Digital Supply Chain: The Next Big Breakthrough in Trucking

The digital supply chain encompasses more than just the truck, but also the entire transport ecosystem. We’ve already begun to see a merging of different technologies to create intelligent, complex and highly flexible systems that will help accelerate trucking into the future.

At a high level, it is the use of data and network-based support systems for managing and optimizing trucking transport operations, using many forms of digital technologies.

At a process level, it’s the full integration of connected trucks for real-time logistics data across the entire supply chain, from parts and materials suppliers to manufacturers to warehouses and distributors, ending with the end customer. The result is improvements in efficiency, transparency, flexibility, cost efficiencies and productivity.

Experts contend that within the next four years, moving toward a digital supply chain model in trucking (focused primarily on class 6 through 8 heavy trucks) will save over $236 billion dollars in current inefficiencies.

The many different components and technologies that comprise a digital supply chain infrastructure: connected vehicles, cloud services, big data, networks (5G), systems (software, hardware, mechanics) and artificial intelligence (current and future state).

And, unlike other technologies that are still being developed and tested on roadways, digital supply chain innovations are already being actively adopted. Fully digitalized trucking may be many years away, but there are pieces of it already being implemented.

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Cloud computing and storage, along with sensors and automatic identification, are leading the way in use today at 50 percent and 49 percent adoption, respectively. Over the next two years, the adoption of those technologies is expected to grow to 73 percent and 70 percent, respectively.

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The technology that most respondents said will be adopted the most within the next two years is inventory and network optimization, forecasted at a 75 percent adoption rate.

The disruptive effects on our industry

There’s no doubt that the impact of digitalization on the trucking industry will be extensive, profound and ultimately disruptive. The digital supply chain has already begun to completely transform how freight is transported on the world’s highways. Old business models are starting to become obsolete, and new ones are emerging.

Driving that disruptive change are greater expectations from customers for real-time information and order delivery. Plus, there’s the ever-present need to reduce unplanned downtime, increase driver safety and maximize asset utilization.

The digital transformation of the industry creates an opportunity for “breakaway” business models and offerings we’ve never seen before or had the chance to benefit from.

As connected trucks and infrastructure systems interface and process valuable information, the actionable and insightful data that comes out of this flow will be the driving force behind operations.

The Greatest Impact of the Digital Supply Chain in Trucking Can Be Broken Down Into Three Areas:

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Major variables positively impacted by efficiency improvement include core processes, fuel consumption, insurance costs and 
asset utilization.

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Performance gains and reduction in turnover will 
result in cost savings.

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Deadhead, driver utilization, trailer and load capacity and unplanned downtime are all areas positively impacted by a digital supply chain.

The two major digital supply chain technologies in trucking

Although a digital supply chain pervades nearly every aspect of trucking operations, two technologies are at the forefront of digitalization. These technologies are telematics (or connectivity) and load matching.

Telematics & Connectivity

Telematics is the force helping the industry become connected. From connected trucks to similarly connected infrastructure, systems and partners, this constant stream of data is the basis for so much of trucking’s current and future potential.

In fact, the current industry environment presents multiple structural challenges that are driving telematics to a must-have status for every entity that touches trucking.

Growth in the truck connectivity market is being fueled by government regulations, efforts to increase efficiencies 
and concerns about driver and vehicle performance.

Load Matching

Although contracts are still responsible for more than half of all freight movement, spot markets currently comprise up to 40 percent of hauled loads. Most spot market freight is handled by load boards with interactions – often by phone – happening between shippers, brokers, carriers and owner operators, all hurriedly competing for business on dozens of boards.

Technology is starting to catch up with this cumbersome load board process, and digital innovations offer a better, much more efficient way. A major driver for a fully integrated digital supply chain is the network of connected vehicles and the information gathered from them. The world of connected trucks offers greatly increased availability of data, which can enable digital load matching and load maximization.

Online and cloud-based load matching, specialized software and mobile apps have made it possible in recent years for trucks seeking freight and freight-seeking trucks to be matched nearly instantly. A fully integrated digital supply chain takes the concept of digitalized load matching a few steps further.

A Fully Integrated Digital Supply Chain Can

  • Make it possible to significantly speed up shipper-carrier transactions by increasing the ease of finding, booking and shipping freight.
  • Leverage real-time data from connected trucks for total visibility into shipment status.
  • Quickly and very efficiently locate capacity for loads.
  • Use emerging technology, such as machine learning, to streamline bidding and negotiate pricing.
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The International Truck POV on the digital supply chain

At International® Truck, we embrace digital supply chain technology and are continuing to develop it through OCC, helping to lead the trucking industry into the digital and connected future.

We also understand that uptime and improved total cost of ownership are top industry priorities. Our vision is to continue to advance our leading vehicle telematics hardware, connectivity technology and data cloud platforms while partnering and collaborating with trucking service providers.

Our OCC platform has evolved from a remote diagnostics tool to a unique data and solutions backbone.

Besides greater uptime for vehicles, we see tremendous potential with a digital supply chain in many major areas of trucking:

  • Help digital disrupters like load matching offer access to trucks and prime customers
  • Lower costs with economies of scale
  • On-time asset readiness, automated exchanges
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For a deeper dive into our point of view on the digital supply chain,