Welcome to “Expert Insights” – an interview series where we talk with industry thought leaders and experts about different topics surrounding logistics and supply chain – gathering their insights and experience firsthand.
We continue with Mike Bogen, Supply Chain Collaboration Evangelist and Industry Expert. Mike is the Managing Director of digi-trust.eu, a newly formed venture with a focus on legally compliant horizontal transport collaboration supported by purpose built digital tools; and CEO of Giventis International BV, a Netherlands-based company that develops and deploys information management and BI digital tools to facilitate logistics collaboration. He’s also the founding member and pilot case leader for the NexTrust EU funded research project. digi-trust.eu was created as the commercial extension of the NexTrust project and is now a subsidiary of Giventis. Mike’s industry experience spans the U.S., Asia and Europe in logistics software technology and transportation management.
This is the third of a four-part series with Mike. To provide context to the current climate, the entire interview was conducted in late February 2020, prior to the worldwide spread of COVID-19. You can find Part 1 here and part 2 here.
We talked earlier about digitalization. Twenty years ago, we were talking about shippers and carriers adopting new technology. Do you think that shippers and carriers have truly embraced technology? Or is there still, even in this day and age, a slow rate of adoption? Particularly on the carrier side?
There’s technology and there’s technology.
What do you mean?
Companies are constantly automating and upgrading a lot of their supply chain and logistics functions. TMSs, visibility on a limited scale basis, things like that. Yes, it’s growing. But the right technology, in other words, applying technology that solves a problem versus simply because it’s the cool thing to do at the time? I think we have a long way to go. I think applying technology to create more sustainable situations isn’t happening the way it should.
Again, if you think about collaboration - companies like Nistevo [web-based collaborative logistics network] tried to pioneer it almost 20 years ago. And it didn’t go anywhere. A lot of that had to do with a lack of investment in the right places, and thinking in terms of ‘how do I apply technology to collaboration when I’m only having to pay a part of it’ which means you have to create an entity that’s going to manage it. And you feel like Don Quixote sometimes trying to do that, continuing to tilt at windmills.
Ask yourself, why aren’t there more companies deploying collaboration centric, network centric – as opposed to enterprise centric – technology? Because you have to get a group of organizations, a group of entities to pay for it. One company isn’t going to say, ‘I’m going to take on collaborative TMS because I have to be able to sell it to other people’. Who provides predictive end-to-end visibility across the supply chain? Visibility that ties all the pieces together is technologically available today, but how do we do it?
To your comment that you think there is still a long way to go in terms of applying the right technology, what do you think needs to happen to move along those who haven’t adopted the right technologies? What do you think is going to be the key driver to get shippers and/or carriers on board to embrace the right technologies to solve their problems?
That’s a good question. From the shipper’s side, and from the technology provider’s side, you have to deliver a solution that they can fully understand the ROI behind. ‘I’m going to invest in something, I’ll need to know what the payback is.’ So that means that the technology provider has to have a solution that does solve a problem and must be able to demonstrate the ROI – and the shipper must be able to understand it and adopt it.
What is your impression of autonomous vehicles and their application in logistics?
It’s still a vehicle. It still has to operate. If nothing else, you’re reducing your cost. I mean that’s another factor in the market - there is a huge shortage of drivers. And that’s the same in the U.S. as it is in Europe. Don’t quote me, because I don’t remember where it came from, but I remember reading somewhere that the average age of a truck driver in Germany is 50 years old. And people don’t want to go into that business. The transport industry is running out of drivers. So, one of the answers is wow…think about taking 30 truckloads and putting them on one train. That’s 30 less drivers you need. And you’re not putting anybody out of work because they’re not there to work in the first place.
The trucking industry in Europe has been moving East in terms of sourcing labor and sourcing drivers. One of the biggest temperature controlled operators in Europe is a company called Girteka, and they are headquartered in Lithuania. And I guarantee you if you were to talk to them, they’d say it is a struggle for them to maintain drivers. In the U.S., we already know it’s not exactly a sought-after job. And with unemployment rates dropping the way they are, it’s only going to get worse.
What do you think are the next issues and challenges logistics and supply chain technology providers need to tackle as we look to the future?
Delivering on what we need today. Not thinking about the next best software idea but solving delivering on what the problems are today.
Look for the final Part 4 of our “A-List Insights” Series interview with Mike Bogen next week where we discuss the role of 4PLs and the future of transportation and logistics.