Start-Ups and their impact on the Logistics Industry
Logistics Start-Ups experienced a real boom on an international level at the beginning of the new millennium, analogous to the rapidly accelerating digitalisation of the transport market and other economic sectors. From 2005 to 2015, on average, a new Logistics Start-Up was founded every week. From 2010 onwards, the number of Start-Ups in the area of online platforms and tracking solutions developed exponentially. A lively and diverse Start-Up landscape has developed from which impulses, innovative ideas, new technologies and new business models for all stages of the logistics value chain are emerging. Today, there are estimated 300 Logistics Start-Ups in German-speaking countries.
The boom in Logistics Start-Ups can be divided into two main phases: The first phase initially comprised Start-Ups that primarily addressed the low level of digitalization in the industry and positioned themselves as niche providers of software products, digitalization support and general process transparency. In a second phase, Start-Ups entered the market that were already partly based on these digital foundations and used the advancing digital integration of companies, systems and processes, for example, to take on consolidation and marketplace roles in the transport ecosystem. The Logistic industry is therefore challenged and further developed by young, innovative companies with new business ideas, which are helping to shape the Logistics of tomorrow with new ideas. But being innovative in the Logistics Sector is not always easy. In the personal interviews being conducted, the interviewees were asked what kind of challenges they are aware of being a Start-Up in the Logistics Sector, and due to the old-fashioned sector, there were many.
One of the most named challenges was indeed the problem of obsolete technologies conservative way of thinking regarding digitalisation, digital progress, and innovation management. Ultimately, the combining of modern, new developed processes with the outdated corporate processes is the biggest challenge for new Start-Ups to deal with in the logistics sector. Aaron Spandehra, CBDO and Co-Founder of driveMybox mentions: “The initial response from the transport companies and the drivers to our newly developed platform was skeptical at first. Not necessarily negative, but rather skeptical.” He also ads: “The logistic sector and especially the transportation sector is very conservative and outdated, and therefore quite skeptical, when it comes to new ideas and changes.”
An important part of the structural change of the transportation market in the course of digitalization is the creation and emergence of different digital platforms. In the last years, we have seen a huge rise of the platform economy. The platforms organize an infrastructure for market transactions within a digital network. Moreover, they help to plan more efficiently and deploy capacities more effectively. In addition to access to resources within and outside of one’s own supply area, capacity gaps can be better identified. Examples of this type of platforms is Airbnb for private accommodation or Uber as a platform for transport and mobility. The platform economy makes it possible to better allocate resources, increase market transparency through easier access to relevant information and reduce transaction costs (bringing together supply and demand). Platforms can offer more efficient and better fitting solutions with the help of new technologies and matching of professional and content-related criteria. In the Transportation sector, platforms create transparency and visibility through the provision of data and enabling simple and direct communication. Transparency or visibility for supply chains has been a topic in logistics for decades and its relevance and interpretation is the subject of lively debate. The availability of information on consignments and their status on suppliers and also on customers at any time – in short, the visibility of all relevant processes around one’s own company – is seen as having great potential. Digital platforms certainly make the transportation processes easier. The availability of a large amount of high-quality information and data from a company’s environment is the basis for orientation, planning and forecasting. Especially in the case of the Transportation Industry: once a functioning platform has been developed for the first time, scaling to a large number of additional customers is possible. This can lead to a significant competitive advantage over traditional business models. The proliferation of digital platforms is clearly influencing the way companies analyze, design, implement and manage information systems.
“The progress resulting from digital platforms for the container sector in particular is really enormous.” states Patrick Jandt, CEO and Co-Founder of driveMybox. He also adds that „driveMybox has already been able to achieve a great deal in the aspect of digital progress. Most importantly, transparency could be created by creating visibility, which so far was a huge lack in the industry. “I’m not saying that driveMybox is 100% perfect, but I believe that driveMybox perfectly captures the digitalization idea, because processes are lived differently and it is attempted – when all contingencies are incorporated or developed in the platform – to map everything digitally and the idea can be docked forward as well as backward. We are just the right partner for customers who want to digitize certain processes and also expand and digitize their own systems. This is because platforms can provide this interface, which can be used to create transparency in the logistics chain.”
