Companies like Uber and Airbnb are disrupting entire industries and changing the way we consume. It’s time to rethink logistics with access over ownership.
Have you ever hailed an Uber rather than a taxi, booked an Airbnb rather than a hotel, or bought on eBay rather than at your local store? Then you’ve already participated in the sharing economy, which has also been called on-demand, peer-to-peer, collaborative – and more! – depending on who you talk to. Call it what you will, but the sharing economy is here to stay and poised to grow significantly in the coming years.
PricewaterhouseCoopers has identified five key sharing sectors with high growth potential – travel, car-sharing, finance, staffing and music/video streaming – and estimates that these sectors alone will increase the sharing economy from the US$15 billion industry it was in 2014 to a US$335 billion in 2025.
Sharing is not new to logistics
But what about the sharing economy in the logistics industry? The notion of sharing is actually not new to logistics. In fact, DHL leveraged the idea in its early days, offering free plane tickets to private travelers in exchange for giving up their baggage allowance to transport critical shipping documents. By delivering the original bill of lading by plane before the containers arrived by ship, DHL’s innovative service sped up the customs clearance process and paved the way for the express delivery industry.
Even today, freight forwarders do not ship goods themselves. Instead, they facilitate the movement of goods by navigating the complex web of logistics networks for their customers. However, the freight forwarding business is still rooted much more in a traditional rather than a sharing model, even though it is asset light.
Technology and trends are driving the change
As we’ve seen in the hospitality, transportation, retail and entertainment industries, technology and social trends will likely provide new opportunities for the sharing economy in logistics. The mobile web and shifting values are changing the way we consume. Smartphones are ubiquitous and mobile technology is faster and more powerful than ever before. Convenience and instant gratification are in high demand and environmental awareness is at unprecedented levels. And as Millennials come of age, the world’s first digital natives will increase demand and accelerate these trends. Sharing rather than owning will become the new normal.
The tremendous power of digital sharing platforms and crowd-based access to existing assets is rewriting the rules of business. New companies and business models are proliferating at a dizzying pace. The hospitality and transportation industries have been turned on their heads, with staffing, heavy industry, and – yes – logistics not far behind.
Sharing economy in logistics
We’re already seeing change creep slowly into the logistics industry. A number of current and potential use cases for sharing in logistics provide interesting insight into a future where access takes priority over ownership.
A truly shared warehouse, for example, reduces unused space, increases productivity, and cuts costs. Multi-customer warehouses are already commonplace, where third party logistics providers achieve greater economies of scale by consolidating demand, fulfillment, and logistics expertise at a single location. But space allocation is often inflexible and inefficient, as customers purchase a set amount that is not always fully utilized. Digital sharing platforms and next-generation inventory management tools can now provide unprecedented visibility, allowing warehouse managers to create a more dynamic business that opens a marketplace for excess warehouse space. DHL Supply Chain has pioneered a platform called DHL Spaces to do just that.
The rise of digital freight brokerage platforms is increasing interest in transport capacity sharing and reinventing the road freight industry as we know it – an industry plagued with inefficiency. For example, one in four trucks on the road in the United States and the European Union is empty. And those hauling cargo are on average only loaded to just over 50% capacity. Add the idle time resulting from traffic, loading, paper-based communications and documentation, and more, and you see an industry ripe for technology improvements and sharing. A number of digital freight platforms are now on the market, including DHL’s own saloodo! In Europe, Freightos, Convoy, and Loadsmart in the United States. Following the sharing economy approach, these services leverage mobile technology to offer real-time data and communication between shippers and carriers to match loads with available capacity.
It’s time to rethink
These are just two of the many examples of the sharing economy in logistics outlined in our new Trend Report: The Sharing Economy in Logistics – Rethinking logistics with access over ownership. The report, which aims to help you navigate through this new world, also includes best practices from other industries, such as hospitality, staffing, heavy industry, and transportation.
The landscape is changing rapidly and its imperative to understand the powerful forces driving these new business models and value innovation. We can learn a lot of lessons from those sectors that have already embraced sharing, not to mention the logistics industry innovators who are already applying the economic principles of sharing.
Technology and social trends are opening up a wealth of new opportunities to create and capture new value in future supply chains. The time has come to rethink our industry in the context of the sharing economy – to consider access over ownership.