers is supported by automation, interconnectivity, and scalability previously unavailable.
Logistics technology: historically, an oxymoron
For most service providers, tech has either been non-existent or undeveloped. Most logistics processes are done relationally, not digitally. Every time you negotiate a request, travel to sign a contract or call a driver for a tracking update, you spend time and resources on low-value administration instead of on high-value business development.
This isn’t to say that logistics is technology aversive. It’s just that the use of tech is one-sided. Carriers use fleet management systems. Agents use TMSs, shippers use ERPs. While these tools can certainly help, they delink the shipping experience, limiting each player to an incomplete view of the greater system at work.
Proof in the profit
Marketplace tech can bring all stakeholders under one roof, aligning them with fintech, e-commerce and automation required to optimize shipments, fleets and delivery options. As a one stop shop for end-to-end shipping, marketplaces can give carriers self-determination, shippers selection and brokers increased capacity. The platform leverages algorithms to match shippers with carriers, eliminating complex processes. It enables price discovery, user reviews and ratings, route optimization, schedules, e-contracts, post boards & post trucks, track & trace and paperless trade.
The booking data is reusable for further shipment processing by connecting to other supply chain stakeholders. The platform is equipped with comprehensive modules for a quote, quote management and reverse auction, and multi-channel booking with EDI communication. The platform can further connect carriers to the carrier for cargo capacity utilization. Airlines will benefit from reduced incidence of partially filled or empty bellies on returning aircraft.
In a nutshell…
Until now, the digital transformation of logistics has been elusive. Traditional players in the space didn’t know how to leverage tech that wasn’t aimed directly at them. But, the logistics market, like the one offered by Kale Info Solutions, is a unique platform that could facilitate trade and simplify the complex structure of the logistics industry. The efficiency of each stakeholder improves significantly and takes their business to the next level. However, the platform is more beneficial if all stakeholders in a given environment unanimously choose the platform.
Author – Bhushan Kaki, Senior Consultant – Marketplace, Kale Logistics Solutions
Email – Bhushan.Kaki@kalelogistics.com