Last week I had the pleasure of attending the annual WERC (Warehouse Education Research Council) conference in Providence, Rhode Island. The conference was well-planned, well-attended and very informative, especially in the areas of new technologies and solutions that are revolutionizing our industry. One of the personal highlights for me was joining industry colleagues from Iron Mountain and Cargomatic as a panelist in the “Crowdsourcing and Collaborative Logistics” session. Of course, it was a nice opportunity to put a little spotlight on FLEXE, but the most exciting aspects of that session were the amount of growth, interest and innovation occurring in these relatively new areas of business.
The discussion was moderated by Dr. Jennifer Pazour, Assistant Professor of Industrial and Systems Engineering at Rensselaer Polytechnic Institute. Jennifer did a great job explaining crowdsourcing and collaborative logistics and how and why those ideas are gaining such a foothold throughout the supply chain. If you weren’t able to attend the conference or this specific session, you might find Jennifer’s information helpful.
What was so striking about her opening presentation was the breadth of example companies she cited that are currently providing on-demand solutions across the entire supply chain. Her examples included numerous on-demand “crowd-shipping” and warehousing companies like:
- Roadie, DropTrip, TruckerPath, PiggyBee and Friendshippr that provide long-haul, city-to-city shipping services
- Flexport, an international long-haul container shipping service
- Cargomatic, Convoy and Shipster, providers of short-haul B2B delivery services
- Deliv, Amazon Flex, Instacart, Postdates, Doordash and Orderup, last mile delivery services that move products from retailers, grocery stores, malls and restaurants directly to consumers
- And companies like FLEXE that enable businesses to acquire and expand warehouse space anywhere on demand.
To give you an idea of what these types of companies bring to the party and how they operate, this is how Jennifer described four of the primary characteristics of the crowdsource, on-demand business model:
- Online-to-Offline: Supply resources (e.g. truck or warehouse space) and demand requests (from people/companies seeking truck or warehouse space) are matched online using a computer application provided by an on-demand solution provider like those listed above. The logistics service is performed offline (physical transport or storage of goods).
- Independent Freelance Users Control Supply Resources: The supply resources (e.g. trucks, warehouses, personnel) are not owned or employed by the on-demand solution provider or a single organization.
- Open Market or Open Crowd: Those supply resources originate from a crowd of independent members who have resources to offer, which creates a marketplace for those resources. Membership to the “crowd” typically has low barrier to entry.
- Visibility and Reach: The on-demand technology platforms that enable the open market provide visibility into untapped underused capacity, as well as a broad reach for demand requests, which enable the opportunities to utilize otherwise unused assets (such as unoccupied truck or storage space).
Comparison of Traditional and Crowdsourced Logistics Systems
As we got deeper into the details we discussed a number of operational differences and advantages of crowdsourced logistics systems vs. a traditional model. The WERC audience found it illustrative and clarifying, from an implementation standpoint, to compare functional areas of a traditional model (that might directly involve players like P&G, UPS and J. B Hunt) with a crowdsourcing model (that might include on-demand solutions like FLEXE, Cargomatic and Instacart). I’ll wrap up by sharing this side-by-side comparison presented at the conference.
We look forward to seeing everyone at WERC 2017!