How the pandemic exposed tech weakness in the supply chain.

Back in the early 1990s, I worked for a government contractor that made a real effort to go ‘paperless’ within the confines of their company. The plan was excellent, and even then, their technology was sufficient to pull it off. What didn’t materialize was their workforce embracing the paperless system. We all loved our paper and did everything we could to keep our filing cabinets. Looking back, it very much reminds me of the general public of the United States rejecting the metric system. The system was sound, the rest of the world was using it, and the government wanted people to embrace the metric system. Alas, the only shining examples of success are the two-liter bottles of soda on our grocery store shelves today and metric measure tools to work on machinery and vehicles not made in the United States.

Similarly, there has been a good deal of talk about the importance of tech advancements in our supply chain. We all touted it, wrote about it, and we championed the promise of artificial intelligence (AI) and blockchain technology possessed. Phrases like ‘truly transformational’ and ‘gamer changer’ littered articles on the subjects. Much like the metric system, one of the things many didn’t do was execute it. They wanted to, intended to, were going to put it in the queue, but that’s where things stopped. There are still a remarkable number of links in the transportation chain that require original documentation, picking up the phone, and handwritten signatures as a requirement of doing what they do. I have not had a fax machine for years, and there are still those that cannot do their job without them.

One of TJO Cargo’s services is TMS (Transportation Management System) integrated cargo insurance to access cargo insurance at the same time and place used to book shipments. For shippers without yearly ‘cover all’ policies and freight forwarders/3PL’s, the API integration takes away many of the moving parts of obtaining cargo insurance for shipments; it automates the process end to end. Like all good technology, once set up, the system increases speed, reduces labor, and saves money as a byproduct. No brainer, right? You would think. While many people see the theoretical value, it just wasn’t the right time to make a move.

What two things does TJO Cargo’s integrated cargo insurance, blockchain and AI, and a government contractor going paperless have in common? Two of the scariest things for our workforce today, change, and a perceived loss of control. Change and loss of control are potent fears which are right up there with public speaking, bumping into the Ex, and inexplicably finding ourselves on a crowded street corner in our underwear. These are all things we try not to do, so we avoid the uncomfortable emotions that come with them.

Fast forward to Covid-19, the year 2020. My guess is more of us will overcome at least some of our fears. As cited by the *JOC quoting a report from **Shipping and Freight Resource, 42% of logistics professionals expected their companies to make significant changes to their supply chains after experiencing operational pain caused by the pandemic. The reason for the expectation for change is 59.2% that replied to the survey indicated their operations were significantly affected by the pandemic. One of the most popular expected changes cited by respondents (67%) was ramping up of investments in technology.

Another of the long-cited reasons for delaying technology updates has been money. It never seemed to be the right time to shove tech upgrades into the budget. As it turns out, the reason some companies have not invested in upgraded tech is the very same reason they will now invest in technology, money. Logistics professionals surveyed stated they were unprepared for the impacts of the pandemic, with 54% saying they were somewhat prepared, 35% stating they were not well prepared at all, and 7% admitting they were completely unprepared. Considering over 40% saying they were not well, or not at all, prepared, now that is a lot of money lost due to operational inability.

Also, consider the pandemic forced many companies to adjust to having much of their workforce work from home. Larger companies may grow an affection for their team working from home. According to the JOC article, one global forwarder believes they can shrink their bricks and mortar footprint by 30% to 40%. That is a lot of savings on fixed costs. The Covid-19 pandemic has made it clear it is not a matter of whether the technology upgrades are affordable; it is a matter of whether the cost of not making them will be too high.

*1 https://www.joc.com/technology/supply-chain-visibility/covid-19-likely-catalyst-tech-investment-survey_20200421.html?utm_source=Eloqua&utm_medium=email&utm_campaign=CL_JOC%20Daily%20Newswire%204%2F22%2F2020_PC9156_e-production_E-61483_KB_0422_0617
*2 https://shippingandfreightresource.com/#