The McKinsey Global Institute estimates that the transportation-and-warehousing industry has the third-highest automation potential of any sector. The rising number of online retailers and their growing demands, the shortage of labor, and new advancements in technology have pushed automation in transportation industry to the top of the agenda for enterprises worldwide.
In fact, McKinsey estimates that these advancements in automation will lead to logistics costs dropping by as much as 40 percent. But automation is not limited to the workflows in warehouses – logistics companies are realizing that they can change the way goods flow across all modes of transportation as well – it can expand a company’s ability to flex with peak demand, pick and pack individual products and take on heavier cargo.
Let’s take a look at the revolutions automation can cause in the transportation industry:
Two-thirds of all goods transported in the United States are moved by trucks, and truck driving is the primary occupation in over half of the states in the USA. But ATs, as these fully automated trucks are called, are about to change all that in the future, with their capabilities of being able to operate without any human intervention. A fully autonomous truck would be able to operate at scale without drivers from loading to delivery.
While full autonomy is a long way off, experts in the industry have predicted that the shift will happen in several phases, with each phase bringing in a higher amount of cost-savings than the previous ones.
They also estimate that it will take around ten years for fully autonomous trucks to get on the road and several more before we can envision a completely driver-free trucking industry nation-wide.
Automation in ports has five distinct parts: automated equipment, equipment control systems, the terminal control tower which is the “brain” of the automated terminal, human-machine interactions, and interactions with the port community.
From the first automated port that was set up in Europe in the 1900s, over 40 ports have since installed equipment to automate to some degree. Despite the slow returns on investment that most ports are seeing, they are the ideal candidates for automation – their physical environments are predictable and the activities conducted are straightforward and often repetitive and they generate vast amounts of easily collected data.
With automation, the safety in ports improves, the number of disruptions caused by human labor reduces and the performance of the port becomes more predictable. Once the initial hiccup of huge investment is overcome, ports become ripe to glean the benefits of automation. In fact, according to research, successfully automated ports see their costs falling by 25-55% and their productivity increasing by 10-35%.
Automation in Air Freight
With companies such as Amazon making their stakes in the logistics industry, and the belly capacity of aircrafts increasing by 3-4% a year, and the huge blows to revenue that the pandemic brought with it, the air cargo industry is under immense pressure. It is the need of the hour for companies to consider automation to seize as many new opportunities as they can.
Redesigned automated processes can help them provide better service with higher quality and transparency. Automating booking, for instance, could make the process up to 90% faster. A fully digitized sales and customer-service experience could push direct shipper-carrier bookings up to 15-20%, from the 5% it sees today.
While automation is one of the most exciting revolutions set to disrupt the transportation industry, it’s not a change that will be seen overnight. All experts point to a slow but sure change – one that might take years, but will certainly transform the industry into something that is a completely different creature from the one we see today.