Innovations That Transformed the Logistics and Freight Forwarding Industry
September 26, 2019 josh
What are the innovations that transformed the logistics industry?
- Cargo containers
- Fiber optic cables
- Tracking Systems
The logistics industry plays a crucial role in the actualization of the supply chain of businesses worldwide. If you think about it, transferring goods, merchandise, and other products is already a challenge, even in the local sense. In most cases, your local express delivery can get the job done, but what if you have an international company that relies on import and export? That is where logistics and freight forwarding services come in.
The logistics industry is one of the most progressive industries in the world despite being one of the toughest tasks to accomplish. As previously stated, transferring, storing, sorting, and organizing merchandise is no easy feat. Innovation has made those complicated tasks easier and more accessible for companies worldwide.
It is easy to take these developments for granted, but knowing how the logistics industry became one of the foundations of supply chain management can be vital when it comes to choosing a logistics company for your purposes as well as making further improvements to the service itself.
To help you in that regard, here are some of the innovations that have transformed the logistics and freight forwarding industry.
One of the most iconic representations of logistics and freight forwarding is the cargo container. However, it is not only for show as its introduction to the world of import and export has revolutionized the service and made it more effective. One can even say that no innovation is as important, yet simultaneously overlooked in terms of value. ‘Containerization’ turned out to be the biggest driver of global import and export to this day because of how much can be transported at a given time.
The sheer size of freight and shipping containers allowed businesses to conduct larger international transactions involving innumerable amounts of merchandise which obviously benefitted wholesalers, trading companies, and construction companies. Aside from that, the shape of freight containers allows them to be stacked, allowing many containers to be shipped at a given time. It was also easier to pack, load, and unload thanks to heavy-duty machinery.
Its efficiency is hard to match, and as a testament to that, research has shown that there was a direct link between the advent of containerization in 1956 and the explosion of global exporting activity.
Fiber optic cables
In the same vein as freight containers, fiber optics also empowered the logistics industry like no other innovation. This time, it overhauled the communication and data aspect of logistics.
Initially, one of the limiting factors of a truly global company was the inability to quickly communicate and conduct transactions on a worldwide scale. If data cannot be sent from one point to another point somewhere else on the globe, then business simply cannot be made.
This wasn’t a problem for large corporations with huge market shares thanks to their economies of scale, but smaller firms just couldn’t do the same. Thanks to the advent of fiber optic cables, overseas communication costs went down which then allowed smaller firms to conduct business in other countries.
Moving on to more recent innovations, tracking systems helped not only the operations, but also the customer/client side of things. Tracking systems allowed both parties to get a more precise idea about delivery arrival and departure. Before polished tracking systems, people had to work with estimates, get updates through phone calls, and hope that forecasts were accurate. It has even made an impact down to local express delivery services and trade.
The emergence of accessible internet paired with the continuous development of software and hardware has enabled this type of system to flourish in the logistics industry. Currently, tracking systems are a round-the-clock type of service which means nonstop tracking without the cost of making countless phone calls. This saves time, money, and overall improves the user experience of clients.
Automation is one of the technological processes that has taken off in recent years thanks to other innovations like artificial intelligence, machine learning, and better machinery that are suited for a variety of processes that seek to make time-consuming, error-prone tasks easier.
In the logistics industry, a time-consuming, error-prone task that is being improved by automation is warehouse management. Repeated sorting, categorizing, and storage is something that is now being done by machines. Just look at the most advanced port in the world, Port of Rotterdam in the Netherlands.
It employs a automated container terminal that uses computer-programmed cranes to stack, unload, and load cargo in the most efficient way possible. This leads to increased productivity and improved handling performance while reducing labor costs. The more logistics companies around the world automate their services just like in the Port of Rotterdam, the more industry will improve as a whole.
Innovations continually shape the world not just in the logistics trade, but in all industries where there is a capacity for innovation. When choosing a logistics service provider, whether it’s a freight forwarder or a local express delivery service, look for signs of innovation because it is a sure sign that they truly care about the service they are providing.