As the FreightTech industry continued its rapid evolution, 2023 presented unique challenges and valuable lessons for organizations adopting new technologies.
From the impact of strategic investments to the hurdles faced in technology implementation, experts from all corners of the supply chain discussed with FreightWaves the current FreightTech landscape and shed light on the trends that will shape its future in 2024.
Lessons learned in 2023
2023 seemed to be the year that freight technology overinvestment caught up with the down freight market, experts said. Many companies invested in freight technology when freight demand was booming in the past few years, yet many of those purchases were executed based on full pockets, not well-thought-out goals.
Related: In 2024 FreightTech 25, top companies survive year of struggles
“The last two years were such a boom that folks spent a lot of money on technology without a plan. In 2023 when budgets were tight, they wanted to blame tech vendors for the software they bought, or their tech organizations for the product underperforming or not producing ROI,” said Ryan Schreiber, chief growth officer at technology consultancy Metafora.
Industry technology adviser Tommy Barnes backed Schreiber’s concern about user adoption over the past few years, and about FreightTech’s inability to capture a user’s intentions for the systems and ability to help with change management.
“The adoption of supply chain technologies is as much about change management as the technology itself. Many organizations underestimate this when developing products for the supply chain space,” said Barnes. “There must be an ongoing customer feedback loop. … This leads to a more robust go-to-market process and a delighted customer network that creates an ongoing network of referrals for your business.”
If your solution came with a higher level of change management, failure to hand-hold your customer and grow the solution’s value based on customer needs led to a tough 2023.
However, if your technology offered a phenomenal user experience and focused on that experience throughout 2022, your 2023 likely came with growth.
Related: BCB Transport gains revenue per truck through Optimal Dynamics partnership
“Last year everybody cut back on technology because spending less demonstrated a faster payback. We have eight portfolio companies in supply chain and technology. The ones that performed best could demonstrate instant impact,” said Ben Gordon, managing partner and CEO of Cambridge Capital.
Gordon described the growth of solutions like Greenscreens AI, ReverseLogix and Parcel Perform because of implementation that often took less than a month and turned loss centers of businesses, like returns, into profit centers.
Yet, with the amount of marketing being carried out by FreightTech companies to acquire new customers, Schreiber warned that for those who preach their product to be an easy button to solving a problem, change management must be addressed at the end of the day.
“Like Belle and Prince Adam [or The Beast to those who are not Disney adults], this is a tale as old as time. It is nothing new. The biggest hurdle is adoption. Adoption is about change management,” he explained. “They’ll say, ‘Well these are our employees we can make them do it’ and then say, ‘Well no one is doing it the way we tell them.’ It all comes down to why are you applying software to this problem? What are the reasons your user will push back on adopting this software?”
Ironically, Schreiber pointed to an age-old FreightTech statement to showcase implementation failure: “Think about how ‘this is a relationship business’ mentality affects software adoption negatively.” he said.
Related: Where does FreightTech go from here?
Maybe it is that antiquated thinking that has finally caught up to the FreightTech industry in 2023. For Adam Wingfield, trucking expert and owner of Innovative Logistics Group, this might mean hiring out of the ordinary to transform this industry from a “relationship business” to a technology-driven field.
“Let’s not forget, finding folks who know their way around these fancy new tools isn’t always easy in our business at the operational level as well as adaptation. So, what’s the fix? … Either bringing in some tech-savvy people or training up your current team. Going step by step and having everyone together really back the change makes a world of difference,” he said.
The year of data and automation
Anticipating developments in FreightTech for 2024, logistics providers and shippers are concentrating on enhancing their teams’ strength through technology that solves problems quickly with partners that understand the change management involved.
Most experts FreightWaves spoke to agreed that this will come in the form of two major areas of investment — automation and data analytics.
Notice how we didn’t say AI? That was purposeful.
For experts, 2024 should be the year that your organization is preparing to leverage AI, but meaningful steps in data governance and knowing what you need to automate will eventually lead your company to its AI pathway.
“AI readiness is critical for our industry,” said Schreiber. “AI and ML [machine learning] are all the buzz, but it’s gotta start with readiness. None of these companies are AI-ready. This means creating a comprehensive data strategy and data management strategy.”
Related: 3 questions to consider before investing in AI
“Organizations can prepare for a technology future by having data analytics as the front of end-of-process innovation,” said Barnes. “These data-focused individuals will become the agents of change so companies can harness the value of AI to be applied in many workflows.”
For Barnes, in preparation for technology to impact a business, the company needs to build an inquisitive culture by “surrounding yourself with smart people who will challenge you.”
“This will also allow organizations to understand if they have the proper technology to enable their internal processes or what their technology road map should look like,” he said.
Is it too late for the laggards?
For those who have been focused on building a technology-driven culture, 2024 may enable those early adopters to leapfrog the late majority.
“We adopted the use of AI a few years back in a few different areas of the business as we saw the opportunity to get more efficient and to do more with less,” Wingfield told FreightWaves. “As a tech-based education provider, we continue to explore new ways of upskilling our teams as well as developing better solutions for our clients to be able to have more detail with less bandwidth.”
Felipe Capella, co-founder and CEO of freight management solution Loadsmart, believes the early work his company has done with its data management and automation strategies has enabled the company to provide AI options, like its latest tool Co-pilot AI, which was released in June.
“I believe AI still has huge potential for the benefit of shippers and carriers. While brokers, 3PLs and other service providers talk about AI in the context of internal operational efficiency, very few companies currently offer shipper-facing AI solutions. We’ll continue to lead the industry in that direction, launching another robust AI solution tailored for shippers very soon.”
Experts say this is the year the laggards need to put in the work.
“Now is the time to continue to invest in the supply chain technology space. But do so with precision and focus. The supply chain is so primed for continued investments, but new technologies need to always enable more productive workflows and have a clearly defined vision and mission around them,” said Barnes.
“Two years from now, we’ll look at 2024 as the year that a few companies made the choices that set them up to be top 10 brokers and carriers,” said Schreiber. “Fortune favors the bold, so the companies that win make smart choices, not chase trends.”
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