Founder Notes
SaaS is Transforming the Logistics Industry
SaaS is a symptom of a societal shift towards the immediacy and usability of data. Data, of course, comes in myriad forms. It can be as vital as a minute-by-minute measure of a diabetic's blood sugar levels, or as mundane as the digital tracking of all your expenses on a mobile application.
  • Consider that Amazon has already begun a fresh produce and grocery delivery service for Prime Fresh members.
  • Or that consumers want a security system that synchronizes with their mobile phone, so they can monitor the situation from wherever they are in the world.

Whatever the example, the desire to turn data into actionable insight is everywhere.

As we know, SaaS does not just impact the consumer marketplace. In the B2B market SaaS is changing the operational landscape in several industries that require better access and transmission of data across multiple networks and channels.

A great example of innovation in SaaS can be seen in the logistics industry.

Freight Transport Requires Improved Data Transmission

If we look solely at the freight supply chain, we can get an idea of the volume of goods transported and potential roadblocks.

The Bureau of Transportation Statistics indicates that the average length of Class 1 rail has increased from 461 miles/trip in 1960 1,006 miles/trip in 2016. The increase in length has come about with minimal corresponding infrastructural improvements. Combine that with the number and length of stops a freight must make along this journey, and you get an idea of where technology can help reduce operation costs and length of trips.

Here are three major ways in which SaaS is improving freight supply chain efficiency:

1. Multiple Platforms Are Integrated. Cloud technology has rid the industry of pre-existing hold ups in communication across the network. Before cloud technology, freights were held up because communication was so slow from one checkpoint to the next. With integrated systems like Flash Global, freight companies are saving thousands of hours a year in travel time, and thousands of dollars in operation costs because all the data the drivers need is easily accessible at all times.

2. Political Boundaries Are Removed. If proper rules of packaging and transport are followed, SaaS products are making it easier for companies to transport goods across national and state lines. How? Retaining all transactional history in a single program makes it easier for border officers to assess and approve of its transfer.

3. Less Administrative Costs. A lot of transportation companies had many administrative personnel to deal with paperwork. With the advent of cloud technology and SaaS usability, this labor cost has been greatly reduced.

Can Companies Innovate Faster?

Much may have been accomplished in the freight industry already – but there is much more to come. According to a PWC report on the logistics and transportation industry, a majority of companies have not made a seamless or thorough integration of SaaS technology into their work flow.

An industry wide survey conducted by PWC found that 50% believe that a lack of digital culture and training is a drawback. In an industry worth approximately USD $4.6 trillion this is both a surprise and an excellent opportunity for innovation.

Bringing It All Together

SaaS has already brought major gains to some quarters of the freight industry. As the PWC report indicates, logistics and transportation companies are well aware of the need to integrate digital technology into their operations. Given all these factors at play, it's expected the SaaS market for transportation services will grow exponentially over the coming years.

About the author:

Jim Barnish is Co-Founder and General Partner of Morgan Hill Partners, an innovative management consulting partner that helps startup to scale-up technology and tech-enabled clients innovate and grow through Strategy & Planning, Executive Leadership, Product Excellence and Revenue Creation – delivering the right executive expertise and strategic playbook, at the right time, for the right outcomes. Jim's 15+ years of experience as a strategic change leader in global and integrated operations, sales, and marketing uniquely qualifies him to lead Morgan Hill Partners associate operations and affiliate partnerships. Over the course of Jim's career, he has successfully worked with companies undergoing accelerated business development, process improvement, change management and operational transformation initiatives. @jimbarnish
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