<h3>The Importance of Transport in Logistics</h3>
<p>I have received questions about why I do not write more about transportation. It certainly is a critical part of successful logistics. Therefore, here are some of my thoughts about transports.</p>
<h3>Growing Importance of Transport Efficiency</h3>
<p>Like warehousing, transport efficiency is growing in importance. The main reasons are the e-commerce flow with lots of packages but low fill rates in transports and bigger focus from government agencies because of climate change. All in all, road transport encompasses around 20% of the total carbon dioxide emissions in Europe, with heavy-duty vehicles accounting for a quarter of these emissions (EU Climate Action).</p>
<h3>Potential for Reducing Emissions</h3>
<p>Both government agencies and the scientific community agree that a large portion of heavy vehicles could be removed from the road network with more efficient planning that increases fill rates (Piecyk &; McKinnon 2010).</p>
<h3>Geographical and Political Factors</h3>
<p>It is almost impossible to write about the transport business in general and global terms. Every market has its own unique conditions, mostly because of geographical and political reasons. In Sweden, where I live, 80 percent of transport routes are shorter than 200 km. A significant part of the transports is roadwork and construction material (Swedish Association of Road Transport Companies 2013).</p>
<h3>Fragmentation in the Freight Transport Sector</h3>
<p>The efficiency of a transport system is dependent on how resources are utilized. In Sweden, the freight transport sector is fragmented, composed mostly of small operators affiliated with intermediary companies that handle sales and contact with customers. Most innovations in the transport business have been of a technical nature, like better engines and fuel types, for example. We have not seen organizational developments leading to changed behavior in business. One important reason for that is the transport buyer’s ambitions in a procurement of transports.</p>
<h3>The Role of Transport in E-commerce and Omni-channel</h3>
<p>For companies that work with e-commerce and omni-channel, transports are a very “heavy” financial budget post. Transports are one of the most important competitive tools for e-commerce and e-grocery companies, both regarding costs and service to customers.</p>
<h3>Importance of Effective Procurement</h3>
<p>To get transports with the right service at a competitive price, the most important factor is by far the actual procurement. It is critical you have a tender that contains the absolute right data and that you are completely transparent to your presumptive suppliers of transports. The most common challenge in transport procurements is the lack of information. If you want the best prices and the best service for your customers, an unconditional requirement is digital information in all stages of the supply chain.</p>
<h3>Building Trust with Transport Companies</h3>
<p>You, as a buyer, need to work very closely with the transport companies. Build trust and exchange information in the very early stages of the supply chain. You need to get the statistics right. Don’t use “estimates” if it is not absolutely necessary. Facts are a must; otherwise, you will have prices that make room for all the uncertainty in your information.</p>
<h3>Collaboration and Digitalization</h3>
<p>The most successful companies collaborate very closely with transport companies, conduct situation analyses, and use advanced route optimization programs to simulate and plan the most cost-efficient and environmentally friendly routes with the best service. It is very important that you, as a customer, are at the forefront of digitalization and have systems that collect data and can exchange data with transport companies in real time. In that way, you can make trustworthy tenders and procurements in transports.</p>
<h3>Future Collaborations and Business Models</h3>
<p>I am sure we will see more complex collaborations between transport companies in the near future. The freight transport sector is so complex, with countless senders and receivers using a large variety of vehicles with different ownerships. The freight transport sector lacks a unified business model for transport services with general applicability where the business model affects the transport system in general. I believe we will see disruptive business models connecting different transport networks and companies to increase fill rates and decrease the number of heavy vehicles. In that way, we will achieve higher cost-efficiency and positive environmental effects. The challenge is the lack of digitalization right now regarding both transport buyers and transport companies.</p>
<h3>Driving Development Through Digitalization</h3>
<p>The increasingly acute climate situation is driving development towards increased digitalization. Governments and authorities stimulate innovation with various incentives regarding increased volume utilization and electrification of the vehicle park.</p>
<p><strong>Roberth Karlsson</strong></p>
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Importance of increased digitalization and transparency in transport sector
