23 July 2018

Technology and Logistics: The Odd Couple

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When I started my career in logistics in 2001, the most impressive piece of technology in our business were the vending machines in the lunchroom. If a customer wanted to know where their delivery was, we would call the driver’s mobile, and then ring the customer back on theirs. If they needed a proof of delivery, we’d fax it through. Two years down the track, we were getting pretty excited about the ability to book jobs online. Warehousing wasn’t much different - our clients were typically wanting to store slow-moving goods, or bricks and mortar retail stores holding replenishment stock.

In 2005 when I started importing and distributing footwear, I leased a warehouse in Sydney and stacked it with thousands of pairs of shoes, receipting each pair manually, we had no automation or warehouse management system to speak of. When I landed my first deal with David Jones and they asked if we were ‘EDI compliant’ I answered yes, and quickly googled what the heck EDI meant.

The incredible growth of eCommerce in Australia is showing no signs of slowing down, and it’s dragging a variety of Aussie industries and businesses with it. Even old-school ‘bricks and mortar’ icons like Gerry Harvey, who in 2008 famously labelled online business as a ‘con’, and claimed online businesses do not make any money. I lost count of the number of retailers who told me their customers preferred the ‘experience’ of shopping in store, some of whom have struggled in recent years. In 2018 Harvey Norman claims to be Amazon’s most ‘formidable opposition’, demonstrating the need to embrace Australia’s new found love of online shopping. Love it or loathe it, technology is advancing, and for many freight providers, DC’s, 3PL’s or retail businesses, it’s a case of evolve or die.

I think it’s fair to say that the growth of eCommerce in Australia has brought about a somewhat symbiotic relationship between freight and technology.  As eCommerce grows, naturally freight volumes continue to grow in-line, and as freight grows, technology companies have latched onto that growth. Those that have hung on for the ride, find themselves in an accelerated position, like the strangler fig in the daintree rainforest, which attaches itself to a bigger tree in the hope of reaching the canopy, often becoming bigger than the tree it harnessed.

In 2018 the fascinating rise of tech companies winning freight business continues. Companies with no vehicles of their own are doing some serious volume on the back of crowdsourcing great rates for everyone from mum and dad eBay sellers to multinational retailers, and giving the small guys economy of scale benefits usually reserved for the heavy hitters. In addition they have the the technical nouse to deliver a generally superior user experience in areas like tracking and returns. Tech in fulfillment is becoming so lucrative, that some players like Aftership are focusing almost solely on the tracking piece, whereas others like Shippit will provide the all-in package.

Warehouses and DC’s face a different challenge all together. Mid 2000’s plenty of 3PL’s were still relying on accessing the back-end of their client’s website to pick orders, or if you were really tech-savvy, an FTP server was used to exchange data. These days it’s all about API’s, and instant communication between merchant, warehouse, courier and customer. Warehouse automation has moved past conveyors, to robots picking orders overnight, to machines that make branded boxes to size.

Technology and logistics are well and truly intertwined, and tech companies have levelled the playing field for smaller businesses, creating a free market. The challenge for freight and logistics companies is to become more agile and innovative, to continue to invest in technology, and to learn from the guys who are changing the way freight and logistics looks in Australia. Presently at Showpo, we continue to deal directly with a variety of carriers, while least-cost routing the trade-lanes ourselves. We believe this helps us to offer a premium service, free to our customers, without too many middle-men clipping the ticket along the way. That’s not to say that might change in the future, as the evolution in this space has been rapid and impressive - Watch this space.

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Written by: Paul Waddy

Paul is the Operations Manager of Showpo, one of Australia's most successful ecommerce businesses. Paul founded an omni-channel men's footwear business in 2007, and has been importing and distributing products around the world for more than 10 years, including exporting to some of the world’s leading retailers including Asos, Zalora, Zalando and many more. Paul’s role at Showpo includes overseeing the supply chain, including two warehouses in Sydney and LA, Payment Gateways, and the Customer Happiness Department.

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