How the COVID Information Problem is the Same as the Logistics Information Problem
Welcome to the 52nd edition of The LogTech Letter, a weekly look at the impact technology is having on the world of global and domestic logistics. Last week, I explored whether companies had a good read on the value of their existing systems. This week, I’m looking at why the pandemic shows how it’s hard to understand a barrage of information without context.
As a reminder, this is the place to turn on Fridays for quick reflection on a dynamic, software category, or specific company that’s on my mind. You’ll also find a collection of links to stories, videos and podcasts from me, my colleagues at the Journal of Commerce, and other analysis I find interesting.
For those that don’t know me, I’m Eric Johnson, senior technology editor at the Journal of Commerce and JOC.com. I can be reached at eric.johnson@ihsmarkit.com or on Twitter at @LogTechEric.
Governmental guidelines about how to effectively deal with the ongoing pandemic are an interesting window into a much bigger information problem. Each country – sometime each locality – has its own views on vaccines, masks, testing, and social distance protocols. Those protocols change frequently. The protocols between two different locations are often not aligned. The promulgation of those protocols – and any changes to them – are communicated in a haphazard way.
That leaves the general public in a quandary: where do I turn for information? Can I trust that the guidance provided today will be the same tomorrow? Can I trust the guidance at all? Most people are left to paste together a mosaic of information, gleaned from official websites (local, national, and global), third-party information, media outlets, and their own personal information networks. That includes social media and actual live discussions with real people (those still apparently exist).
This mini-thread from Nate Silver summarizes one aspect of the problem well.
What the world is discovering is that the COVID-19 information vortex is basically the same as the logistics information vortex. As much attention as global supply chains are getting these days from the general masses, I think this fact is still not remotely understood. The barrage of information with which logistics practitioners deal is a major constraint. Frankly, it’s the reason why automation is seen as a panacea by so many up-and-coming technology providers addressing the global logistics space. The going theory is that this is simply all too much for a human to handle.
I spoke this week with automated supply chain platform Vorto CEO Priyesh Ranjan, and he described it this way: “we’re actually hurting the ecosystem by not having the system handle dynamic transportation decisions.” Of course, Ranjan is far from alone in this thinking. The question is, how to get those logistics practitioners comfortable with changing their mindset about the role of automation in helping them manage information overload.
Like the COVID-19 information situation, logistics information overload has adverse impacts on the individual, the network, and the market. A person who thinks taking a vaccine is dangerous endangers themselves, their immediate physical community, and the broader community that interacts several degrees of separation away from their inner circle. Think of the Delta variant, which emerged in India, created a wake of devastation there, and is now creating havoc in the US and elsewhere. Decisions lead to consequences that occur in ever-widening concentric circles.
Now let’s apply that to a poor piece of logistics information. A supplier books a load with a truckload carrier, but fails to update a system confirming the shipment is ready for pickup. It’s an act of omission, not commission. It’s an oversight. Is it a big deal? Well, the carrier’s dispatch system directs a driver to go the supplier’s facility based on information around the booking. The driver arrives, thinking the load is ready, but then waits for it to actually be ready. That single piece of out-of-date information (not even incorrect, but just obsolete or an error of omission) has ripple effects. The driver’s time is wasted, stripping capacity from the system. The truck takes valuable space on the supplier’s facility yard. The broker with whom the supplier booked the load now has to determine whether it makes sense to suggest redirecting that driver to another load (those are resources spent reactively addressing a situation rather than proactively planning the next load).
Meanwhile, the receiver is also affected. They have likely planned their facility (whether a store, DC or some other yard) assuming the load will arrive at a certain time. They’ve kept a dock door free at that time, ensured labor is available, cleared out space in the warehouse for the goods. When the departure is delayed, contingency plans go into effect. By definition, a contingency is not the optimal desired outcome.
In logistics, the fog of information is the problem, not the fog of disinformation. No one is out to deceive other parties, particularly those involved in commercial relationships with one another. But, in effect, the end result is the same. Too much information is too much information.
Basically, it creates several several knock-on effects. It’s hard to tell what information is real, or up-to-date. It’s hard to do anything directly with the information (think about visibility into exactly where a container is on a vessel anchored outside a port for two weeks). And it’s hard to influence situations outside of your direct network. You could go door-to-door begging your neighbors to get vaccinated and wear masks indoors, but realistically, you’re more likely to influence your friends and family, over whom you have some emotional leverage.
In your logistics network, you’re more likely to impact the parties with whom you have leverage than ones where the relationship is purely transactional. But just as bad, incomplete, or non-existent data can create negative ripples, good data can create positive ripples. A correct and timely piece of information shared between two parties can be further shared down the line. And the more good information that gets shared, the more trust is created throughout the network, even to secondary and tertiary parties.
To link this back to the start, there’s a role, of course, for automation in all of this. Trust in automation is hard won in logistics, as it is many non-business environments. But systems interacting with one another without human presumptions getting in the way could yield more of those good pieces of data that spread positively outward.
Here’s a roundup of pieces on JOC.com the past week from my colleagues and myself (note: there is a paywall):
No shortage of funding into digital forwarders – despite continued incumbent skepticism of the model – this time with Dutch provider Shypple both raising a round and acquiring a perishables-focused forwarder.
The FRONTdoor Collective thinks it can provide shippers an alternative last-mile service provider to Amazon, FedEx and UPS by building a franchisee model to attract delivery service providers that typically are contracted by the bigger players. The compan was founded by a few e-commerce veterans with big-name experience in their back pocket, which makes it worth a watch. My colleague Cathy Morrow Roberson dives into this one.
In other related news, emerging cross-border provider Passport acquired a parcel consolidator to build its ability to serve direct-to-consumer brands needing to fulfill international orders.
Integrations between forwarders and visibility providers have been springing up left and right, which I’ve written about a lot at JOC.com, and now managed forwarding marketplace FreightMango said this week it is using container visibility data provider Vizion. This type of activity is bound to continue.
And here are some recent discussions, reports, and analysis I found interesting:
How will COVID impact global executive decision-making? McKinsey lays out nine scenarios.
Loved this discussion led by Audrey Ross on Excel usage in logistics. Make sure you catch this.
Nice summary (including video links) of the work DCSA is doing on visibility standards.
Great conversation here between Radu Palamariu and two reps from SoftBank Vision Fund about their investment strategy into supply chain and logistics.
Another intriguing post by Jason Miller, this time testing out some theories about driver pay.
If you missed my conversation with Rachel Premack of Business Insider last week on the premiere of my new show, LogTech Live, don’t despair. It’s available here on-demand.
Some upcoming events I’ll be involved in:
I’ll be speaking at the Container xChange Digital Container Summit, held virtually Sept. 15-16, about sorting through the noise of investing into digital logistics solutions. Like last year, it should be a fantastic event.
Disclaimer: This newsletter is in no way affiliated with The Journal of Commerce or IHS Markit, and any opinions are mine only.