Adapt or Die: Logistics Technology Adoption during COVID-19

Does survival hinge on innovation?


For the second time in 20 years, America is clawing its way out of an economic disaster.

While it’s still too early to pop any bottles of champagne and declare that the worst is behind us, there does seem to be economic light at the end of this seemingly endless COVID-19 tunnel. Work hours are on the rise for small businesses across the country, restaurant reservation numbers continue to climb, and investors are getting bolder as the stock market rebounds.

Still, all this seemingly good news is a bitter pill to swallow for the thousands upon thousands of small businesses (and large ones) that have shut down for good. Including many in the logistics and transport industry.

But what determines which businesses live or die? How have businesses who survived changed? And how can those of us in logistics improve our odds in the next economic disaster?


COVID-19 Survival Hinges on Tech

Survival for individual businesses looks very different depending on their size and flexibility. While it hasn’t been easy, there are plenty of small businesses who’ve managed to stay afloat despite the odds. The same can be said about retail giants, some of which have thrived despite adversity. Or even because of it. Here are the trends we’ve noticed in those who’ve made it this far.


For small business, local trucking companies, and small freight brokerages

For small businesses, the name of the game is efficiency and quick pivots. We’ve seen it in the consumer sector over and over as trendy bars rush to offer take home cocktail kits and celebrities flock to Cameo. But for those of us in logistics, “quick pivots” look very different than simply hosting virtual happy hours. Trucking companies who feel the squeeze can’t easily turn their dry vans into ice cream trucks, and logistics coordinators can’t magic more freight into the market.

However, while volumes cratered in some sectors – primarily manufacturing – they also spiked in others. The businesses who were able to survive were those who were already servicing “the right kind” or freight or could quickly move into a different vertical and make up the difference.

And one common thread of businesses who could quickly respond to the market shifts? Technology.


Small businesses and technology

Technology has helped businesses thrive through COVID-19 and may well be a deciding factor for those who’ve kept their doors open through the pandemic. It makes intuitive sense. Technology is fast. It’s efficient. If a business was already built to operate as quickly as possible, it’s easy to make and adapt to quick decisions. Even dramatic ones.

Owner operators who use virtual load boards are better equipped to quickly snatch up volume. Midsized carriers who’ve already virtually registered with digital brokers or freight networks can get loads in real time instead of waiting in line to be onboarded.

Meanwhile, shippers who rely on capacity that is suddenly under crunch need to prevent costly disruptions and delays. A feat that’s far easier if your provider has a digital portal that provides instant pricing and 24/7 access to capacity.


For large corporations, national 3PLs, and major trucking companies

For large entities, a “quick pivot” is much easier said than done. Nothing is fast when you have thousands of employees and potentially hundreds of offices. Even less so if you’re desperately trying to close those offices and move those employees online.

Being scrappy is much harder with the kind of overhead that comes with a big name, so the game is all about being proactive.

COVID-19’s biggest winners (ecommerce, telework providers) were already well positioned for the new normal, while the biggest losers (hotels, restaurants) were firmly at its mercy. For either end of the spectrum there isn’t much to be done, but for those in the middle looking to weather the storm it all comes down to efficiency.

That “overhead” problem we mentioned before equates to a lot of monthly expenses once covered by profits. If a company’s pockets aren’t deep enough to eat the costs, that means cutting those costs. A process that is especially painful if the company had been augmenting innovation and efficiency with additional workers.

But there’s only so much austerity measures can do, which means those companies who were already efficient were in a much better position to avoid layoffs, losses, and stoppages when their workforces were made to go remote.

The key to efficiency? Technology. Again.


Large corporations and technology

Offices that were already remote or partially remote were extremely well positioned for the lockdown, and managed to avoid the cost of vacating offices, providing additional equipment, or spending hours training staff on telework best practices. Businesses that had already switched from phone calls to organized internal communication tools improved their intercompany communications and potentially saved millions of dollars a year.

Those truisms similarly apply to major shippers. Streamlining pricing and booking saves time, and when your workforce is thousands strong, time is money. Not relying on confusing email chains and unrecorded phone calls cuts down on costly communication errors. And working with logistics providers who are already tech-enabled and highly efficient means cost savings get passed right back to shippers. It also ensures that big disasters don’t interrupt the supply chains that are vital to profits.



The New Freight Tech Normal

All this boils down to a lot of businesses either predisposed, or forced to be disposed, to using technology to improve their business. What does that mean for logistics moving forward?

It means an increase in automation and digitalization across multiple facets of the global supply chain. In fact, a post COVID-19 survey of over 300 shipping and freight professionals revealed that a whopping 67.6% of them plan to invest in technology. This could mean a serious overhaul in the industry that will send ripples across the globe. There is a major push in logistics to go digital to be better prepared for big disasters, but also to improve business in the interim.

Experts are already extolling the virtues of automation and warning that those in logistics who don’t invest in technology are “going to go under.”

Even freight tech itself is evolving. Automation and AI have both been cited as key for traditional brokers and digital brokers alike in the coming years.  SaaS solutions may well be key to giving mom and pop logistics shops a competitive edge against industry titans. Visibility in particular continues to be one of the most important aspects of the freight tech revolution. So much so that a Gartner study on the logistics response to COVID-19 revealed that by 2023, 50% of global leading enterprises will have invested in real-time transportation visibility solutions. It makes sense, you can’t respond quickly unless you know you need to respond.

Long story short: logistics technology adoption has gotten a huge boost, which will mean faster supply chain management, and better shipment visibility.



Preparing for the worst

Unfortunately, there is always another disaster on the horizon.

The next hurdle could be natural or economic, and it could spell doom for many more businesses. It’s impossible to be fully prepared for every possible scenario (alien invasion, anyone?) but it is possible to take precautionary measures and learn from the past. COVID-19 is driving unparalleled tech adoption across the board, and it’s largely fueled by a fundamental truth of nature and business.

We must adapt, or our businesses will die.