Transport companies: accelerate innovation & cooperation and seize the opportunity!

Tue | 23 Feb 2021 | News

Transport companies: accelerate innovation & cooperation and seize the opportunity!

Wave of acquisitions in transport & logistics offers opportunity for growth acceleration

By Robbert Minderhoud - Chief Marketing Officer Simacan

If one thing has become clear in recent months: cooperation is the only way to make a society, organisation or industry better and to keep it functioning. That is our common denominator: the developments in the world, from Brexit to CETA (the trade agreement with Canada), the EU procurement of the corona vaccine or keeping a democratic system going. Cooperation does not stop at the border of a country, nor at the end of a car park of a transport company. 

What also does not stop is the acceleration of digital transformation. However, a transport entrepreneur will soon reach the limit of adoption if he only focuses on his own world and ignores the opportunities for cooperation with others.

The desire for autonomy will always remain. Fed by sentiments, cultural values or norms of the past, there will always be a breeding ground for breaking off cooperative ties or changing them into a new advantage. This often seems to work out well. 

A small group of Nexiteers shouted loudly after the turn of the year that Brexit was already a success and that the Netherlands should follow, although according to economists the impact of Brexit will be disastrous for the island's economy. Not only symbolically, kilometres of goods transport came to a standstill when panic over the British variant of the virus paralysed the lifeline between the UK and the border of France, just before the trade agreement was signed. 

Change is difficult, but necessary

Disruptiveness in cooperation often exposes the pain of old cooperation, but often hides the price of new reality. An old situation seems bad at first, but the new one also requires effort. That is the pain and the price of the transition, which is never easy and will not happen without effort.

We often just don't want to learn. The desire for autocratic power, power structures based on totalitarianism, driven by money and interests, arise again and again. Organisations, companies, societies are driven by people and people are often driven by their own interests. 

Yet we are always thrown back on cooperation because that is how the world's ecosystem is designed. You may want to claim part of the sea for your own fishing, but if your market happens to be on the other side of the sea, you will have to sail over to that area or build a bridge. The world is no different now than it was, say, 300 years ago. You see this reality more and more in transport and logistics nowadays, but it is also a bitter necessity. Only by working together is there often any prospect of a future. 

New forms of collaboration through digitalisation

Digital transformation is forcing organisations to think about new forms of cooperation. Years ago, this first happened to 'paper' organisations such as notaries and financial institutions. The 'funny thing' is that fairly conservative sectors were the first to change. Financial software packages were often at the basis of this transformation. The (now online) accounting program had to be fed with information from many IT systems in the organisation. Taxonomies were invented to unambiguously categorise and exchange data. 

A world without such arrangements and links is no longer imaginable in the entire business world. But making good use of them takes time. For example, as progressive as a law firm may be, you still do business with arch-conservative organisations such as a court where the fax still works overtime. In that respect, the world of logistics and transport is not very different. After all, change takes time, but if you don't, you are sure to suffer from 'boiling frog syndrome': you are overtaken by reality and that is that the world around you has changed faster than you have. And then you are on your own. 

Transport entrepreneur: look at your business from a different perspective

Recently I spoke to a transport entrepreneur in the food industry. This entrepreneur told me that he was in a meeting with a varying composition of transport companies. The common denominator was that they all own capital-intensive vehicle fleets. He painted a picture of a dichotomy that was becoming increasingly visible. There was a group that talked about the assets (the trucks) and a group that talked about the acceleration they want to make in the area of cooperation in digital transformation

A painful image emerged in my mind of the gap that is opening up in the developments in the transport sector. By way of comparison, the great change in the world of accountancy, driven by digital developments, led to a boom in takeovers in this world. The big ones ate the small ones. Small offices with a legacy or little urge to innovate found themselves on their own: many stopped practising. Increased regulation also caused many to quit or go out of business.

Eat or be eaten

We see the same dynamics in the world of transport, but the impact is much greater. Transport is a capital-intensive business and the competition is fierce. Regulations are increasing rather than decreasing under pressure from governments: CO2 restrictions, inner-city problems and cross-border regulatory pressure have changed the game very quickly and forever. 

A takeover wave has already appeared. The big ones are eating the small ones with just one goal: transforming these companies to make them future-ready. Of course, the lines they operate and the assets they have are of interest, but more and more companies are looking to become more profitable, digital and future-proof in the short term. The merger of Peter Appel and Simon Loos draws the contours of the future that the world of transport is facing: big powers that will dominate smaller powers.

The question then arises whether you can still earn a living as a transport company with less strength. Of course you can. There are, obviously, still beautiful, powerful niches to be found in specialised goods transport, but the need to connect with the outside world, to cooperate, remains undiminished. The juggernauts that are going to emerge in the land of transporters will not be able to do it alone. They may have the power and the capital, but these parties, too, will have to work together and will have to throw out a line for cooperation with the specialists. 

They will therefore continue to knock on the door of small transport companies for cooperation or perhaps even a takeover. Unlike before, they will no longer be interested in your beautiful Scania LZV or Mercedes Actros. More than ever, they will be looking to see if the business processes are properly organised, the numbers add up and whether there is efficient cooperation. This means that the digital processes must be in order, and not just financially. More important is whether the entire data management is in order and plug and play. Driven by the shipping clients, in turn fed by consumers, shareholder interests and international regulations, they will check whether the digital homework is complete.  

Simacan Platform supports cooperation between transport companies

Make sure your taxonomies and your links are correct so that you are ready to link up and this time not with a trailer! Only then will engines keep starting, driven by data and no longer by diesel. 

Simacan supports all parties involved in the supply chain with real-time technology. Our added value here is the combination of geodata and technology, routing and real-time data, which we can deploy extremely well strategically in our clients' transport chains. High volumes of data and event-driven datasets are at the core of our data processing. Everything is focused on data transparency and data exchange solutions, supported by our ISO certification.

Are you curious what the Simacan platform can be of value for chain cooperation and innovation of transport companies? Please feel free to contact us for more information or a demo without any obligations.