Traceability: a key service in the transportation industry

Traceability is a vital, though currently under-leveraged, part of transportation operations. At the moment, most medium-to-large companies whose core business and/or client relationships rely on road freight transportation operations dedicate significant amounts of time and resources to tracking and tracing shipments manually. This, in turn, also means dealing with issues caused by lack of visibility over the status of shipments. Indeed, more than 90% of short-haul shipment operators do not yet have the technological capabilities to provide real-time traceability or, in turn, digitalise proof of delivery (POD). This is partly because the transportation supply chain is composed of many different actors, meaning that first and last mile road freight transportation providers are very fragmented. This understandably renders the consistent tracking of shipments across the entire supply chain very difficult.

Furthermore, in such a busy market, these providers are incentivised to re-sell shipments in order to make extra money, acting as brokers in the market. This type of behaviour worsens the quality of the service provided and creates a lose-lose situation for both the companies who need to ship goods (shippers) and the carriers who do the shipping. The intermediary ‘broker-like’ organisations get a bigger cut, while carriers receive less and shippers pay more. On top of this, shippers lose traceability and, therefore, are more likely to lose control over proof of delivery (POD). All actors in this market - whether transportation intermediaries, shippers or carriers - urgently need solutions to monitor the status of shipments without needing to make endless phones calls and write infinite emails.

With digitalisation, the real-time evolution of the position of a shipment can be tracked from end-to-end, in turn improving other related operations such as the use of slots in docks, routing, inventory processes and more.

Who is involved in transport logistics?

There are many types of companies for whom transportation is critical, but not a core part of their business. Take retailers, for example. These companies sell directly to either B2B or B2C consumers, like Carrefour or Alcampo, and are dependant on transportation in two parallel ways: firstly, they depend on suppliers to keep their distribution centres and/or warehouses well-stocked and well-organised; secondly they depend on transportation providers to “feed” their final point of sales - in other words, to complete local distribution from the distribution centres to stores.

Then, there are the companies more directly involved in transportation: the carriers and transport providers (intermediaries). Among these are freight forwarders, logistics providers and transportation companies. These companies need to consistently provide a high-quality service in order to acquire and retain their best clients. To put it simply: they need to maintain a constant flow of goods coming in and out to make sure that their clients (normally retailers) are well served. This means no cancellations due to lack of vehicles, a good on-time rate in terms of pickups and deliveries, PODs always delivered, and proactivity and effectiveness with respect to problem and incident-solving, among other things. All of these players - shippers, providers and carriers - are highly affected by levels of traceability.

Why is traceability still an issue in this industry?

There are a number of reasons why achieving true traceability is still so difficult in transportation logistics. Firstly, as the industry is highly fragmented, there is very little incentive for companies to come together to build a standard and effective traceability solution for the whole market. Secondly, as a result of this, there is a big lack of transparency in the sector, with suppliers deliberately not providing their clients with real-time or reliable data on the location of shipments or the carriers used.

This is because transport companies that subcontract do not want to run the risk of shippers knowing that subcontracting is happening. This is in case they don’t like it, or they go on to build a personal link with the carrier(s) themselves, bypassing the original provider and rendering them obsolete. Finally, lack of digitalisation across the sector means that retailers, distributors and producers alike cannot access the information needed to optimise their operations and make them proactive, for instance by preventing an incident from happening, rather than reacting once the incident has already occurred.

Why is traceability so important?

All companies involved in transportation logistics need traceability. Transport intermediaries and carriers need to make sure they’re handling client shipments correctly and ticking all the boxes in terms of on-time deliveries and pick-ups. On the other hand, clients (for instance, retailers) need traceability in order to make sure their goods are getting to the end-consumer consistently and punctually in order to maintain sales. With a huge volume of cargo being shipped across the world daily; one minor delay can mean serious losses for all parties involved. Traceability across the supply chain is crucial to not only to improving productivity and optimising operations to ensure a high quality of service, but also to prevent costly incidents, such as delays, from occurring.

How Ontruck can help with traceability

All players in the transportation supply chain need to have access to all relevant information about shipments, via reliable and effective organisational solutions and processes. This is where digitisation is key, giving companies access to the real-time information needed to make their processes more proactive and help them cut unnecessary operational costs. Ontruck’s driver app does precisely this. Firstly, it ensures that the driver and vehicle indicated as the carrier in the shipment are actually those shipping the goods. Secondly, geolocation is used to connect carriers from Ontruck’s network of truckers to the closest and most suitable shipment for them. Geolocation can additionally inform the client about the status of the shipment and proactively inform him/her about any potential changes to delivery, such as delays. This means that subsequent subcontracting is avoided and real traceability is guaranteed.