F REIGH T F ORWA RDING
Freight forwarders slow in adopting advanced technologies While the industry as a whole is relatively slow at adopting the latest technologies, there are hopes 4IR will change this, writes ITUMELENG MOGAKI
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espite the excitement they might generate, advanced technologies such as artificial intelligence (AI), blockchain, the Internet of Things, drones, virtual reality, and 3D printing have not yet changed the way the extended supply chain operates. “Shipping and freight forwarding are characteristically quite slow in adopting digital technologies,” says Jacob van Rensburg, business analyst at the South African Association of Freight Forwarders. “We like to call these advances ‘disruptive technologies’, because although they are innovative, they disrupt the way we do business.” Van Rensburg says most leading thinkers in the industry believe these innovative technologies will likely transform supply chain management over the next five years. Despite these expectations, though, implementation of many of these has been in a pilot or alpha phase, with continuous development taking place.
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Man vs machine? Some individuals in the industry fear technology will render large groups of people unemployed. Van Rensburg says such fears are unfounded. “Far from eliminating jobs, most experts believe that there will be a significant net increase in employment, with most jobs being transformed by technology into higher-skilled ones. These shifts make it imperative that we prepare people for such jobs.” However, Markus Niewoudt, chartered member of the Institute of Logistics and Transportation, says that in a couple of years, the human factor will be replaced by AI, reducing the industry workforce even more. “We already have robots that control construction machines, self-driving
ELIMINATING THE MUNDANE By taking over the grind of monotonous and repetitive tasks – which abound in the logistics industry – technology implementation will free humans to do more challenging work, such as interfacing with customers, developing better products and managing technology to improve efficiency,” says Jacob van Rensburg of the South African Association of Freight Forwarders.
trucks, and ships and aeroplanes that steer themselves by means of autopilot.” Niewoudt adds that there are numerous factors, though, that are curbing the rollout of fully autonomous systems and it will take some time till we reach that point. “For example, the advanced driver assistance systems meant to enhance safety systems like automatic emergency breaking and blindspot monitoring still require a driver to monitor and supervise them.”
Major changes “As per Statistics South Africa, there are approximately 903 000 people employed in the local transportation industry, of which approximately 51 000 are truck drivers. “The freight forwarding industry in South Africa is huge, with plenty of opportunity for growth,” says Niewoudt. “Automation will have a catastrophic impact on the trucking industry, not to mention across the entire transportation industry.” Charles Dey, executive director of the Chartered Institute of Logistics and Transport
“Far from eliminating jobs, most experts believe that there will be a significant net increase in employment, with most jobs being transformed by technology into higher-skilled ones.” – Jacob van Rensburg
South Africa, says that the major changes impacting supply chain management include: • Online retailing: An exponential rise in online shopping and retailing has led to demand for improved levels of customer service, requiring delivery of high-standard goods at competitive prices within the shortest delivery times. • Automation of equipment and facilities: Human-operated machines and facilities are gradually being replaced by autonomous vehicles and freight-handling equipment. • Digitalisation of processes: All processes, from the time an item is ordered until the final product is delivered, are connected via a common digital platform, which connects not only internal functions but also external third-party suppliers of goods and services. • Integration of functions: Within companies there is a trend towards breaking down the silos that have traditionally separated departments, so that all focus is on the common goal of customer satisfaction. Supply chain management is becoming more of a management philosophy than an executive function. • Mitigation of climate change and environmental destruction: A driving force behind much of how companies are changing the way they do things is the recognition that environmentally harmful practices, processes and procedures must be eliminated or at least minimised.
FAST FACT
The African Continental Free Trade Area is a free trade area that commenced on 1 January 2021. Created by 54 of the 55 African Union nations, it is the largest free trade area in the world, in terms of the number of participating countries, since the formation of the World Trade Organization. Source: World Trade Organization
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