In the media

Resilience in transport: From adrenaline rush to always-on

Martijn Wagner

By Martijn Wagner

02 April 2024

Crisis after crisis hits the transport and logistics industry, and organizations must navigate their way through. However, the notion that resilience is temporary, only needed when an acute crisis arises, is outdated.

It's likely that the transport sector will remain in a state of constant transformation over the coming decade (and possibly even longer). This calls for permanent resilience. Always-On. But what does that look like in practice?

Resilient transport organizations distinguish themselves firstly by their ability to anticipate and respond to various scenarios. Thanks to this 'scenario thinking', resilient organizations know exactly which levers of the value chain to adjust to tackle unexpected events.

Flexibility in pricing strategies, customer agreements, and operational agreements, among other things, are important for quick course corrections. However, always keep the goal in mind: focusing on cost savings during a crisis may negatively impact quality and customer trust.

Real-time insight into operations is therefore a top priority for many transport organizations. The resilient organization strives for complete transparency, not only in the precise contents and real-time location of shipments, but also factors that can affect the quality of goods, such as temperature and humidity.

With this information, carriers can proactively intervene and avoid problems during shipments (including delays or spoiled goods). The receiving party can also be proactively informed about actual arrival times.

Future-proof resilience comes from outside

While internal resilience gets you quite far, it's not enough in the hyper-connected transport sector. You're simply not fully resilient if you depend on others for it.

Collaboration in the value chain – even among competitors – is therefore necessary to keep organizations (and the industry as a whole) resilient. This is not so easy, as this challenge comes with difficult questions: for example, what data should you share with others to become resilient together? And how much confidential information are you willing to share for this?

Knowledge sharing can work well in dialogue. An effective form of this is entering into agreements where one party uses the output of another to prevent duplication of work.

For example: when a railway infrastructure manager already has an approved installation process for new technology, other (international) managers can benefit by adopting this process. This saves costs, speeds up installation, and provides better insights. The same applies to standardizing components to ease maintenance and sharing data.

“We must realize that we can never achieve 100% resilience.”

Supply chain control towers play a central role in this collaboration. Like an air traffic control tower, the 'control tower' serves as the central nervous system for logistics activities, where all data and insights come together to manage goods and transport flows and proactively respond to coordination needs. This only works if the entire chain is connected to it.

This kind of collaboration requires a fair distribution of costs and benefits. If one party bears the burden, they should be compensated by those who benefit. Short-term gains must be sacrificed for long-term resilience and sustainable ecosystem growth.

Co-creation in that ecosystem must also be balanced, so that all participants have clear value propositions. This requires transparency and data exchange to create value and avoid unnecessary competition.

The boundaries of resilience

Digital technology plays a significant role in resilience, but some industries still struggle with paper documentation. Although digitization is encouraged by the government, strict regulations can nevertheless slow progress. It is therefore important for the government to actively facilitate digitization and provide more room for efficiency and innovation.

The same applies to tender processes. Shorter contract durations and other types of service level agreements make organizations more flexible, while the common long-term agreements with an abundance of compliance frameworks achieve the opposite.

Finally, we must realize that we can never achieve 100% resilience. The risk of failure is and remains ever-present. Therefore, we should see resilience more as 'being satisfied with the achieved result in the event of adversity'.

Resilience has become an essential attribute for organizations in the transport sector. While resilience does not guarantee success, it helps organizations to respond better and faster to unexpected challenges and strive for a positive outcome in a permanently disrupted world.

Read the original article in Dutch

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