In the logistics sector, uncertainty about a rapid economic recovery dominates. Dutch ABN Amro is predicting about a 7 percent drop in freight volumes in 2020. Other analyzes predict a 10 to 20 percent drop. How do transport companies survive? The COVID-19 crisis has taught that it revolves around three things: data, data, and data.
Crisis management: data, data, and data
The corona crisis broke out mid-March. The economy hit the brakes in some sectors and accelerated in other sectors. The top players in the transport sector immediately deployed crisis management teams that followed the situation hour by hour. Only then smart planners can take the right measures. And, more importantly, evaluate together after every working day; what do we do differently the next day?
Peter Appel Transport told about it in Nieuwsblad Transport: “Nobody was prepared for the peak in demand in supermarkets, not even we. But because the supply in the food services sector was gone completely, we could use those drivers as much as possible in the supermarket logistics.” The company had set up a crisis team that discussed every day on how to deal with the increase in demand of FMCG. “We are all working on this and are getting this done together.” The FMCG sector is used to responding to suddenly changing circumstances, such as a ‘BBQ-alert’ or snow fall. Ten years ago, a supermarket manager walked around the shelves with a scanner in supermarkets, today the suppliers can follow point-of-sales data all day.
The lesson for the next two years: data
The logistics sector is facing two tough years. Companies must survive; which customers yield profit and which do not? Are you going to invest in new trucks or not? Managers often don’t know. Many companies work for other clients in the second or third tier. Sometimes they even have no idea what’s in their trucks.
Companies will only survive if you know what is going to happen in advance. Sales and operations planning, a few weeks and months ahead, brings the necessary ‘rust, reinheid en regelmaat’ to operations. Don’t you have those data? Call or email your partners or create a joint online operational dashboard.
The lesson for the future: data
Transport companies need to think more frequently about their market strategy, strategic cooperation, and working with transport platforms like Quicargo or OnTruck. Volatility is the new normal. The best approach for customers, suppliers, and carriers is to absorb market fluctuations together with safety stocks, capacity sharing, flexibility, and supply chain transparency. That is only possible if they use the correct supply chain data together and have great planners. By investing in the training of the best planners, the transport industry can emerge from the corona crisis more strongly.
Sharing data is not a common practice in the logistics sector. It is bad news that not even 10% of the CMRs in Europe are digital. Then it is very difficult to share information; the truck drives, but you have no idea what is in our trucks. That is outdated, the logistics sector has to digitize.
As far as I am concerned, there should be legal obligations within two years that ensures that no truck will go on the road without a digital CMR. The future is all about data, data, and data.
Walther Ploos van Amstel.