Undoubtedly it has many traditional logistics pro-
viders quaking in their boots.
Amazon is a unicorn that blends 1PL / 2PL / 3PL /
4PL and 5PL attributes rolled into one.
tomer. They are also on the front lines in dealing with those unfortunate extra
costs known as demurrage and drayage (think of them as “late fees” for rented
ships/containers and trucks). And let’s not forget the safety and labor-related
issues, such as the number of continuous hours worked or hours worked in
total per week.
All the parties in the supply chain benefit from better visibility, increased utili-
zation, better on-time performance and reduced costs. So why hasn’t it hap-
pened? Because, quite frankly, up until recently, it has simply been too expen-
sive to do so.
Today, however, a confluence of several key technological trends have emerged
that dramatically change the cost dynamic:
• The Internet of Things (“IoT”), which in itself includes a series of tech
advances that include low-cost sensors, decreased global data communi-
cation costs and major improvements to battery life.
• Machine Learning (“ML”) and Big Data, that can continuously examine
massively large data sets of seemingly unrelated information and then be
used to make valuable predictions and recommendations.
• The Public Cloud, which has dramatically reduced the cost of computing,
moving it from CapEx to Opex, and providing on-demand access to vir-
tually unlimited computing capacity to run those ML models.
Why does this matter?
Let’s take a look at a couple real-world scenarios on how this actually plays out:
One of the top three shipping lines, an owner of more than 2 million cargo con-
tainers, has pu blicly acknowledged that it annually wastes upwards of $1B (yes,
one billion!) “shipping air” -- or moving empty containers around the world --
because they lack adequate visibility into where their assets are and when they
will return. That company is not alone, as this problem affects virtually every
shipping line that doesn’t track their assets.
Let’s look another case that impacts the entire logistics industry:
Every year in September Apple holds a press event to announce its new version
of the iPhone, which leads to a buying frenzy both directly and via Apple’s retail
distribution partners. Behind the scenes, Apple’s component and contract
manufacturing partners in Asia have been busy assembling products and get-
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