Automation coming to logistics processes before trucks

Automation coming to logistics processes before trucks

The benefits of automation for shippers are more readily accessible via desktops than roadways.

ATLANTA — It may be years before there is widespread use of automated trucks, but logistics software developers are working to automate the processes that will route and manage them. Shippers should prioritize automating mundane processes such as carrier selection, a transportation software executive said at the SMC3 JumpStart 2017 conference here Tuesday.

Using embedded analytics to take historical, transactional data and make actual decisions, such as selecting a trucking company, may sound like fiction to some, but “this is very real stuff,” Monica Wooden, co-founder and CEO of software provider MercuryGate, said.

Unlike “driverless” trucks, embedded analytics, a form of artificial intelligence, is being used at many companies today. “Siemens for 15 years has been using embedded analytics to figure out what the cost of a load should be based on historical information,” Wooden said.

“The savings are amazing, and it’s not just their cost savings,” she said. “It’s being able to post potential loads out there as soon as possible and maybe hit carriers who have a backhaul where they need it. It’s a really mature type of intelligence. This stuff is here right now.”

Embedded analytics are software programs or “intelligent apps” embedded in enterprise business software to automate and manage specific processes. In logistics, they are becoming more common in transportation management systems or TMS, Wooden said.

Why isn’t embedded analytics used more broadly to automate shipping? “The hardest thing for people to do is to change,” Wooden said. “One of the biggest points of resistance is that a lot of people are afraid of technology, let alone letting technology make decisions for them.”

For example, when selecting carriers, embedded analytics can weigh several constraints and factors programmed by the shipper. Those constraints may include on-time delivery performance, claims and damage information, billing accuracy, and how often tenders are rejected. “Your decisions are based on a lot more criteria and a lot more data,” Wooden said.

“If you didn’t have this data, you wouldn’t be able to make this more intelligent decision,” she said. “You may find it’s not necessarily the least-cost carrier who winds up being the least cost.”

And once the automated system is in place, you have to trust its decisions. “If you’re in a driverless car, you’ve really got to trust it” Wooden said. “If you’re letting a TMS make decisions about carrier selection, you’ve got to trust it. It’s not about getting tickets to the Falcons-Packers game.”

Businesses also need to have usable “big data” that can be fed to analytics embedded in business intelligence applications. A quick survey of hands among the 500 logistics professionals at the conference showed few have advanced as far as Wooden might hope.

And transportation is often the last redoubt of legacy systems. Many smaller shippers have spent substantial sums on TMS programs, and application programming interfaces, though widely seen as the next wave in communications, haven’t replaced electronic data interchange.

The sentiment at the SMC3 conference is that change is coming, perhaps sooner rather than later. SMC3 announced a deal with Chicago-based Echo Global Logistics that will integrate the trucking association and software provider’s less-than-truckload APIs and Echo’s system.

McLeod Software, of Birmingham, Alabama, this week announced a partnership with API developer project44 that will integrate the Chicago company’s LTL APIs with McLeod’s PowerBroker transportation system for logistics providers and freight brokers.

“These APIs are helping everybody do more analysis in real time,” Wooden said as she kicked off the conference’s Logistics Technology Summit. Enabled analytics and business intelligence applications are expanding “because people are doing a great job on program interfaces.”

The economic benefits of automating mundane shipping processes such as carrier selection, searching for capacity, and route optimization and managing by exception are much more concrete than those of autonomous trucks. And they’re expected to arrive faster.

Research firm Gartner identified embedded analytics or “intelligent apps” as the number two technology trend in 2017. The evolution of these apps is tied to artificial intelligence. They perform an increasingly wide variety of tasks typically handled by humans, Wooden said.

“The goal is to offer more proactive customer service by taking out the mundane things,” freeing up resources, she said. “Shippers are so into getting rid of mundane things — they’re all overworked, they have small departments.” The goal is also to build “predictive” systems.

“Let’s say you have repetitive moves with multiple legs. The system will know this type of move happens a few times each month, and automatically create a template for this load,” she said. “That’s a simple example of automatic decision-making with embedded analytics.”

Predicting estimated arrival times for receivers is another example, she said. “It’s one thing to be late, another thing not to let someone know you’re going to be late.” The more intelligent systems become, the more predictive and proactive, rather than reactive, they can be.

Eventually, the real benefit is not in automating existing processes, but using data science and analytics to find better ways to ship goods. “Probably the number one challenge at MercuryGate is how to educate consumers on best practices so they can improve their processes,” Wooden said. “We’re trying to get people thinking about different ways of doing things.”

Contact William B. Cassidy at bill.cassidy@ihsmarkit.com and follow him on Twitter: @wbcassidy_joc.