The transport and logistics (T&L) industry plays an important role in the global supply chain network. In Asia Pacific, the T&L industry is very dynamic. It is driven by economic growth, evolving customer demands, and rapid technological advancements. After the pandemic, T&L firms are going through a transition phase, changing customer expectations, and the arrival of new competition from start-ups and customer-turned-rival logistics operators.
HERE Technologies, the location data and technology platform, published an inaugural study, APAC On The Move. The report provides insights from transportation and logistics professionals across Asia-Pacific (APAC) on the current technology trends and practices that are shaping supply chain, fleet, and logistics management.
The findings of the report are the extent to which end-to-end asset tracking and shipment visibility remain a challenge for logistics companies three years since the onset of the pandemic. Nearly 90% of APAC logistics companies surveyed have cited technology implementation challenges as their biggest barrier to achieving real-time end-to-end supply chain visibility, despite the motivations to improve customer satisfaction and operational efficiency.
Big Challenge: Technology Partnerships and Implementations
More than half of the firms surveyed (52%) have cited the challenge of identifying the right partners or suppliers as their biggest barrier to technology implementation. In mature economies like Australia and Singapore, the concern of potential disruption to existing processes and services ranked high. In India and Malaysia where the logistics industries are fragmented, knowing where to even begin with technology implementation is a concern.
The surveyed logistics companies want turn-key solutions that are easy to implement, less expensive, less time-consuming, and minimum labour-intensive system overhauls. According to the study by HERE, software integration challenges with existing infrastructure (52%), the lack of time to implement the solutions (39%), and high implementation costs (39%) are the main barriers to adopting logistics assets tracking and shipment/cargo monitoring solutions.
Still Rely on Manual Tracking
The pandemic has exposed the vulnerabilities of manual interventions in the global supply chain. Yet, according to the survey, approximately 45% of APAC logistics firms are using asset tracking and shipment monitoring software in combination with manual inputs to track assets, shipments, and cargo.
Manual processes have a higher chance of creating gaps and vulnerabilities within supply chains, and this shows that a large number of companies still do not have a resilient infrastructure in place. Real-time and automated tracking solutions on the other hand provide opportunities to accelerate innovation and tackle disruptions promptly.
Across APAC, the Japanese logistics industry is leading the way with 70% of companies surveyed, having moved to tracking assets in real-time with no manual inputs. Japan’s logistics sector is facing the looming ‘2024 Problem’ as stricter regulations – limiting truck drivers to a total of 960 hours of annual overtime work – kicks in from April 1, 2024. As the industry prepares for this impending crisis, the move to track assets in real-time is a critical step to addressing and alleviating labour shortage in Japan.
Tech investments motivated by customers first and financial benefits a close second
With intensifying competition and rising customer expectations in the region, the logistics sector wants to improve fundamental business performance indicators. The strongest motivator for adopting logistics asset tracking solutions is to increase customer satisfaction (48%).
On the other hand, APAC logistics companies are also prioritizing financial benefits, such as increasing revenue (47%) and gaining a competitive edge in the market (41%), when purchasing logistics asset tracking solutions.
Investing in Future Technologies and Opportunities
The study confirms that most logistics companies in APAC are already using a form of Internet of Things (IoT) technology. IoT applications for inventory management (63%), warehouse management (61%), and order management (50%) are the most popular among logistics companies in the region.
Looking ahead, more than a quarter of logistics companies in APAC are planning to invest in drones (33%), robotics (30%), artificial learning, and machine learning (29%). These technologies have been identified by the logistics sector to seize opportunities and create lasting competitive advantage (41%), improve operational efficiency (40%), and increase customer satisfaction (39%).
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