How has information technology transformed the package delivery business?

You don’t have to be old to use the phrase ‘remember the day when we’ because Millennials will remember the day when driverless cars seemed 50 years away, and commercial space flight seemed 100 years away. Today we are a lot closer to the point where we ask ‘remember the day when package delivery was by hand!’

Logistics is being revolutionised by information technology through big data and powerful analytics applications. COVID-19 accelerated developments in this area which stopped an industry implosion.

Logistics companies have chased technology solutions since the day they could buy a computer in the ’70s. We now see faster, smarter, and learning worldwide logistics networks with information technology deeply embedded in their processes.

Those who aren’t onboard this information technology ship will fade into the distance as their competitors sail to new horizons. These are the expected main-stream developments:

Forecasting with smart demands

Seeing into the future is always valuable. Being able to forecast shipment volume no longer needs boardrooms of analysts. It can be done using big data analytics and AI (artificial intelligence). Logistics companies will be able to adapt to demand changes in real-time – making them agile companies. This excludes black swan events.

Increased customer satisfaction

Tracking packages by clients is now a norm, greatly reducing lost man hours on customer service telephone calls instead of the focus being on getting shipping right. It also greatly helps with tweaking customer expectations. Tracking can now be done on mobile phones, which satisfies the younger Millennials and Gen Xers’.

Tracking is an astounding display of cooperation between thousands of people, thousands of robots, and millions of servers on an hour-by-hour and stop-by-stop basis.

As automation is g-i-g-o dependant, most customer service interactions are continuously analysed by bots, with anomalies being reported to a human.

Smarter route planning

Route planning is becoming so refined that companies like UPS have even calculated, from big data analysis, that left turns cost more!

The entire fleet of UPS is instructed to avoid turning left unless, of course, it stops them from completing their journey. They are tracked on this KPI too, which makes it effective. They are even advised to opt for three right turns instead of one left turn to get to their drop off point.

It might seem ludicrous and inefficient and most likely infuriated some drivers initially, but the data shows that they have saved millions of dollars (and gallons of fuel) annually. The left turns carry a higher risk than a right turn (in their road format). The physical and quantifiable reduction in risk has driven down their insurance costs, and the few accidents or emergency stops have reduced repairs to their expensive, specialised vehicles.

The tracking, compliance and quantifying is made possible by data collation uploaded from onboard GPS trackers. The organisation’s data warehouses download the data daily, building a rich pool of data. This deep insight drives the ongoing improvement of strategic routing decisions, traffic history or trends, the timing of dispatches and other factors which will save billions of dollars if applied industrywide.

Autonomous administration

Much to the chagrin of blue-collar workers, packing, tracking, customer service, and administration are destined to be autonomous, if not already so. The benefits compound quickly.

Administrative paperwork piles up very quickly in the logistics industry. It has to be, as there are so many touchpoints, actions, and risks associated with the logistics of items. Paperwork and drivers is also not a happy marriage.  Their work is dynamic and not conducive to neat, consistent paperwork. Just getting it right in a stable office environment is tough. Warehouse staff and their supervisors also have had to wade through tomes of paperwork in order to handle even small quantities of products. Just mention the prefix ISO, and eyes will start rolling.

The back-office staff have to track fuel consumption, trip times, maintenance schedules, maintenance costs, procurement efficiencies, wages, claims, and the list goes on. This is all very human-intensive.

Autonomous administration can meet with resistance due to perceived lost work opportunities. However, it does increase job opportunities in other categories, increases customer satisfaction, and reduces costs. This, in turn, can lead to the expansion of the company, and through that, will create more office work opportunities – within a happier, more efficient work environment.

Big data will help office workers track and analyse key metrics without cumbersome, frustrating worksheets the size of solar panels. Human resources will be managed more effectively and will see a more positive impact from their effective input. There is nothing more demotivating for a staff member than working laboriously through tasks that ultimately create minimal impact versus the intensity of input and processing. To this end, any statutory reporting is easily done when automated without the need for panic and all-nighters.

Staff can have more fulfilling, value-adding careers.

The big goal – full automated deliveries

Self-driving vehicles are here, but it is early days. The dream of self-driving large trucks is still a high risk to a society based on the level of A.I. available. The fact that there are domestic vehicles self-driving (with a human presence in the car) is still amazing, considering the technology was embryonic ten years ago!  Self-driving has moved from a pie-in-the-sky idea to actual wheels on the road but with human intervention still required. Widespread adoption will happen with the near-trillions of dollars being invested into this technology.

These ‘dumb-trucks’ will not only reduce costs from the lack of drivers, the lack of human foibles and the absence of stops for rest but will produce their own significant quantity of data as each mile is clocked. They will have the agility to self-assess their current performance versus previous records and will adjust immediately. This creates a better outcome and a safer trip. The faster you can improve poor performance, the greater the saving in any business.

The above solution would be laughable without big data collation, big data analytics, and profound artificial intelligence.

Trucks, lorries, warehouses, and back-office functions will become increasingly autonomous or fade into the distant past. The highly innovative Amazon is, again, being a pioneer in the marketplace. They are already using autonomous picking robots in their warehouses. The robots track items from their uploaded pick-list, pick them and transport them to a stacking point or a packing line. Human employees are still used for the dispatch and vehicle interface.

Automation and semi-automation are prevalent in the majority of warehouses. Some have warehouse management systems only, others are also incorporating robots for portions of the work (like super-high-level picking), some use wireless scanners and trackers, and some have invested in big data analytics.

Since the automation of warehousing was introduced, each company has been able to radically reduce delivery turnaround times. Referring back to our example, viz Amazon, they were effectively able to slash delivery times, to customer’s doors, by nearly 50 per cent. That is huge!

Is everyone onboard the data ship?

Globally, logistics companies are big supporters of advancements in big data analytics. 90 per cent of the shipping industry are supporters, and 98 per cent of logistics firms believe that they cannot compete without big data and AI support, operationally and strategically.

Big data has revolutionised the package delivery industry, bringing service and cost efficiencies and environmental benefits. Job categories will be lost, but that vacuum will be filled by other categories, giving a win-win solution.