The world of online trucking
The Internet is not only changing the way we work, socialise, create and share information, but also how we organise the flow of people, ideas and goods around the globe. Yet the magnitude of this transformation is still underappreciated – especially in the trucking community.
Derived from an obscure network of researchers and technology experts three decades ago, the Internet has become a day-to-day reality for almost a third of the world’s population; and it’s safe to say that even in a country like Australia, where Internet speed is notoriously slow, the digital revolution is in now in full swing.
Businesses across the nation are desperate to reach out to the 83 per cent of Australian households that are currently connected to the Internet, and the 64.6 per cent of people who own a smartphone.
But while multi-national corporations have been benefitting from the nation’s growing affinity with the digital world for a while now, individual consumers and small, upstart businesses only recently began to take advantage of the Internet’s empowering influence. The result is a complex virtual ecosystem where new ideas come and go by the second, providing infinite opportunities to connect, shop, learn and work.
For the trucking community, the digital revolution has led to the creation of a host of new services to monitor and record vehicle movement and driver behaviour in real-time, potentially leading to a whole new level of transparency within the marketplace. Looking ahead, it’s safe to say it will continue to change the way we buy and sell equipment, gather information and exchange knowledge.
In fact, we are still in the early stages of the transformations the Internet will unleash and the opportunities it will foster, according to US consultancy McKinsey. “Many more technological innovations and enabling capabilities such as payment platforms are likely to emerge, while the ability to connect many more people and things and engage them more deeply will continue to expand exponentially,” the company said in a recent report.
Despite that inherent growth potential, Internet adoption rates are slow in the trucking world, with many businesses still hesitant to buy into the fast-paced online lifestyle. But, the pressure to open up and explore the online world is rising by the day – often driven by the booming telematics market.
According to Choong Lee, a Professor at the Management and Marketing Department of Pittsburg State University in the US, commercial road transport is not just about transporting freight from A to B anymore, but about managing equipment and supply chain data. That’s why customers continue to demand 24/7 visibility and real time data provision, services that would be inconceivable without mobile Internet.
While large-scale companies are leading the way in the telematics game, Lee predicts that even the most reluctant privately owned businesses will follow suit in 2015-16 and embrace satellite tracking and communications technologies as a reaction to growing market demand.
“Technological lag is becoming one of the biggest challenges facing private fleets. For-hire carriers have not stinted on the installation of the high-tech routing, tracking and communications systems that their customers demand, but relatively few private firms have followed suit. As demand for more precise delivery scheduling and supply chain visibility grows, private-fleet managers are finding that fleet technology is no longer a luxury,” he says.
But there’s more to the digitalisation movement than remote freight and vehicle monitoring. Lee says the Internet has become an important tool to facilitate new business relationships and enter new markets on more than one level – especially in a time of growing economic volatility.
One promising market segment that has been creeping into the limelight in 2015 is new and used truck sales. Formerly considered a one-on-one business interaction due to the complexity of each build and application, the Australian online sales market has seen a lot of movement recently, with companies like trucks4u.com.au and findmyequipment.com.au now challenging local juggernauts trucksales.com.au and truckworld.com.au. Both allow customers to browse a nation-wide database of used and new equipment and compare it live on screen without making a single phone call or leaving the office.
Meanwhile, OEMs have begun to develop online truck configurators that help potential buyers design their own truck on a computer or smartphone screen using a detailed 3D model – effectively reducing the dealership visit to a mere price negotiation.
On the other end of the spectrum, transport businesses also begin to see the benefits of a professional online presence. According to Choong Lee, the majority is now aware that creating online brand equity can be a sound investment. “It is important to remember that by creating a website where others can learn about you and your services offers the potential to gain more customer contacts and ultimately lead to increased sales,” he says.
Experts like Lee agree that the age of the DIY website is coming to an end, with professional web offerings now regarded as a mirror image of the company itself. In line with that, the industry is increasingly involved in social media services like Facebook and LinkedIn – not just for self-promotion, but to actively engage staff, clientele and the local community.
Arguably the most disruptive force in the digital sphere has been Sydney start-up Sendle (see page 22), which has openly challenged Australia Post this year by offering door-to-door parcel delivery nationally at a substantially cheaper flat rate, all driven via a simple online interface.
Inspired by the burgeoning e-commerce market, Sendle could have entered the scene at just the right time: Globally, three billion people are currently connected to the Internet and almost $8 trillion exchanges hands each year through buying and selling online, providing ample opportunities for nimble metropolitan delivery businesses to secure a slice of the pie.
In breaking the old mould of entrepreneurship, the Sendle example has also demonstrated just how profound the impact of the Internet is on Australia’s business community – while large companies have long understood how to create value from dynamic, diversified supply chains, global talent sourcing and analysis of large data sets, young and nimble competitors can now utilise the online space to compete at eye level. They can reach customers just as easily, find suppliers and tap talent from around the globe, and also use the Internet to provide significant marketing and brand muscle.
What’s more, they show that people are the real beneficiaries of the Internet’s growth. The Internet has fundamentally empowered the consumer, allowing shoppers to compare prices, find instant sales and locate specific makes of trucks or commercial rental properties without the use of brokers and dealers. It can offer road directions or health information. It saves the consumer time, boosts price transparency and gives customers access to hard-to-find products – a constant quest in the specialty equipment market.
But despite its impressive magnitude and reach, the Internet is still very much in its infancy, according to McKinsey. “We can expect new technologies to continue to shape the landscape of possibilities as people and things become ever more connected to the Internet and to each other,” the consultancy found.
One buzzword that will keep trucking businesses busy in 2015 is ‘big data’ – the large datasets generated from every customer interaction, every wired object and every social network. The sheer volume of this data is staggering: enterprises globally stored more than seven exabyte* of new data in 2010, while consumers stored more than six exabyte at home.
According to McKinsey, this trend has the potential not only to drive competitiveness in the private sector, but also fundamentally transform government operations – think centralised permit processing or road access administration.
Most of this big data will be processed not in individual computers but in the ‘cloud’, computing power provided through networks rather than on a local computer. Experts predict that the rise of cloud computing will facilitate a new wave of innovation whereby functions such as e-mail and contact management are provided as a service and users can more fluidly collaborate in real time. The trucking community has only just started to explore the true potential of that development, which could quickly turn truck drivers into ‘knowledge workers’ and trucks into mobile information hubs, as US researcher Choong Lee puts it.
The next logical step from here is the Internet of Things, a buzzword that has made headlines all throughout the first half of 2015. When physical assets themselves become elements of an information system, with the ability to capture, compute, communicate and collaborate around information, the Internet of Things could become a truly disruptive tool, experts say. “The more we connect our objects, the more powerful that network becomes,” McKinsey says.
Trucks could be an important piece to that information puzzle. Equipped with sensors, actuators and communications capabilities, they could soon interact with anything from bridges to warehouses, generating and transmitting information on a massive scale and, in some cases, adapting and reacting automatically.
As a result, governments, policy makers and businesses are called upon to recognise and embrace the enormous opportunities the Internet can create, even as they work to address the risks to security and privacy that go with it. According to McKinsey, these legitimate policy concerns need to be weighed against the opportunity and growth potential the Internet offers to enrich lives, build businesses and give consumers enhanced choices in the years to come.
For the trucking community, embracing the digital revolution could therefore mean stepping away from the historical definition of commercial road transport and adopting a more holistic ‘logistics’ perspective. According to Ferrier Hodgson’s trucking expert Brendan Richards, only those with a logistics mind-set will be able to tap into the enormous potential of e-mail, texting and social media and truly benefit from the digital revolution that is currently taking place in Australia.
The full story has appeared in the October edition of Prime Mover. To get your copy, click here.