The Amazon effect on your business

The Amazon effect

At the CES Technology Show in Las Vegas, Continental showed off its Cube driverless shuttle featuring robotic dogs taking parcels from the vehicle to the customer’s front door¹. Four legs are better than wheels for getting around pavements and obstacles. What is the world coming to? What is the Amazon effect on the transport industry? How might the future look?

The Amazon effect

Thanks to Amazon, customers (both B2C and B2B) have greater expectations. They demand virtually immediate fulfilment of their orders, expecting delivery within the next day or two. This effect is forcing change across transport, logistics and the whole supply chain. This ever-moving situation is both a challenge and an opportunity for those trailer fleets that are willing to face the changes head-on. (source: Forbes)

The Effect of the effect

Among many different perspectives of how the Amazon effect might translate into consequences for the trucking and logistics industry is the vision elaborated by PwC’s Strategy& in its Global Truck Study 2018. It forecasts that “By 2030, trucking and logistics will be an ecosystem of autonomous vehicles directed by a digitized supply chain, combining driverless cable trucks and delivery hubs staffed by robots.”

In its very digital- and automation-driven view of the future, Strategy& highlights three conclusions:

  • Trucking logistics costs will decrease by 47% by 2030, mainly through reductions in labour.
  • Delivery lead times will fall by 40%.
  • From 2030, trucks, thanks to their autonomy, will be on the road 78% of the time compared to the current European average of 29%.

Strategy & also predicts that a more digitized supply chain will reduce administrative overhead, cut out time-consuming inventory and decrease insurance costs, bringing savings of up to 41% by 2030 compared to today’s supply chain.

Future trends

Innovation in transport and the supply chain does not stop at electric and driverless vehicles, the use of AI and predictive analytics to improve driver safety and retention or indeed better online freight brokering services to maximise full trailer loads or robotic dogs to deliver packages over the last few 100 metres. There are plenty of other interesting concepts being developed. The trends include:

  • Paperless for real-time information – The increasing digital automation and robotization of processes across the supply chain enable fleets to bring down their costs, accelerate their responses to new business opportunities and provide information to customers about deliveries in a quick and precise way. Abhinav Singh, a director at Intelenet Global Services observes that too many trailer fleets and other players in logistics rely on manual, often paper-based processes. In an era where providing real-time, accurate data can generate increased customer satisfaction and commercial benefit, logistics firms including trailer fleets need to streamline and automate their processes and improve the efficiency of their operating models to compete in the Amazon era. (source: TTNews)
  • Going underground – Several commentators in a TTNews article entitled “Reimagining Trucking” believed that underground tunnels similar to those being dug by the Boring Company for transport between cities for pedestrians could be adapted to accommodate freight and take more trucks, containers and cargo off the road network.
  • Driver pool – Brittain Ladd, a supply chain consultant, proposes assembling a consortium of truck fleets that would work with a shared pool of drivers to transport cargo between two defined locations. The drivers would be paid an hourly rate instead of a per-mile rate. Ladd believes that this system could have transported all the loads carried in 2017 with two-thirds of the trucks. (source: TTNews)
  • Rethinking order fulfilment – Amazon is among the companies showing the way in order fulfilment. Amazon is crowdsourcing deliveries to external freight companies, delivering to car trunks, Amazon lockers, people’s private apartments and experimenting with drone delivery points. It is also developing an Amazon franchise delivery business model for which companies can apply. If you are operating on a large scale, maybe you should mirror Amazon and consider going “intermodal”. For example, Amazon has expanded its trailer fleet, created Amazon Air with 40 aircraft and made some initial moves into ocean-going freight. (source: “The Rise of Amazon Logistics” – TTNews)

TIP trailer rental and the Amazon Effect

TIP trailer rental enables you to gain flexible access to trailers whether you need one to fulfil a one-off delivery or you have signed a new contract with a customer for a long-term commitment. The flexibility of our rental contracts gives you the ability to use the best trailers and latest trailer technology without having to bear high upfront purchase costs and the overheads of ownership.

Customers renting trailers through TIP Trailer Services can benefit from preferential rental terms to increase their trailer fleet or reduce its size as demand fluctuates. TIP trailer rental customers also enjoy the benefits of TIP’s maintenance and repair services through its extensive Europe-wide network of workshops and mobile servicing vehicles. To find out how we can help your fleet take advantage of the Amazon effect with TIP trailer rental, please contact us via this TIP contact form.