July 7, 2020

Digitalization of Logistics

Digital platforms enable lean, sustainable customer experiences
Avatar Rebecca Lambert

Sebastiaan Scholte, a former CEO of Jan de Rijk Logistics, sees a growing role for digitalization to improve the logistics industry’s efficiency and sustainability. Compass spoke with Scholte about the industry’s key challenges and opportunities.

How did you get into logistics, and why does it fascinate you?

Sebastiaan Scholte: I did an internship in Mexico and liked it so much that later on I started working at Aeromexpress, the cargo department of Aeroméxico, Mexicana and Aeroperu. I then went to Cargolux Airlines International, one of the world’s largest cargo airline operators, as a regional manager responsible for sales, operations and finance in Latin America. In 2010, after eight years there, the opportunity came up to work at Jan de Rijk. What I like about this industry is that it’s extremely important to our day-to-day lives.  Without logistics, nothing moves.

SS: Digitalization and automation are key. Of course, there will always be a need for asset-heavy operators – businesses with physical trucks and warehouses. But the future leaders will be the ones with the right digital platforms. For example, if you were able to see all the transport flows worldwide with all their available capacity, you could optimize your operations and have 20% fewer trucks on the road. Why? Many trucks on the road today aren’t full. Without even knowing it, several trucks could be traveling in the same direction, each with, for example, only 70% capacity.

With better visibility, we could give really useful advice. For example, we could go to a customer and say that we’ve analyzed their flows and that, on a Wednesday, if they could hold out for a 6 pm rather than a 3 pm pickup, we could combine cargo and save them money.

I think this is the future. And you can only do that with smart platforms.

Sebastiaan Scholte

What would you say are the biggest challenges that businesses in this industry face right now?

SS: People. In Europe and the US, the population is aging, and the logistics industry isn’t necessarily the most attractive one for young people to join. We’re really struggling from a lack of drivers and warehouse personnel. And maybe that will be resolved partly through automation.

[But] right now we still need a lot of drivers. There are maybe 300,000 to 400,000 driver vacancies across Europe.

They say that every challenge hides an opportunity. Where are the opportunities in this?

SS: The first is automation – making your processes more efficient and doing more with less. Businesses will be forced to embrace more technology solutions to replace the manpower they lack.

You also need to attract people. You need to be a good employer. It’s not just about salary; it’s about working conditions and training. It’s about the culture of a company. People need to feel valued and praised. Employee retention is a big problem. At the same time, of course, we must collectively work on training drivers to do other jobs if autonomous driving becomes a reality.

In your time at Jan de Rijk Logistics, you said “automation and smart systems are how we differentiate ourselves.” How did you use these technologies to achieve differentiation?

SS: A Thursday in November is not the same as a Monday in November. And a Thursday without rain is different to a Thursday with rain. So, if you have all this big data and you combine it and you perform predictive analytics, you can plan ahead better, be more efficient and offer better on-time service to your customers.

At Jan de Rijk we deployed 1,000 trucks a day; to optimize that you need a smart system. It helps achieve operational excellence and improve customer interaction. System-to-system integration, booking systems, on-time performance, digital feedback and smart reporting are all big differentiators and enable the company to be more open and transparent with customers. 

SS: I think logistics and world trade are very correlated. Digitalization is very important, as is the growing use of new technologies. Think autonomous driving, robotics in warehouses, pilotless planes; it’s all going to happen.

But, while there are a lot of trends and hype, let’s not underestimate that, for the time being, we’ll continue to have business-to-business flows. So while we must continue to be agile, we also have to acknowledge that the pace of change isn’t going to be continuously at the same level or higher.

In the span of 20 years, Sebastiaan Scholte advanced from working in a cargo department to logistics CEO at European transport firm Jan de Rijk and led the International Air Cargo and Cool Chain associations. Today, Scholte sits on the advisory boards of two IT logistics solutions providers, CHAMP and Winmore, and is an adviser to e-learning business IMC, helping to grow awareness of the air cargo industry as a career.

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