With the coronavirus pandemic accelerating the take-up of eCommerce and forever changing the face of retail, Australia’s transport businesses must scale to meet the challenges without succumbing to traditional growing pains.
Australia’s rapid uptake of eCommerce in 2020 saw economy-wide online sales grow by an incredible 57 per cent year-on-year. With this came tremendous disruption, but also tremendous opportunities for those businesses well-placed to thrive in the so-called ‘new normal’.
While Australians may not always be able to go out to the shops, their parcels still need to make it to their doorstep. As a result, transport network volumes doubled over the past 12 months – in terms of delivery volumes, you might say that all our Christmases came at once.
The pandemic has accelerated the shift to eCommerce, condensing years of growth into months. Once the impact of the pandemic subsides, many consumers will stick with the convenience of online retail and transport network volumes won’t return to pre-COVID levels.
As a result, Australia’s courier, express and parcel (CEP) market is expected to grow to more than one billion parcels a year by the end of 2021. Coping with this requires the entire industry to work smarter, not just work harder.
The sharp increase in business-to-consumer (B2C) sales, with deliveries to homes, presents a range of logistical challenges for both drivers and operations which are more familiar with undertaking business-to-business (B2B) deliveries.
The growth in B2C deliveries makes it harder for operators to optimise and leverage economies of scale. Compared to B2B deliveries, drivers undertaking B2C deliveries are performing more drops with smaller volume. The impact on efficiency is compounded by increased driving distances and fuel costs, along with potential delays in receiving directions to drop points.
Dealing with these challenges by simply demanding more of drivers and equipment is not the answer, as it creates challenges when it comes to Chain of Responsibility (CoR). This legislated safety requirement addresses driver fatigue management, speed, overloading and load restraint issues by extending legal obligations along the supply chain.
Another bad solution to the significant increase in B2C home deliveries is to simply throw more resources at the problem – with a corresponding significant increase in driver and equipment volumes.
With this comes not just significant cost, but also a significant increase in the administrative workload required to attempt to keep everything running smoothly as operations scale.
The best solution to these challenges is for transport businesses to take a smarter approach to deliveries, and technology is the key. Any transport business which remains stuck in the manual paper-based ways of the past, rather than embracing the new digital world, will feel the pain and quickly lose market share.
Scheduling deliveries through auto-allocation and optimising each driver’s daily route, to save time and effort, are excellent examples of how technology can bring transport businesses into the modern age.
Supporting this is the provision of real-time vehicle routing and tracking, along with instant paperless proof of delivery status. On top of this are smart invoicing and fleet maintenance capabilities.
The key is to link every customer, agent, sender, receiver, depot, driver, administrator and manager to enable them all to access the information they need. The idea is to provide complete visibility through the entire network. This means businesses need the ability to dictate, design and configure an incredible amount of data and process flow, without getting product developers involved.
Transport companies want full control over their destiny. They want to control their processes, their data flows and their IT costs – all with the overarching goal of enhancing their workflow and raising their profits.
As Australia’s transport landscape is completely reshaped by the pandemic, smart players will innovate to meet the new challenges and ensure they continue to deliver value along the transport supply chain. If they fail to do so, if they continue to remain stuck in the past without prioritising tightly integrated supply chains and systems, they simply risk being left behind.
Troy Searle is founder and chief technology officer of enterprise-grade transport management system (TMS), TransVirtual