DHL Supply Chain research highlights connection between ground transport and shipper’s growth

In many business circles, the phrase, “you get what you paid for,” can often speak volumes.  Based on research recently published by global express delivery and logistics services provider DHL, that sentiment carries a lot of weight.

DHL’s report, entitled “The Logistics Transport Evolution: The Road Ahead,” which was published by DHL Supply Chain and leveraged data from research by Lieberman Research Worldwide LLC and commissioned by DHL, revealed myriad findings about how shippers view ground transportation logistics. The research was based on feedback from more than 200 global transportation decision makers across various sectors.

One of the report’s key findings was that 83% of businesses are willing to pay more for better and value-added services if they provide a measureable return on investment. What’s more, it also found that shippers are increasingly looking at ground transportation as more than just a “tactical commodity,” a point driven home by 71% of respondents that view it as a strategic component of their business, coupled with 75% indicating there is a direct correlation between ground transportation and business performance augments sales through the investment of time and resources.

In an interview, Jim Monkmeyer, president of transportation for DHL Supply Chain, said, a key driver for putting out this research has to do with the rapid evolution of technology within the logistics sector.

“For us to get a real good sense, or pulse, of what that means to all six continents and four of the major regions in which we do business, we wanted to know from our own customers, as well as the ones we don’t have yet, what is really important,” he said. “You always heart that everything is the next big thing, but we are trying to find out what is in the minds of shippers and what they are looking for and the most important areas for us to focus on to support them.”

Addressing ground transportation as more than a tactical commodity, Monkmeyer explained that when looking at it through a technology-based lens and seeing it in action through things like digital freight marketplaces, for example, which are starting to see some real traction, it starts to resonate more clearly with shippers.

This is especially notable when considering the heavy impact the ongoing driver shortage and rate hikes have had on the market and shippers for the last several months and has received a lot of attention along with way, too. And it has also led shippers to take a long look at technology to counter some of those effects.

“It forces them to take an even more serious approach, given the capacity issues, as things have changed, and now all shippers are in the same situation as everyone else in that they are fighting for capacity and better rates,” he said. “If they were not looking at technology before or just dabbling in it, they are now taking it very seriously.”

Things like AI (artificial intelligence) and big data, as well as e-commerce trends, are crucial in shippers’ ability to get freight delivered through numerous channels, which is what customers are demanding, in addition to shorter lead times, explained Monkmeyer. Another factor he sited are autonomous and electric vehicles, which will take in increasing relevance sooner than later, he added.

That point was driven home in the research, which found that 65% of shippers surveyed noted that the exponential growth of e-commerce and its implications on service was viewed to have a significant impact on supply chain operations over the next one-to-two years.

With ground transportation playing a large role as a key supply chain and logistics driver, gauging the returns can be complicated. And with 83% of the survey’s respondents indicating they are willing to pay more for a measurable ROI for better service, Monkmeyer said it serves as somewhat of an about face from the past, when it was more about cost reduction.

“The large and global brand name companies, which DHL serves, are the ones saying they need to see more in terms of service and customer experience, especially on the B2C (business-to-consumer) side if they need to change an order or access real-time information or want something delivered quickly and need to know when or where it is being delivered,” he said. “They will pay for that, and they are marketing the brand to demand that.”

On a global basis, 55% of shippers maintain they have the appropriate software tools to integrate ground transportation into their business. But that percentage changes when taking a global approach, especially in North America, with 43% indicating they possess the data toolsets and integration capabilities in their transportation operations, whereas Latin American shippers were far above at 76%.

“This is almost the inverse of what you might expect,” said Monkmeyer. “In the U.S. and Europe, people see those trends and what is available and what is becoming available. They are looking at this glass half empty and shave that vision of what more is there. They more they have that vision, the more they realize what they do not have. A multinational company operating in Latin America may be more satisfied with what they have because they look around and the carriers that are supporting a lot of the business there-if they are not with one of the top 3PLs or are a top shipper demanding certain things from the top carriers-they see what could be, as there are a lot of carriers still that are not equipped with enough technology in some cases.”