The Digital Transformation of Logistics

Abstract

There is a big chasm between the digitalization level of born digital behemoths and industry players who refuse to adopt new technologies. This chapter provides an overview about this divide and summarizes studies about the state of digitalization across logistics infrastructure (seaports, airports, warehousing), logistics execution (road transport, sea transport, air transport, and courier, express, and parcel delivery), and logistics services and advisory. The digital transformation of seaports and airports is happening slower than in other logistics areas, where, for instance, only 3% of container terminals are (semi)automated. Meanwhile, in ca. 30–40% of warehouses, some type of Industry 4.0 technology, such as sensors, robotics and automation, or predictive analytics is adopted. In road freight, 35–40% of companies implemented transportation management systems and other technologies that optimize operations. In sea freight, shipping companies are cautiously embracing the digital transformation so that few carriers use modern ways to connect with their customers, e.g. via marketplaces. In air freight, carrier connectivity lags even behind ocean carriers, where companies struggle to implement digital solutions that do not immediately lead to cost benefits. In courier, express, and parcel delivery, various technologies are already mature and available but still in early rollout phases. Regarding logistics services and advisory, just half of the customers are satisfied with their 3PLs' IT capabilities. While the state of digitalization for traditional industry players is overall on a low to medium level, an increasing number of companies understood the impact that the digital transformation will have on them and intend to follow the call of the times, ready to overcome barriers such as high costs, lack of standards, and unclear benefits. Companies that do not proactively adapt their digital strategy will not only be left behind but also vanish faster and more surprisingly than this was the case in the past.