Retail and Disruption in Freight Transportation

Tuesday, June 25, 2019

I was recently invited to speak to executives at the Retail Industry Leaders Association (RILA) about tech disruption in freight transportation. Following is a lightly edited excerpt from my presentation.

The premise of our survey was that disruption is real—it's happening. We asked a sanity question, “Do you agree?” At the close of the survey, we wrote, “We believe that disruption is creating new winners and losers. That people should look at their strategy, their sales, operations, IT. What do you think? What are you doing about it?”

48 percent said they strongly agree that disruption is coming, and they are taking action now. 47 percent said they agree, but they are not sure how to proceed. Only five percent said they don't really see this disruption that people are talking about it--it's more hype than reality.

Basically, we have three recommendations. I am speaking to the 95 percent—I don't have much to say to the five percent. We say that emerging technologies are creating the new opportunities for advantage, so focus on those first. Take those and look at these impact areas.

The survey participants were a broad group of companies in our space, both carriers and other shippers. Every organization is different. Every RILA member is different. First we say, “Which of these target areas can be disrupted or improved, using new technologies?” One way of thinking about it is optimization of your various kinds of assets. You are making decisions about them—how do you optimize the decisions you’re making for these different assets? The impacts would be: more efficiency, effectiveness, nimbleness, consistency, but bottom line, more profits.

Secondly, we believe that this optimization approach is no longer just a data science group, an operations research group, an IT group, or a finance group. It is now a core executive function to look through the operation at all levels—in transportation, supply chain and other areas. Executives should say, “I don't have to get a degree in math or AI but I need to understand it like I understand finance and learn how to apply it.”

If we look at the three hottest and most talked‑about companies right now—Lyft, Uber and Tesla—they are all at the intersection of technology and transportation. I think that the areas that everyone on this conference call has spent their careers building, are going to be high‑profile. I am predicting that if you are leading these smart technologies into transportation management, that for the first time in our lifetimes, senior management is going to say, “If you could do that there, we have got a lot of other places throughout the organization where that would be helpful.”