Addressing operational challenges of small and medium enterprises of the logistics industry – Potential for autonomous vehicles

Abstract

Small and Medium Enterprises (SMEs) are integral to driving innovations, job creation and sustainable growth in the economy. The problem facing SME development efforts in emerging economies, however, is a lack of sustainability of the sector, largely due to high operational costs and reduced profitability. Given the centrality of goods transportation in almost all trades, improvement in operational efficiencies could help reduce costs for most SMEs in the logistics industry. The Fourth Industrial Revolution (4IR) technologies such as Artificial Intelligence (AI) have ushered in the rise of smart robotics solutions to the evolution of autonomous vehicles (AVs) innovations. The authors sought to understand the potential AVs have in (i) reducing operational costs, (ii) improving logistical efficiencies, (iii) and increasing revenue and profitability, which should improve the sustainability of SMEs. Therefore, the aim of this paper is to explore the reasons SMEs in the logistics industry have such high failure rates and what role AVs could play in addressing some of those challenges. On this point, funding, regulations, delivery times, road safety and fatalities, and driver skills are just some of the operational challenges for SMEs in the logistics industry. It was found that AVs have the potential to address some of these challenges but that an appropriate AV technology adoption framework model is required.