Freight and Logistics Digital Services: Adjusting Operating Models to Align to Accelerated Demand

The pandemic and the ensuing e-commerce boom increased demand for freight and logistics (F&L) services, putting pressure on F&L providers to offer more services. There is an increasing demand for faster delivery times at lower costs. In response, the sector is accelerating digitalization initiatives to balance these increasing customer expectations while managing operational costs.

These emerging trends, and others, are covered in Avasant’s Freight and Logistics Digital Services 2022–2023 RadarView™. The report is a comprehensive study of freight and logistics digital service providers, including top trends, analysis, and recommendations. It takes a close look at the leaders, innovators, disruptors, and challengers in this market.

Avasant evaluated 28 service providers using three dimensions: practice maturity, partner ecosystem, and investments and innovation. Of the 28 providers, we recognized 12 that brought the most value to the market during the past 12 months.

The report recognizes service providers in four categories:

• • Leaders: Cognizant, Infosys, and TCS
  • Innovators: Accenture, HCL, and Tech Mahindra
  • Disruptors: Atos, IBM, and Wipro
  • Challengers: CGI, Unisys, and Virtusa

Figure 1 below from the full report illustrates these categories:

“The freight and logistics industry outlook remains strong, with demand surging because of the e-commerce explosion in recent years,” said Carlos Hernandez, Avasant partner. “But the sector needs to accelerate technology adoption and prioritize investments to reduce operating costs.”

The full report provides a number of findings and recommendations, including the following:

1. 1. Increase integration of digital technologies to enable cost-efficient operations: Accelerate proliferation of AI/ML and big data in automated delivery scheduling and route optimization, and automate warehouse operations by leveraging automated guided vehicles and smart picking robots.
   2. Manage customer expectations by transforming business models and developing a digital strategy: Transform business models to support changing customer demands and facilitate last-mile and same-day deliveries and simplify the returns process for shippers and consumers.
   3. Define sustainability objectives and a road map to achieve them: Increase electric or hybrid fleet for both long and short haul distances. Develop solutions to enable fleet rationalization and bring customer awareness associated with delivery-related carbon emissions by enabling data visibility.

“The industry is undergoing immense change,” said Parinita Singh, principal analyst at Avasant. “There is a critical need for enterprises to identify technology initiatives that not only bring process efficiencies but also transform their businesses and increase control over demand.”

The full report also features detailed profiles of 12 service providers, along with their solutions, offerings, and experience in assisting freight and logistics companies in digital transformation.

This Research Byte is a brief overview of the Avasant Freight and Logistics Digital Services 2022–2023 RadarView™ (click for pricing).