The term freight refers to the cargo on a shipment being delivered or transferred from one place to another. Freight transport is the physical process of shipping assets, materials and merchandise goods. The shipping of freight in standardized container or vehicle is involved in Freight transport (Li, Negenborn and De Schutter 2015). There are various transportation modes such as truck, rail, ship, etc. to do the shipment of cargo. The intermodal freight transport consist of proper planning of route to carry out the service of shipping directly from the manufacturer to the customer (Russo and Comi 2016). The method minimizes the cargo handling and therefore it improves the security by reducing the loss and damage enabling the faster transportation.
Disintermediation refers to the process of eliminating the intermediation services involved in economics from a supply network (Hoover and Lee 2015). New technology or start-ups can amplify the business of shipping industry by providing the goal of modifying the freight industry. The technological enhancement can improve the operations that are carried out in freight transport. The shippers can now improve their efficiencies through Digital fright rate framework. Providing PC and modem so that the shipping administrator can simply enter the data and proceed towards other process of transportation. The modern technology is capable of providing tools to the employees having little knowledge of transportation by providing guidance to work on complex models of prices.
This report is aimed at describing the methods of applying the technology and big data to eliminate the services of intermediation in logistics. There are different barriers in process of disintermediation which can affect the entire logistics but with the help of enablers the barriers can be prevented (Agarwal and Baron 2018). The processes that are included in intermediation are: Supplier, Manufacture, Wholesaler, Retailer, Distributor and Buyer. The emerging technology has enabled re-imagination of the market channels by developing the distribution system.
Innovation in technology is getting involved in every process of transport and environment of logistics, which comprises of methods of shipping, management of cargo and administrative activities including payments (Gromovs and Lammi 2017). Since there is an advancement in technology to apply an accelerating modification in logistics and transportation, the Freight companies can mould their processes to serve in a better way by preventing the barriers and by competing with other similar companies (Kleinman 2019). There various factors in logistics which can be enhanced to develop the industry of transport management. The factors are:
Big data is considered to be a cost-effective substance as it has served the world with enhanced performance and better decision making process. Big data is capable of providing data accuracy, better supplier network and visibility; therefore, adoption of Big-data in Logistics can prevent the barriers to invade (Alias 2016). Moreover, adoption of transforming technology and Big-data can enable the disintermediation in Logistics of Freight transport (Schliwa et al. 2014). The manufacturers who are aiming develop their supply network based on shipment, transactional data and order delivery are using Big-data and Cloud computing to enhance their existing systems (Schmidt). Although not many Companies have adopted the Big-data to improve the Logistics in Freight transport business but Big-data has proved to be the accelerator of performance. Big data analytics has the ability to provide anticipation of growth and methods of evolution (Elizaveta 2016). According to the complexity of logistics Big-data can provide guidance accordingly to improve the efficiency. Many industries has been able to improve their warehouses by applying automated facilities. Since, a warehouse consists of various goods or products in huge quantity, searching for a consignment is necessary. Therefore, the automated technology has made this process easier by using tracking sensors.
The ability to own something directly without the third party involvement and it is also a process which does not rely on banks, retailers and so on is known as disintermediation (Linton 2018). The barriers that can interrupt in enabling disintermediation in logistics can be as follows:
Low level scaling:
Scaling in terms of costs is an important factor of value hence, low level scaling can affect the balanced economy by increasing the average costs which is not appropriate for economy. “Economies of scale” can affect the average costs and the freight rates by lowering them. The ‘economies of scale’ consist of three elements: scale of operation, technological role, planning of business, which can improve the scaling.
Ownership issues:
When a customer is not assured about the payment i.e. whether the payment has been done correctly and trust issues can generate. Therefore, technology can help in assuring the customers about the ownership and confirming the customers that payment transactions are carrying out accurately without the involvement of third parties. Crypto-currency technology can prevent the ownership issues by smooth functioning of transactions.
Design issues:
Improper designs of supply chain management can affect the business of freight companies (de Knegt 2018). Logistics structures requires organized structures or operations to maintain the logistics processes effectively. Providing proper service to customers by delivering the orders on time therefore maintaining the function in right structure is necessary.
Corporate culture:
The management of logistics is dependent on the culture of Company to provide best services to the customers. If the corporate culture or the relevant processes are not followed then the management can get affected.
This is how the Big-data and technology are assisting to transform the environment of logistics which are increasing the efficiencies by optimizing the deliveries, protecting goods, providing visibility, providing automated environment, transparency towards the consumers, supply chain and companies themselves.
The logistics providers are responsible for managing a vast flow of goods and simultaneously create extensive data set because of the technological benefits and the methodological advancements of the Internet of Things and Big Data. Tracking of data for exploiting value is required to keep track of all the shipments. When Big Data is adopted by the freight transport industry, then its dimensions help in developing new business models.
The value dimensions that are offered by Big Data are as follows:
Operational efficiency: With the help of this dimension, better decisions regarding the consumption of resource are carried out (Opresnik and Taisch 2015). Because of the automated processing of data, the quality and performance can be improved.
Customer experience: This dimension focuses on customer loyalty by providing an accurate performance of customer segmentation and also concentrates in providing better service to customers. Including the huge resources of data, Big Data can thrust Customer Relationship Management.
Modified business models: Big data can provide entirely modified revenue streams from the available products present in the logistics and can also provide new revenue streams from the new products.
Physical internet is the merging of networks of digital transportation that helps in replacing the analogue road networks. In other words, the application of the principles based on Internet in Logistics. Physical Internet can serve dynamic frame to logistics by providing emerging technology (Sternberg and Andersson 2016). The interconnected and open network which uses smart interfaces and collaborative protocols for sending and receiving the physical goods, which is contained in the standard modules. There are many number containers that are being shipped and the packaging is done with filled air. Physical Internet has the capability of serving large-scale optimization, providing standard hardware and software, efficient system and acquiring the resources. The fundamental building block of the system involves flowing of information through the Internet pipes is equivalent in nature which makes the system a standard container with smart interface. The development in the processes of the system is still on progress. The process in physical internet involves manipulation of standard containers which are exceptionally designed for the Physical Internet and enclosing the physical goods within the containers.
The freight transport is all about handling of goods or products, transportation and delivery. The feature of the system based on software, includes transportation and handling. Accurate information is an essential part of the shipment and emerging technology has provided automated system in transporting and handling. The purpose of the Physical internet is to create an open logistics networks by making the system economically efficient and sustainable. In this world of digitization, Physical Internet assists in predicting the global logistics network which can be controlled for real-time applications. The freight Industry is constantly attempting to enhance the efficiency of the network of logistics so that the goods can be distributed worldwide (Hübl et al. 2016). As mentioned earlier, there are various challenges that can interrupt such as, too many vehicles for transporting, delays in operation, etc. which can result in degradation of the consumer market. The physical internet can overcome these challenges by providing proper frame to the data networks of logistics.
Earlier, the communication network across the Freight companies used to claim high cost and was relatively slow and was affected due to the limited capacity. The entry of the digitalization eliminate these kind issues by providing a standard route of communication and transference of data. The Physical Internet came into existence in the year 2011 which was proposed by Benoit Montreuil and now it is responsible for handling the materials and transportation of Coca-Cola Company (Rojko 2017). According to research, the Physical Internet can provide horizontal collaboration and dynamic structure to the existing business models. To acquire the horizontal collaboration in freight transport, there is requirement of logistics organization for cooperation and sustainability.
The mechanism of physical internet is similar to digital internet. The digital Internet transmits the information embedded in packets and the packet header consist of information which is required for identification. The Physical Internet transfers the physical goods or objects by encapsulating in physical container. The standard containers provided by the Physical Internet are also termed as “IT-containers” which are eco-friendly and have smart interfaces. The “IT-containers” are standardized and modularized based on functions and dimensions (Yao 2017). These are designed to make the transportation, handling of goods and storage easier by providing protection to the goods.
The physical internet is the key solution to all the challenges of logistics as it focuses on designing, innovation, application of emerging technology and determination of involved methods to prevent the exploitation of the Freight transport industry (Goli?ska and Kawa 2015). The designing component of Physical Internet focuses on building of the ‘IT-containers’ with standard modules to facilitate the material handling system (Irani et al. 2017). The container types are also focused while designing to offer best service with efficiency. The second component, methodologies consist of planning, operations, designing enhanced business models to make better decision in Logistics networks.
Conclusion
In conclusion, the technology and big data are the enablers of disintermediation in Logistics. Although there is existence of multiple barriers in transportation and logistics, the technology has the capability to overcome all the challenges as well removing the barriers. Big-data is technology that enhances the Transportation system by providing automated technology. The automation in warehouses has made the processes of shipment mush easier and faster. By eliminating the disintermediation, a strong relationship between the manufacturers and the customers can be built because there is no involvement of third party during the transportation and transactions. Physical Internet is considered to be the key solution to develop the open freight market for future. The researchers are still working on development of Physical Internet to design enhanced business models so that it can be implemented in Transport industry.
With the interrelationship of logistics services, the inefficiency and the factors encouraging the unsustainability can be removed from the current logistics Companies and help in enhancing the Freight Transportation. Physical Internet enabling the Freight Transport system and logistics to reimagine the existing business models by adopting innovative technologies, implementing Big-data, Internet of Things and other smart technologies to the address the existing issues to offer better service in future. According to the success factors it can be concluded that Big-data and technology are ready to be used as the enablers of disintermediation. Earlier, the investment in technology can lead to shattering of the business but now because of the presence of advanced processing of data exponential increase in computing power can be achieved at a fraction of cost. Adoption of technologies can make the Freight industry sustain in future also.
References
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