Ground Transportation is Still Worth Investing in According to DHL Research

A delivery man waits outside his van.

Ground transportation is the backbone of American shipping even in the era of robotics and automation. From delivery drones, bicycle couriers and next-day air, nearly every package we ship still travels on a truck—whether it’s coast to coast, across the country or just from the fulfillment center to the customer’s doorstep.

In a new report, “The Logistics Transport Evolution: The Road Ahead,” DHL has published the results of a survey of 200 supply chain and operations professionals.

Their research shows that transportation logistics and other industry fundamentals remain essential to shipping companies for successful package delivery. That is, a large majority of carriers still see a clear, direct correlation between the quality of their ground transportation and the performance of their business.

Investing in Ground Transportation Will Directly Help Sales

Three in four of the professionals DHL surveyed believed that making greater investments in ground transportation would directly help their companies make more sales. “Investments” is broadly defined in the survey, including both time and money.

Some of the discussion around innovation in logistics touches on ground transportation. For example, long-haul trucks are likely to be the first sector disrupted by autonomous vehicles. Often, supply chain professionals can get caught up in thinking about the blockchain, warehouse AI and delivery drones.

These technologies will have a significant impact on the shipping industry when they arrive en masse. But, improving ground transportation can have an impact right now.

As customers expect more same-day and next-day delivery, ground transportation is an essential piece of the puzzle. The more shippers can trust their carriers to meet same-day, next-day and specialized delivery needs, the more they can offer their customers and the more customers they can sell to.

“Customer expectations for almost instantaneous delivery [as a result of] e-commerce are helping to position ground transportation as an important service differentiator,” said Jim Monkmeyer, president of transportation, DHL Supply Chain, in a statement announcing the survey results.

Urbanization is Disrupting Traditional Transport and Logistics Models

Last-mile delivery is a constant challenge for the shipping industry. A generation ago, the challenge was suburbanization. Reaching people in far-flung homes was a job many carriers simply passed along to the U.S. Postal Service.

Today, it’s the opposite: urbanization. People are moving back to denser cities with narrower streets that are harder for delivery trucks to navigate.

Furthermore, in the days of three-to-five day delivery, trucks could pass through a neighborhood once per day and still deliver each package on time. Today, delivery networks must get much denser. To fulfill demand for same-day and next-day delivery, trucks may have to travel the same routes many times per day. That’s inefficient, and carriers know that full well.

DHL’s Monkmeyer said these challenges around transportation used to be relegated to supply chain executives. They’re “happening now at the C-suite table.” Transportation solutions are now shaping high-level business decisions.

Report Shows Importance of Technological Solutions in Logistics Industry

Our three key takeaways from the DHL report are:

1. Big Data is Important to Shippers.

More than two in three of the professionals surveyed said that big data, analytics and AI are essential services that carriers must offer to their customers (retailers and manufacturers). Self-driving autonomous trucks, AI-enhanced warehouses and algorithms that maximize efficiency help packages move more smoothly. This is what shippers are constantly seeking.

Plus, big data empowers shippers to review how their packages move and see if they could improve their own processes.

2. Businesses Are Looking For Value-Added Services.

We have plenty of trends that show how consumers gravitate toward shipping experiences that offer extra value: seeking personalization, posting on social media about an unboxing experience or spending a certain amount of money to secure free shipping. Shippers are looking for value-added services, too.

According to the DHL survey, 83 percent of businesses would be willing to pay more for value-added services as long as they see a fair return on that investment. Shippers know that a quality shipping service can protect them from the customer service headaches of late or damaged packages. If a carrier can also add those bonus touches, they may be able to win more clients.

3. Ground Transportation Will Support Growth

As e-commerce grows in volume, last-mile delivery is becoming harder for both shippers and carriers to navigate. That means it’s crucial that businesses strategize on this point: how exactly are my sales going to get to my customers on time?

Of DHL’s 200 respondents, 71 percent said they consider ground transportation a strategic component of their business. They can’t market to new customers, offer new product lines or promote seasonal deals unless they know they can fulfill their promise to get products to customers quickly and accurately.

Do you discuss ground transportation logistics in your C-suite? If not, are you ready to start? Reveel’s expert consultants—former supply chain executives themselves—can help you figure out what data you need to collect, and how to harness it to make the best decision for your bottom line and reduce your shipping costs.

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