Data Powers New Possibilities for Logistics-as-a-Service

The middle mile and the last mile are getting a high-tech makeover.

In a panel moderated by Jay Darnell, vice president, head of B2B partnerships at Visa Business, SmartHop Co-founder and CEO Guillermo Garcia and Fluid Truck Co-founder and CEO James Eberhard said data, payments and emerging innovators use new rails to create new sources of value for carriers and shippers — and positive ripple effects for consumers, too.

“Because of technology, because of digitalization, because of connectivity, and because of data,” Garcia remarked, “you can do that at scale for many, many small businesses.”

The marquee example here may well be Amazon, with its recent bolstering of its Fulfillment by Amazon model, which, in Garcia’s observation, makes it so that the small manufacturer or distributor is able to use Amazon’s rails to “get out there” — to claim warehouse space that is so personalized that it can be as small as the dimensions of a single pallet.

Read also: Amazon’s Logistics Fine-Tuning Spotlights Last-Mile Focus

There are other players streamlining their own logistics approaches. FedEx and Landstar, to offer up other examples, move goods for customers without having to own a single truck — they can enlist the services of smaller trucking firms to move freight as needed and just in time.

The shift has become apparent as a result of the pandemic, noted Eberhard, where the heady rise of eCommerce — and doorstep delivery — demanded that merchants, and by their extension, carriers, had to meet consumers’ expectations.

And now, more than ever: It is the data that is so critical that makes it possible to meet those shifting demands.

For the logistics firms themselves, said Garcia: “Data means safety and data means that they can keep their costs of operations down — they know where to ‘push’ their efforts and how to push.”

Data also helps reduce some of traditional inefficiencies. Garcia noted that in the spot freight markets, especially, there can be an imbalance between available trucks and demand; pricing can shift in minutes.

“The smaller trucking companies have to find a way to rely on more data,” said Garcia, “if they want to compete at the highest level.”

Data benefits the larger firms too, observed Eberhard — enabling FedEx to observe that there may be a recession in the works, illuminated by declining shipments.

Read also: FedEx: Deteriorating Economy Drove 11% Drop in Package, Freight Volume

“There pools of data coming the all the carriers — large and small — creates this treasure trove of predictive analysis of what’s happening, locally, across the planet.”

Evolving Platforms

Data also has been, and will be, instrumental in broadening platforms to include logistics.

The same drivers that might initially be working to solve mobility (ride-hailing) demand can be shifted to help satisfy eCommerce demand. Fluid Truck, Eberhard said, can help any brand of delivery operations to find the right person to help deliver items along routes. And SmartHop, Garcia said, can enable independent owner-operators to operate more efficiently and improve margins. In a business with operating margins of 6% to 8% and six to 10 trucks in a fleet, there’s no room for error, he said.

“You’re struggling with demand in uptrend markets and profits in downtrend markets,” he said, “and you’re paying for fuel, too.” Fuel is now a significant threat to margins as spot markets cool down, truckers’ salaries are high and trucks are idled.

SmartHop’s own data and analytics flow help predict where demand will be most apparent and helps truckers plan the best loading and dispatch strategy.

“We’re proving the tools to help them keep their businesses running the way they want to,” and boosting profits by as much as 35%.

The positive ripple effects are significant: Recipients get their goods faster, the enterprises serving them see a top-line boost and the truckers themselves are able to keep operations humming and staff paid on time.

Looking ahead, Eberhard and Garcia said that companies would wind up seeing the value inherent in signing on with logistics service providers.

As Eberhard remarked, “These providers help businesses stay focus on what they are doing, and to be the best at what they do.”

Garcia added, “Logistics and supply chains are now front and center — and that creates the investments and the urgency that will interconnect data sources and partnerships.”