How Has Logistics Evolved Over The Last 20 Years?

In the last 20 years, the logistics industry has changed in ways few could have predicted. When Redwood Logistics began operations in 2001, the company founders sought out to help companies solve their most complex logistics and technology problems.

This goal remains true today. One of the individuals leading the charge at Redwood Logistics is Michael Johnson, Executive Vice President of Strategy.

In the following article, we will examine the changes that have occurred over the past 20 years, provide a transportation industry overview, and outline how Redwood Logistics has evolved with the industry.

How has the logistics industry evolved over the last 20 years?

The transportation industry has become much more dynamic over the last 20 years fueled by advances in technology, data, and a surge in e-commerce. The rise in e-commerce over the past twenty years alone has been propelled by new technology that enables business-to-consumer relationships in place of B2B or retail facing consumption. In addition, e-commerce has opened up global trade and larger markets for sales. In turn, supply chains have had to quickly adopt to demands from their customers. Fast, easy, and (usually) free shipping are table stakes to remain competitive. Supply chains have become more regionalized to better serve demand and provide agility to quickly changing market conditions.

How have shippers evolved over the last 20 years?

Shippers are leaning into technology to orchestrate, manage, and execute their supply chains like never before. In a recent Gartner study, over 85% of professionals have indicated they plan on investing in technology to make their supply chain more resilient and agilie over the next two years. Data-driven transportation management platforms are providing shippers with more tracking visibility, carrier compliance data, rate transparency, and streamlined operations then ever before. These trends will continue as mobile technology continues to shift how and where customers spend their money. Shippers that invest in technology to elevate the customer experience and service that through rapid supply chain execution will be the winners over the next decade.

How have carriers evolved over the last 20 years?

Since the fragmentation of carriers in North America is so great there has been a big disparity in how carriers have evolved over the last 20 years. Technology is helping provide smaller fleets with tools and process automation that was once only used by the biggest carriers. In addition, there are more freight marketplaces for owner operators and small carriers to find loads to move. Most drivers are now using mobile technology in their vehicles for more efficient routing, scheduling, tracking, load selection, and more. Apps have come onto the scene that are essentially a lite-weight TMS to help drivers run their business more efficiently and profitably. At the same time, the industry is still years away from a more efficient macro supply chain model. Until shippers and carriers can collaborate more efficiently across networks technology will not be able to have a material impact on elevating truck utilization.

The role of logistics technology

Over the past twenty years the industry has grown (and is still growing) into more flexible technology solutions that were designed for faster and less expensive partner interoperability. In addition, trends in cloud services allow logistics technology to scale up or down based on the needs of the user, ultimately providing a more cost effective solution to companies small and large.

Third-party logistics (3PL)

3PLs are now employing more robust technology solutions to increase their operational efficiency and better serve their customer and carrier networks. 20 years ago only a handful of brokers were using technology to match carriers to freight. The majority of freight brokers were using pen, paper, and sometime a spreadsheet to try and connect the dots on which carriers to call and when. Off the shelf TMS software came onto the scene in the 2000s which made the process a little simpler but it was still a very manual process. Only until the past 10 years have the more sophisticated brokerages started to employ data driven algorithm, recommendation engines, and pricing software to more efficiently connect freight with capacity. Third party tracking solutions embedded within mobile devices and ELDs have helped propel the success of the digital broker. Technology is a competitive advantage for the modern 3PL and how effectively they use it to serve their partners and streamline operations is the difference between winning and losing.

How has Redwood evolved over the last 20 years?

Redwood has remained committed over the past twenty years to building technology solutions that support our carriers, customers, and operators. At our core, we believe in building technology that will provide a competitive advantage to our partners across the supply chain. Our TMS, Loadrunner, was one of the first digital freight brokerage platforms in the market and powers our shipper facing Rating API and carrier facing digital freight marketplace. RedwoodConnect, the cornerstone of our LPaaS (Logistics Platform as a Service) was designed to better connect all members of the supply chain with no-code integration to drive significant downstream value in automation and system interoperability.

What new challenges will immerge in the logistics industry?

Supply chain planning execution will continue to be challenged by shifting trends in consumption and impacts within global trade. The transportation industry will continue to be challenged by the lack of system connectivity and data logistics. Data platform partners that can help businesses with one to many connectivity will greatly improve execution across the supply chain.

What do the next 20 years look like for the logistics industry?

Data, automation, and innovation collaboration will take center stage as more organizations invest into technology and look to realize more gains from their investments. Multi-dimensional network planning and dynamic pricing structures will replace traditional RFPs and waterfall tendering. Open networks will unleash an abundance of productivity for the industry and more optimization opportunities for all parties in the supply chain. Relationships will matter more then ever as technology helps to automate and replace some of the day to day interactions that exist.

To learn how Redwood can help you solve your most complex logistics and technology challenges, reach out to us today.