Delivering the Difficult

The On Demand Economy is starting to bring about big changes in the logistics landscape. The "Uberization of Freight" and the rush to digitizing and automating all facets of the distribution process has seen a multitude of new companies enter our field.

A large amount of investment capital has been put into even the smallest of technology companies, with no logistics experience, in hopes of creating the next big application for Logistics managers to use. We can credit Amazon for this.

All eyes are on Amazon as they have transitioned from an online bookseller, to an online marketplace of everything, to a global logistics company. "The Amazon Affect" has changed the perception of the distribution and logistics world.

In my 30 years in logistics, no matter the organization, warehousing and transportation has always been a back end function. These services have always been regarded as "support" services for sales. Amazon came along and moved logistics front and center. 

Not only can you buy the item you want, but we are going to deliver that item to your door faster than anyone else. The Logistics process for Amazon has become its selling value proposition.

It used to be sales went like this...We have this product, not many other people can offer it to you at this good of price, so buy it from us...Today Amazon says...We know you can buy this product from a number of places online without much difference in price, but our logistics network will get it to you faster than anyone else.

Amazon has now become the number 1 online retailer because they made logistics the cornerstone of their value proposition. They believe so much in this business model that they have literally changed from a Retail company to a Logistics company. They have quickly bought warehouses, trucks, planes and boats in an effort to take more control over their supply chain.

The interesting thing about the influx of capital into Logistics is that it is targeted at the computerization or automation of the process, not at the process itself. Asset based warehousing, trucking and last mile delivery companies have not seen the kind of investments in assets to actually perform the job, that their tech counterparts have received.

In today's business environment most investment goes toward ways to make money without having to actually physically do anything other than code software. 

It is my opinion that if the capital influx into logistics were reversed and the majority of this capital were spent on trucks, material handling equipment and equipment that makes the flow of products from manufacturers to consumers smoother, rather than on software, the world of logistics would be even more paramount in today's e commerce marketplace.

If companies that actually did the work of moving products had the capital it needed to always have the right equipment in the right location at the right time, delivery logistics would be more efficient and cost less to get items into the hands of the consumer.

Gateway O.T Specializes in the blue collar, white glove, first mile, last mile and everything in between space. Using assets and people to actually pickup, move and deliver large and difficult to deliver items such as appliances, spa tubs and the assembly of office cubicles all the way to where the customer wants them, is our value proposition.

We help provide the freight logistics management for all of the pieces of the puzzle, beyond the online TMS, WMS reporting type features, Gateway concentrates more on the custom delivery of your merchandise than on the delivery of the data for your merchandise. 

I am not saying that the technology to streamline logistics is not important, in fact if you have read my blog you would know I was very involved in the large scale development and implementation of an early ERP ported TMS system in the early 90s and I understand its importance in the supply chain.

In truth, I just think the race for big bucks through new apps with not a lot of work or effort in actual physical distribution is a waste of assets that could be progressing our industry into a new era of customer service for everyone purchasing online.

Lately our choices for transportation management tools online have grown exponentially because of this, but what has it really done to benefit pickup, delivery or customer service? More computer networks, more rate shoppers, more communications tools, more document producers, the choices have become endless. 

The problem is many of these programs and networks will fall off and disappear, meaning the financial investment people are making today in these programs really aren't advancing the state of logistics for the benefit of the consumer.  

Hey everyone who is making the next best logistics app, becoming the Uber of Freight, or trying to become the Amazon of All Cargo, how about paying more attention at what is really happening! Amazon didn't just create an app and call it a day, they are creating a huge Asset Based Distribution Network to dominate Logistics! Why aren't you? 

Steven Tittle is Owner of Gateway Optimum Transportation and Gateway Crate and Freight - an asset based 3 PL located in Tempe, Arizona. A Blue Collar-White Glove kind of company who provides its clients with first mile, last mile and everything in between. Contact him at steven@gatewayot.com or visit www.gatewayot.com or www.gatewaycrateandfreight.com