Technology: Friends or Foe to Logistics?
Monday, 9th December 2019
It is hard to find a business area that hasn’t been disrupted by tech start-ups in recent years; they have challenged traditional providers in almost every market, providing cheaper, easier and more accessible services for the ‘internet generation’.
Financial technology start-ups have capitalised on the population’s distrust of traditional banks by offering the same services, but cheaper and better. Taxi firms across the world have protested against the brutal simplicity of Uber’s business model. Start-ups’ success knows no bounds; according to the latest report from PitchBook Data Inc and the National Venture Capital Association, they attracted $15 billion in venture capital funding in the third quarter, in nearly 6000 funding deals.
How are Logistics Different?
However, logistics is one sector that technology start-ups have found it hard to break into, but not for much longer; there are a number of trends that are likely to take off going into the New Year.
The exponential growth of crowdfunding has shown how easy and effective it can be to draw on the power of people, and it has as much potential in the logistics sector as any other. At the forefront of this crowdsourcing, revolution is Nimber, a peer-to-peer delivery service aiming to cut delivery costs for consumers by using ordinary people to deliver parcels. Those who can deliver packages – ‘bringers’ – list their regular routes on the site. Those that want an item delivered specify where it is going from and to, and if there is a match, the service allows them to connect and talk through the details. The service facilitates a delivery with minimum staff and expenditure by Nimber.
Other services are aimed at ease. As we mentioned in this previous post, Millenials are used to getting whatever they want, when they want it – and delivery is no exception. Shyp is a start-up that has already discovered the earning potential in this. Particularly aimed at small businesses and individuals, it offers to simplify shipping by picking up products, packaging them and selecting the appropriate delivery method; in short, their USP is taking the hassle out of delivery for the consumer.
However, start-ups have a long way to go before they really challenge the logistics industry. Using strangers for deliveries flags up obvious security issues for many customers, and some start-ups have already found it too hard to compete with the traditional companies dominating the market; one up-and-coming company, Shipster, has already closed due to “insurmountable business challenges.”
The Benefits of Utilising New Technology
What traditional logistics companies need to take away from the rise of start-ups is the importance of utilising new technology, rather than running from it. Here at FFWD, we have just updated our website, providing customers with the best possible results on Google, website performance and more.
Several new online platforms offer a comparison service – by partnering with one and offering competitive rates, the benefits for both local and international couriers are obvious.
Those firms that can recognise the potential of incorporating modern technology into their business model, perhaps by partnering with start-ups, will be the ones who will retain customers and succeed in the internet age. FFWD offers a new, easy to use website and online pricing tool.