Uberization of Logistics Has Arrived

Author: joelynch

For an industry that is forever on the move, the world of logistics is in a perennial state of change, facing numerous challenges and vague demands. Staying ahead in this dynamic landscape can be quite a roller coaster. Adding to this dynamic is the arrival of ‘Uberization’ that is knocking on the doors of logistics, mounting “faster that fast” delivery expectations and reaching a fruition point of determining who would be the survivors. For a logistics player, this is a do-or-die moment. The ones to adapt and move forward will be distinct. Someone who does not adapt will soon be extinct.

WHY SHOULD LSPS BE WORRIED?

Despite the immense opportunities, the logistics sector has recorded, at an average, a lower capital market performance and return on invested capital than many other sectors. The average return to shareholders is approximately 7%, which is lower than the cost of capital. Add to this a CAGR of approximately 3.6% that places the industry in a tight corner. With many M&As failing to deliver expected results and investor expectations not being fully met, the logistics sector’s major challenge lies in attracting major investments and finding ways of increasing Return on Investment.

Add to this the emergence of the ‘Uber’ economy. The concept of on-demand logistics with anytime access from anywhere using mobility is topic discussed by many already, but what if we now add a twist to this story and include “anybody” to this concept? Can you even imagine the exponential implications of this move? By just registering into a logistics network through an app, ANYONE can become a valid, authentic transporter. When this move becomes a norm, we might as well be waving goodbye to the logistics operators who would just be a redundant appendage to the entire supply chain. How can an app entirely replace a logistics operator?

Let’s take an example:

A supplier, Mr. Daniel of ABC Goods, needs to ship a consignment from location A to location B. He logs in to the logistics app and provides details regarding the nature of the consignment, starting point, destination, and possibly desired time to reach destination. Mr. John, a college student, who owns a car, is in his native town location A and is travelling back to

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