Leveraging technology in logistics operations to improve service levels and cost savings
“Technology can really help drive cost efficiency in today’s world,” says Tanmay Mathur, SVP of linehaul at XPO
This interview was conducted at Reuters Events: Supply Chain USA (May 17-18, Chicago, 2023).
At this juncture in logistics operations, integrating technology into workflows is synonymous with enhancing efficiency and bolstering profit margins. While the incremental advancements brought about by technology undeniably elevate the bottom line, it's reductive to view technology through a narrow lens.
If properly leveraged, technology can do much more, especially in improving customer service levels, explained Tanmay Mathur, the SVP of linehaul at XPO. “At XPO, we are piloting a technology that helps our dock workers load a trailer in a way that it travels from origin to destination without needing to touch several terminals along the way. This means fewer damages, fewer re-handles, faster shipping, and lower costs, which translates into better pricing for customers,” he said.
Technology can enable companies to create service-level moats in this fiercely competitive landscape, setting them apart from competitors and ensuring customer loyalty in the long run. Mathur pointed to artificial intelligence (AI) as a technology creating major opportunities for industry stakeholders.
“AI has a huge opportunity to improve safety for drivers, especially in situations like tailgating or unexpected incidents, optimizing the route on the ground,” said Mathur. He contended that AI does great with real-time decision-making, analyzing vast data sets quickly to adjust routes, predict delivery times, and even forecast potential disruptions before they occur. “AI can help us during catastrophic weather events. AI can help us optimize and figure out the right way to move freight across those affected areas.”
Such tech capabilities for dynamic adjustment to real-time conditions have meant companies can effectively manage their workforce, ensuring they position the right number of workers at any given time — helping them stay resilient to demand volatility. “Technology can really help drive cost efficiency in today’s world,” said Mathur. “At XPO, we have algorithms and models that optimize a route on a weekly or even hourly basis. I think this can have a big impact on costs for any company.”
That said, technology adoption does come at a price. While it is tempting to cut down overhead expenses, not investing in technology will leave companies lagging in innovation, potentially rendering them obsolete in an ever-evolving marketplace.
“It’s imperative that we find technology that can help us cut costs right now, whether it’s labor management tools or route optimization,” said Mathur. “But it’s also equally important to keep investing in technology for the future, because the market will turn at some point, and tech-forward companies like XPO will grow their market share when that happens.”