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Almost all industries, such as Retail, Real Estate, Healthcare, and Education, have been undergoing a digital transformation over the past few years. To not get left behind, the Logistics Sector, which is predicted to reach a value of $16.445 billion by 2026, is not an exception. This industry is under a lot of pressure to improve its services and operations, therefore, it is necessary to apply cutting-edge technology to enhance the performance, stay competitive, and become a more efficient, fast, and adaptable sector to consumers’ needs. To have a deeper understanding of Digital Transformation In Logistics, let’s follow this blog!

1. What Is Digital Transformation?

Digital Transformation can be defined as a course of action to apply advanced technology into a business with the aim of modernizing and digitizing its operations. Once the implementation has finished, the business efficiency can enhance, translating into the customers’ satisfaction, cost reduction, low risk, and revenue increase. For instance, a retail shop incorporates new technology by launching a Mobile Loyalty App to retain customers and attract new ones. Other traditional stores have improved their logistics by utilizing digital technology to accelerate delivery times. Both instances point out the importance and necessity of implementing updated technology in the business and brand operations and services.

2. Why Is Digital Transformation In Logistics Essential?

There is no doubt that looking for Logistics Tech Companies to utilize digital solutions has become urgent to obtain a competitive edge in today’s market. In a survey of 8,000 businesses, 98% of decision-makers in the field claimed that they nurture the idea of improving their logistics technology solutions. Instead of relying on truckers, making them drive for many long hours and long days to reach a destination, the carriers, shippers, and other logistics firms are likely to see digital transformation as a growth-oriented and positive change. For instance, such drivers can be replaced by self-driving technologies, which will be safer because humans are prone to errors. This transformation also helps the logistics firm hire fewer employees, hence saving costs.

Moreover, the digital transformation in the logistics sector will somehow alleviate the strain placed on this industry by the rapid growth of e-commerce. Obviously, the increase in the E-commerce market means that the customer needs in logistics and travel grow up. As a result, both B2C and B2B logistics companies have to compete for delivering maximal satisfaction. Transparency Market Research Report has forecasted the worldwide digital transformation spending in the logistics market to succeed in US$ 94,972.3 Million by 2026 at a CAGR of 10.7% between 2018 and 2026.

The digital transformation in the logistics sector such as self-driving technologies will alleviate the strain

The digital transformation in the logistics sector such as self-driving technologies will alleviate the strain placed on this industry by the rapid growth of E-commerce.

3. How To Apply Digital Transformation In Logistics?

a. e-AWB

e-AWB, which stands for electronic Air Waybill, is considered as a solution for industry digitalization. It is a standardized digital version of the prevailing paper Air Waybill which follows cargo from shipper to delivery. The e-AWB would make it easier and faster to track and process cargo data while enhancing transparency, ensuring security, reducing costs and delays. Many logistics services have implemented this method, and the figure is still counting, meaning an expected 80% industry adoption.

b. AI and Machine Learning Adoption

The benefits of AI and Machine Learning would be indispensable in the logistics sector as it helps logistics companies to utilize and analyze the data, then identify patterns to improve the operations. While AI collects the data, Machine Learning uncovers patterns in such information by using algorithms that point out the most criteria affecting their network's success. The patterns can be related to production planning, transportation management, forecasting demand, supplier quality, etc. To sum up, implementing AI & Machine Learning can give businesses the necessary insights to reduce risk, enhance performance, and minimize freight costs as well.

c. Blockchain Implementation

One of the technologies the owners of logistics companies can’t ignore is Blockchain. A manager of SotaTek Blockchain Development Services claimed that this technology can bring about huge benefits to Logistics, such as transparency transaction, security, and decentralization. When it comes to transparency transactions, it means that every documentation, ranging from consignment note, list to waybill, will be filled in a correct and timely manner without getting lost on the Blockchain network. As a result, if you are a customer, you can see all through the process from the delivery time to the arrival one, then make an appropriate decision about the best price-quality ratio and the supplier you should partner with accordingly. Or else, in case you are an auditor, you can see how the goods are distributed and how it can be improved. 

Moreover, all the changes in all documents are recorded, stored and they can not be rejected or modified as entries into the ledger can only be made if they are validated by the system. Besides, this blockchain technology decentralizes information, expanding straightforwardness and detectability by giving each member inside the chain the keys to imperative data on an item's excursion. Therefore, integrating Blockchain in transforming logistics digitally can assure that no single document will be lost, destroyed, or mixed up. 

d. Cloud Logistics

Integrating Cloud Technology is another way for the process of digital transformation in logistics. When utilizing cloud-based technology in transportation and logistics management, businesses can easily reach operational efficiency. This is mainly because Cloud computing makes it possible to track vehicles in real-time, plan logistics space and manage online ticketing. According to research, Cloud logistics has had 60 percent of logistics suppliers previously utilizing cloud administrations and another 30 percent anticipating doing as such.

Cloud computing makes it possible to track vehicles in real-time, plan logistics space and manage online ticketing

Cloud computing makes it possible to track vehicles in real-time, plan logistics space and manage online ticketing.

e. Autonomous Vehicles

Autonomous forklifts are a common norm in stockrooms, ports, air terminals, and other chain areas these days. And it is predicted that autonomous trucks, which take charge of shipping goods to be unloaded by forklifts and putting in warehouses by automated conveyor belts and robotic arms, would also become more popular on the roads in the years to come. This digital transformation also means that the Logistics Firms can save money on hiring staff and drivers.

4. Final Thoughts

To sum up, the Digital Transformation in Logistics can help such an industry’s business a lot, ranging from demand prediction to reducing costs through automation. Gartner even estimates that nearly 25% of all logistics technology platforms will be having an embedded AI & Machine language capability as soon as 2023. Therefore, it calls for Logistics Companies to work proactively and attract smart digital talent, which keeps them stay competitive, develop in their areas, deliver value for customers, and maximize profits as well.

Do you want to take the first steps in the process of integrating digital systems into your Logistics Firm? Contact us and have a further discussion right now. SotaTek - a Top Custom Software Development Company - can provide you with the best Tech Solutions to cater to your needs. No matter what technology you want to implement in your logistics system, be it Blockchain Network, AI & Machine Learning, or Cloud Computing, our 550+ experts can offer. We believe that as a Client of SotaTek, you can rest assured that all details in the project are well-explained and timely updated to you and your team.

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