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Demand & Supply Chain Management Evolution




18 May 2017
 
The Sharing Economy is shaking up logistics (DHL Trend Research)

DHL
DHL

  • Shifting social trends are driving preference for sharing rather than owning assets, creating viable new business models
  • Digital technology gives instant access to available assets - from warehouse space to delivery vehicles - creating new on-demand services
  • Logistics providers will facilitate growth of the Sharing Economy as assets are transferred between parties more frequently
  • Sharing Economy to grow to US$335 billion by 2025

 
Logistics will play a major role in shaping the Sharing Economy. DHL reveals in a new Trend Report today that embracing digital platforms and business models built around sharing not owning assets presents a significant future opportunity for the logistics industry. The report, entitled 'Sharing Economy Logistics - Rethinking Logistics with access over ownership' provides insights to help understand the Sharing Economy, learn best practices in the Sharing Economy from other industries, and presents practical applications of the Sharing Economy within the logistics value chain.

"The concept of sharing is nothing new, but today people can share assets and use sharing services at the speed and scale of three billion smartphone users worldwide. Naturally this started with high-value assets like rooms and cars, but the underlying concept can be applied to almost anything now," says Matthias Heutger, Senior Vice President Strategy, Marketing & Innovation, DHL Customer Solutions & Innovation. "Logistics providers can really benefit from sharing their own assets, as well as facilitate the sharing of goods that are a hassle to transport. Digital sharing platforms give instant access to what's available from online networks of users, including but not limited to hotel rooms, taxis, construction equipment household items and even people's personal time or skills. Logistics providers can leverage these developments via more cost-effective usage of warehouse space, more efficient transportation and delivery methods, or flexible staffing models."
 

How sharing works
The new Trend Report provides a guide to how sharing works and the underlying business models powering it, as well as best practice insights in several industries that logistics can learn from holistically. In the Sharing Economy, users - individuals or organizations - get temporary access to an asset, service or skill owned by someone else and which would otherwise be underused. Not only does this maximize Return on Investment through greater utilization, it produces a new revenue stream in the form of rental fees for the asset owner. Sharing is also good for the environment as it leads to fewer new assets being produced, and existing ones are being used more often. 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 US$335 billion in 2025.

Sharing is not new to logistics. In its early days, DHL pioneered an early form of crowd sourcing, 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.

 
Rethinking logistics in the sharing economy

Today, the tremendous scale of digital sharing platforms and crowd-based access to already existing assets is redefining the concept of 'sharing' and reshaping the future of the logistics. Sharing of warehousing space, transport capacities, operational data, and staffing are just some of the examples where the Sharing Economy could be effectively employed in logistics.

It could be applied across all parts of the logistics value chain to improve or change logistics operations - as well as create new businesses. For example, according to research, one in four trucks on US and EU roads are driving empty or typically only half-loaded. Digital platforms provide an instant snapshot of availability and the ability to access spare capacity in almost any truck, including smaller delivery vehicles or even privately owned cars on a day to day basis. With its recently launched Saloodo! real-time freight brokerage platform, DHL is already tackling the inefficiencies of unused capacity. Saloodo! uses the global network of smartphone users and real-time communications to reach a greater audience of shippers to take advantage of excess capacity.

Multi-customer warehouses help third party logistics providers achieve greater economies of scale by consolidating fulfillment, demand and know-how between several customers within a single site. Taking the concept of space sharing from the hospitality sector as a role model, sharing excess warehouse capacity would bring great financial and productivity benefits.

This promising opportunity for new business creation does not come without challenges. Risk liability, transparency, insurance and workforce protection are all issues that need to be addressed. More challenging is the pace of technological innovation and social change often outpace regulatory frameworks. "Collaboration between companies and policy makers is necessary to ensure development happens in a positive and productive way," Heutger points out. "With logistics perfectly placed to enable and benefit from this trend, it will play a key role in shaping the Sharing Economy and rewriting the rules of value creation."

 

 



 






 
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