Freight decisions head to the 'C-suite table'

Dive Brief:

In a survey of more than 200 transportation decision makers conducted by DHL Supply Chain, the majority of respondents view transportation as a strategic component of business growth and a business differentiator, rather than a commodity.
"Transportation conversations are happening now at the C-suite table," Jim Monkmeyer, president of transportation at DHL Supply Chain, said in a news release.
The majority of shippers surveyed (83%) said they're willing to invest more in transportation for better services, but there's a caveat — the investment must generate a measurable ROI.

Dive Insight:

"For decades, transportation has been that 5% of costs that the C-level really didn’t understand," Monkmeyer told Supply Chain Dive in an email. But a booming e-commerce industry and increasing last mile challenges in dense urban areas are driving businesses to look at transportation as more than just moving goods from point A to B.

"With costs of distribution suddenly up in double digits, it has forced executives to dive in and understand why budgets are obliterated, profitability has dropped and service to key customers has been a major risk," Monkmeyer said. "This has driven a new look at transportation and an understanding of how it can be used to competitive advantage."

E-commerce is expected to have an even greater impact on transportation strategy decisions in the future. Today, 29% of respondents said e-commerce is the trend with the greatest impact on their strategies, and 65% said e-commerce will have a significant impact on future transportation strategies.

In making decisions related to freight, shippers surveyed by DHL Supply Chain believe artificial intelligence (AI) and big data will act as support tools. Implementation thus far, however, is lagging. Fewer than a quarter (23%) surveyed said they've fully incorporated AI and big data into their businesses.

"The challenge with these new technologies is that they are not just plug-and-play tools," Monkmeyer said. Unlike software, big data and AI require integration into existing business processes and data scientists with deep knowledge to develop value. "A lot of people still don’t really know what these tools are and the value they can bring."