“With the blurring of industrial lines, is Amazon a logistics company?”

Barcelona, January 9, 2018.-The World Congress of the IRU is one of the essential appointments for companies and transport professionals. In the last edition, very interesting tables were held on the new markets in European Transport, the new immediate challenges and all the variables affecting land transport of goods. In the next lines we may know if Amazon is already a Logistic Operator. The IRU has made public the following conclusions of a panel on new business models in European transport.

The industry is ripe with new practices that can generate additional revenue streams as well as solutions that can optimise resources. This roundtable session debated how transport operators can make the most of the change that is happening and integrate new revenue streams into their value chain. 

Panelists included: independent expert and panel moderator Mark Millar, Fox Chu from McKinsey, Igor Jakomin from CargoX, Jacob Bangsgaard from ERTICO, Abdulmalik Al Balushi from Oman Post Company, and Ahmed Nasr from HERE Technologies.

New entrants into the transport sector are taking advantage of digitalisation and new technologies to make the industry more efficient and more profitable, as well as carving out their own market. These new companies tend to more innovative and flexible. The challenge going forward is how can scale and high capacity become agile? This debate aimed to answer this question.

“The traditional industry has a lot to learn from the newcomers”, explained Jacob Bangsgaard. “What we are seeing is how larger companies are interested in tapping into or even buying these start-ups with all their knowledge about innovation, artificial intelligence and blockchain. They want to use these companies to become more agile.”

Fox Chu debated the added value of these new business models and technologies. Will it be greater efficiency of a single company or the entire transport ecosystem? If the answer is the latter, it means the big companies need to be on board with the change. He pointed out that the reality is that many people make money out of the inefficiency, the lack of sharing of information.

Data privacy is not something we can ignore

Ahmed Nasr addressed the reality of the risk of sharing data. How do we address who is the custodian of the industry’s data and who is the policeman? Or do we have to accept that hackers will be one step ahead? “Data privacy is not something we can ignore,” explained Nasr. “It is up to each company in consultation with its clients to determine how much data to share or merge with other companies. The point of the sharing is to develop new ways of doing business.”

What is the barrier to innovation? According to Igor Jakomin, it is getting big companies to buy in to the new systems. In the maritime world, he explained how large shipping companies are collaborating with tech companies to introduce blockchain and other innovations in the industry. “The use of blockchain in maritime went from 3% to a recently announced rise to 30%. The benefits of this joint effort are considerable.”

The voice of the customer drives everything

Abdulmalik Al Balushi offered this takeaway from the debate. “The lines between industries are blurring. You could have technology companies entering the transport industry or vice versa. As a result of this blurring it is important to understand which industry you are in to better prepare for competition. Once you understand which industry you are working in, you need to understand who your customer is. The voice of the customer drives everything.” 

Mark Millar ended with a provocative question, “With the blurring of industrial lines, is Amazon a logistics company?”

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