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Supply Chain Insights

Technology Trends Paving the Way for a Greener T&L Industry

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Michael Dyson, VP of Sales, APAC at SOTI

It’s well known that the Transportation and Logistics (T&L) industry is a significant contributor to global and economic performance. With much of our day-to-day activities dependent on the ability to trade and transport goods and services across the globe, the T&L sector has never been as important as it is today.

The trade-off, however, is that all this activity equates to a substantial contribution to greenhouse gas emissions, environmental degradation and climate change overall. As a result, there is now a growing push for T&L businesses to transform and integrate environmentally sound initiatives into operations, so they are better positioned for a more sustainable and resilient future. The key, T&L businesses need to proactively invest in the latest technology to streamline operations and match the high demand in a way that also works to reduce the carbon footprint.

There is now considerable pressure on the industry, and incentives from within it, to make the industry more environmentally sustainable. The road-freight sector is responsible for over 24% of CO2 emissions worldwide. If countries are to meet their commitments under the Paris Climate Agreement, they need the road-freight sector to become more sustainable.

To meet these pressures, the sector must identify the current sustainability gaps and prioritise investments in technology that help to fill them. If T&L businesses combine mobile and IoT technology with an integrated business-critical mobile strategy, they will undoubtably see not only gains in performance, but a more sustainable means of operating.

Better visibility makes for greener operations

Over the past decade, sustainability has been a hot topic in the T&L industry with more businesses looking at the environmental benefits of new technology. From making operations more efficient to using more sustainable resources, being environmentally-conscious remains a core focus. Something of particular interest within the industry is the use of Internet of Things (IoT) solutions such as telematics.

Telematics combines the use of Information Communications Technology (ICT) to monitor a wide range of information relating to an individual vehicle or an entire fleet. Telematics systems gather data including vehicle location, driver behaviour, engine diagnostics and vehicle activity, and visualise this data on software platforms that help fleet operators manage their resources.

The use of telematics is quickly growing in popularity due to the positive impact it has on operations. Not only do these IoT solutions work to streamline industry processes to save costs, they also allow businesses to easily comply with new regulations.

Aside from this, telematics offers many environmental benefits for T&L businesses wanting to reduce their carbon footprint by enabling operators to monitor their vehicle’s performance and save costs, reduce travel times and switch to more energy efficient fuel options.

With a multitude of other operational benefits, the tremendous potential telematics can have towards making the world a cleaner and safer environment goes far beyond just fleet owners, operators and drivers, but to the supply chain at large. The data collected through telematics is extremely valuable for identifying trends and making improvements to operations to better initiate sustainable practices.

Reducing the carbon footprint of transportation

With the impacts of COVID-19 and the accelerated demand for T&L services, the pressures on the sector have been immense. However, it will be the businesses that choose to innovate their operations with technology designed to efficiently move goods in a smarter, more sustainable way that will see themselves remain competitive in a greener future.

Advanced solutions such as telematics and IoT technology work to support the reduction of carbon emissions and lead the industry into a greener future by optimising the overall flow of logistics, which naturally helps to reduce emissions. These technologies track vehicle and individual driver information to support improved vehicle performance and driver behaviour, thereby reducing the overall consumption of fuel and outward emissions.

With the integration of technology solutions, T&L businesses can not only improve sustainability standards from the get-go but make an evaluation on how to react to any other detrimental impacts current operations are having on the environment to make further, longer-term improvements.

Efficiency is the key to T&L sustainability

In SOTI’s latest report on the T&L industry, 76% of Australian T&L businesses agree that mobile-first technology will play an important role in last-mile delivery over the next five years. A further 50% said that mobile-first technology used to increase the speed of the delivery process and improve the visibility for customers to track their orders will improve operational efficiencies significantly.

With the many advantages that come as a result of investing in and deploying technology, the most business-critical outcome from a T&L operator’s perspective is the improvements to productivity and efficiency. The use of technology, including mobile-first technology, to automate operational tasks such as record keeping, toll paying and delivery logistics, for example, allow T&L drivers to operate in a more productive and efficient way. And while this is the priority for T&L businesses making investments in technology, another big motivation is becoming more sustainable.

The fact is technology investments that improve visibility, efficiencies, productivity and accuracy are also likely to increase a T&L business’ sustainability credentials. That’s because it means T&L drivers are completing tasks correctly the first-time round, and the business is making assessments and changes to operations such as using data insights to deliver more orders to the same place at the same time or calibrating quicker route options.

Transport modes have also seen several advances which work to proactively reduce carbon emissions. From larger vehicles, aircrafts and vessels to the broadening use of automated guided vehicles, transport modes will continue to change in the future to address issues of efficiency and sustainability.

Larger means of transport are fast becoming a greener approach to transporting goods, with larger vehicles being a way of not only compensating for rising transportation costs but revolutionising the potential for goods to be transported in a more sustainable way – such as compiling many goods on the same vehicle that all need to go to the same place. Moreover, innovative modes of transport such as autonomous and self-controlled systems may also be the frontrunners when it comes to the changing face of transport in the future.

With the current challenges facing the world today, there are many changes that can help better position the T&L industry to operate on a greener level. With the proactive use of technology to optimise industry operations, the T&L sector can start on an innovative path towards a sustainable future.

With an increased shift toward mobile and IoT technology in the T&L industry, there is also a need for businesses to have an advanced mobile-first strategy in place ensuring that all devices are centrally connected, secure and properly integrated into operations. For T&L businesses looking to adopt new technology to recalibrate their sustainability credentials, IoT management solutions and secure mobility management solutions offer an integrated solution to manage and maintain the security of all mobile devices and connected peripherals within operations.

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Supply Chain

bp and Uber sign Global Strategic Delivery Partnership

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  • bp and Uber sign a new global strategic convenience partnership aiming to make more than 3,000 retail locations available on Uber Eats by 2025.
  • The partnership extends current local arrangements in Australia, New Zealand, Poland, South Africa and the west coast of US, adding the UK and eastern US in 2022 and with plans to launch in other European markets from 2023.

Today, bp (NYSE: BP) and Uber Technologies, Inc. (NYSE: UBER) are announcing a new global strategic convenience delivery partnership, extending their existing local arrangements to reach more consumers across the world. Together, the partners will offer a huge range of quality convenience products, including fresh and prepared ranges, from select retail locations.

bp is the first convenience retailer to team up with Uber Eats on a global level and aims to have more than 3,000 retail locations available on the delivery platform over the next three years. The partnership supports bp’s goal of growing its access to customers and expanding its delivery footprint, in response to soaring demand for food, groceries and everyday essentials brought to the door.

The new partnership covers retail sites in Australia, New Zealand, Poland, South Africa and the west coast of US. Sites in the UK and eastern US will be added to the app for the first time this year, with plans to launch in other European markets from 2023.

“We’re thrilled to team up with Uber Eats globally giving us the opportunity to reach many more consumers online in addition to those who currently visit our retail sites. We’ve seen how the pandemic has accelerated customer demand for delivered convenience and this partnership will allow us to scale up quickly on the Uber platform. And for the first time, we will be able to offer delivery options to existing customers on our own BPme app by the end of 2023,” said Emma Delaney, executive vice president customers & products, bp.

With 20,500 bp retail sites across the world and 550 million customers living within 20 minutes of a bp retail site, the partners see enormous opportunities for growth. bp sites offer a range of products tailored to local markets which may include hot and cold drinks, food-for-now options as well as staple groceries, fresh produce and ready meals, plus wine, beer and flowers.

  • In the UK, customers will be able to access a range of Wild Bean Café, and other branded food and products via Uber Eats – with the first 120 sites due live on the platform by the end of June.
  • In the US, the offer will be made available to bp’s network of independently owned retail locations to support the growth of their businesses. The goal is to make it easy for these partners to sign up to the Uber Eats platform and access benefits based on bp’s scale.

bp will benefit from Uber’s global brand and operations footprint, best-in-class technology for dispatching orders, and more than 4.4 million drivers and couriers on the platform worldwide.

As part of the agreement, Uber Eats and bp will work to introduce delivery options onto bp’s own app, BPme – initially planned to be available in the UK, US and Australia by the end of 2023 – powered by Uber Direct. This new offer will allow bp to directly connect its customers to delivery riders, making Uber Eats the trusted partner in fulfilling these orders. Since 2019, bp has seen a three-fold increase in users of the BPme app, with 16 million active loyalty users worldwide.

“With more than 20,500 locations around the world, bp’s reach is enormous—making them critical partners as we pursue our ambitions of helping consumers across the world get what they need delivered to their doorsteps,” said Pierre Dimitri Gore-Coty, Uber’s SVP of Global Delivery. “We are proud to support this next phase of the company’s convenience growth through this delivery partnership and look forward to deeper collaboration in the future.”

bp and Uber already work together in mobility with bp providing electric vehicle charging for Uber’s ride-hail drivers. The companies will explore other areas for future cooperation in convenience, including opportunities to utilize low carbon delivery methods to fulfill orders from bp sites.

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Supply Chain Insights

Officeworks to own and control Distribution Network.

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Officeworks invests in supply chain capabilities, will own and run it’s distribution centre.

Officeworks has changed its supply chain strategy in the wake of COVID-19 issues, with a view to owning and controlling a network of distribution centres across the country.

“When I joined we had a different strategy around our supply chain,” Officeworks managing director Sarah Hunter told The Australian, referring to the company’s previous outsourcing strategy.

“So we’ve worked really hard now to build our supply chain capability. We were in the process of outsourcing it, we are now in the process of building that capability.

Officeworks recently opened Australia’s first solar-powered robotic distribution centre in Derrimut, Victoria.

“We started in Victoria, and we have had approval to build, now board approval to invest, and we are building a new, similar (distribution centre) operation in Western Australia. That’s exciting,” she said.

“Looking at our capital expenditure three, four, or five years ago it’s a material step up in our investment in our supply chain.

“Most importantly for us as a business is that every team member who worked at the old facility has been completely retrained,” she said. “We have 120 team members who are now fully trained in how to work in an automated state-of-the-art environment.”

The need to control its own distribution became clear during the pandemic.

By December, Officeworks saw 46 per cent of its business come from online, including click and collect. Now it needs to move to retain this growth at a cost effective scale.

“We have created a facility that’s not only more productive, it’s going to enable our online business to grow in Victoria and into NSW at the rate that we expect our online business will grow.

“So now we have the capacity, the cost per pick is materially lower because it’s much more productive. It’s a win-win scenario for us. We’ve kept everyone employed with really great job security. We’ve scaled them up to work in the supply chain of the future.

“And on top of that, we now have the capacity for growth in Victoria that frankly we were struggling with through COVID.”

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Logistics

E2open Acquires Global Multi-Carrier E-Commerce Shipping Software Platform Logistyx Technologies for $185 Million

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Combination brings complementary cloud-based solution and global multi-carrier e-commerce capabilities to E2open’s networked, end-to-end supply chain operating platform

E2open Parent Holdings, Inc. (NYSE: ETWO), a leading network-based provider of a cloud-based, mission-critical, end-to-end supply chain management platform, has acquired Logistyx Technologies, a leader in global parcel and e-commerce shipping and fulfilment technology.

With the combination, E2open enhances its global footprint for multi-carrier e-commerce shipment management, offering companies a complete range of shipping capabilities needed to scale and respond to growing market needs.

“We are excited to welcome Logistyx Technologies’ team, clients, and capabilities to E2open,” said Michael Farlekas, chief executive officer at E2open. “The demand for e-commerce shipping capabilities continues to grow as companies look for more flexible and cost-effective ways to deliver products to consumers. This combination makes E2open the most comprehensive and integrated shipping solution provider, which covers all shipping modes including ocean, air, road, rail, and parcel, and is powered by a global network of carriers and logistics service providers. Logistyx is complementary to E2open’s existing platform, enabling E2open’s world-class clients to orchestrate their supply chains from demand to fulfilment, to supply.”

“We are excited to welcome Logistyx Technologies’ team, clients, and capabilities to E2open”

Michael Farlekas, chief executive officer at E2open

“The Logistyx team is thrilled to combine with E2open to enable more companies to ship smarter and benefit from the largest supply chain platform and network available,” said Geoffrey Finlay, chief executive officer at Logistyx. “We provide our customers, which include top retailers, manufacturers and logistics providers, the automation, visibility and flexibility needed to simplify global fulfillment and compete in an omnichannel world – all within a one-stop, connected platform.”

Compelling strategic benefits to accelerate growth

The Logistyx combination with E2open accelerates subscription revenue growth and unlocks strategic benefits for clients, including:

  • Increased reach as a global leader in transportation management for parcel shipping: Logistyx’s global parcel system augments E2open’s direct-to-consumer e-commerce offerings, creating a complete global footprint for multi-carrier parcel management.
  • Enhanced global parcel carrier network: The combination adds a carrier library of over 550 global carrier integrations including UPS, FedEx, DHL and USPS, to E2open’s leading network. The solution manages the carrier certification process to keep clients in compliance, while making it easier to compare and review spot rate options, which is critical in a capacity-constrained environment.
  • Expanded client base: E2open’s client base will be enhanced by Logistyx’s strong global enterprise clients, which include many of the world’s leading retailers, manufacturers, and carriers.
  • Augmented product offerings: Logistyx’s clients will benefit from a combined portfolio that will not only expand shipping modes beyond parcel, but also enhance upstream capabilities to better orchestrate manufacturing, distribution, channel and trade operations.

Transaction Details

E2open acquired Logistyx Technologies for a total purchase price of $185 million ($250 million AUD), including $90 million paid in cash at closing and the remaining balance to be paid in two additional installments at 90 days and 180 days post-closing. E2open has the option to finance the remaining payments through cash or a combination of cash and E2open stock issued to sellers, at the company’s discretion.

The transaction was unanimously approved by E2open’s Board of Directors. Additional details about the agreement will be contained in a Current Report on a Form 8-K to be filed by E2open with the U.S. Securities and Exchange Commission (the “SEC”). For other related investor relations disclosures and presentation materials, please visit the investor relations section at e2open.com

Financial Highlights

In calendar year 2021, Logistyx grew in line with E2open’s current growth rate and achieved approximately $40 million in revenue. The combined business is expected to be accretive to E2open’s current organic growth rate given the cross-selling opportunities the combination creates.

The combination reflects a purchase price of approximately 11 times adjusted EBITDA when anticipated cost synergies are fully realized, which are expected to be within 18 months of closing.  E2open will include the full impact of the acquisition on revenue and adjusted EBITDA in conjunction with fiscal 2023 guidance, which will be provided with the fourth quarter earnings release scheduled for late April.

Berenson is serving as exclusive financial advisor to E2open, and Troutman Pepper is serving as legal advisor to E2open.

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