The worldwide popularity of taxi-app Uber means the word probably needs little explanation. But the type of service Uber offers, with the use of private vehicles and drivers as a shared service, to offer people a lift, is an example of a larger trend that emerged in the last decade, influenced by several social and economic conditions that made sharing, and the sharing economy, a more widely accepted practice.
What is the Sharing Economy? Essentially it’s the economic activity of platforms that transact access to an asset.
There are three players in a Sharing Economy transaction: the platform, the user, and the asset.
The Sharing Economy concept emerged around 2008-2009, after the global recession. Millennials were using smartphone technology a lot more to stay connected. A lot of people were out of a job and fell into occasional, part-time jobs and for the first time there was the need to share.
Essentially, it became about time, and skills, becoming shareable assets.
When you consider the following facts, the concept of asset-sharing seems like a no-brainer: 95% of the usable life of a consumer-vehicle is spent parked (some 23 hours a day), 80% of consumer goods are only used once a month.
Every single night over half a million people stay at an AirBnB.
In the transportation industry, 30-50% of truck capacity tends to be unused.
In the US over 41% of customers have used some sort of expedited same day delivery service.
A DHL Logistics Trend Report notes that far as disruption goes, the Sharing Economy has already made a mark in asset heavy industries like mobility and hospitality.
But the technology and business models can be applied to any industry. Logistics, with its heavy assets and infrastructure, is no exception.
Ben Gesing, Project Manager, Trend Research, DHL Customer Solutions & Innovation, and a presenter at CIFFA’s 70th anniversary conference, said that DHL dedicates a lot of time to working with startups and figuring out how to bring them into the company’s operations, and how to make its existing services more attractive.
“We believe in what we call customer-centric innovation. When it comes to new technology it becomes easy to get lost in the buzzwords. Focus on your customer needs and that is really what pulls in the technology,” he told attendees.
DHL’s yearly Logistics Trend Radar looks at technology and social and business trends impacting the industry on a 5-10-year horizon.
“Some of the challenges are that most airway bills are still on paper, and most warehouses are still operated manually. Logistics is still a fragmented industry-there are over 500 thousand trucking companies in the U.S. alone,” Gesing said, and the situation in Europe and Asia is the same.
There are four main components to how DHL looks at digital transformation:
- How can we use new technology to explore new digital business models?
- How can we use new technologies like collaborative robotics to increase operational efficiencies?
- How can we use things like Amazon Alexa to create new customer experiences? (interacting with our customers via chat box etc.)
- How do we change our touch points that way?
“The bedrock is really not about the technology but about the culture, and embedding a new skillset into the DNA,” he said.
Some sharing economy concepts as applied to logistics include truly shared warehousing, where multi-customer warehouses enable third-party logistics (3PL) providers to achieve valuable economies of scale. By operating one site (instead of two or more sites in the same area), the logistics provider can use fewer resources to meet the needs of several customers.
The concept of truly shared warehousing suggests allocating excess warehouse capacity on a digital sharing platform, and enabling pay-per-use billing of space in the multi-customer warehouse, the trend report suggested.
Gesing said that this concept is now an internal product being marketed with a few private customers.
Urban Discreet Warehousing, meanwhile, is a concept which envisions the sharing of personal storage space in urban homes, back offices, garages, and vacant rental properties via a mobile and web platform.
Other concepts include logistics asset sharing and transport capacity sharing.
Saloodo! is a product that addresses this. It’s a European Union road trade platform giving shippers the ability to book truck capacity from a single point of contact.
All carriers on the platform are certified by DHL, so the shipper has the trust that a company with a lot of expertise in the industry has been certified.
Carriers, meanwhile, gain access to large number of shipments to optimize their trucks and get paid quickly through the platform. Drivers use the Saloodo! mobile app to communicate milestones along the transport journey and to submit delivery documents.
How do small forwarders participate in a sharing economy?
Gesing, whose father is a car forwarder, has these tips:
“Look at the tools you use and upgrade them. Having your rates in a marketplace (platform) gives you access to more markets. Look at how you communicate. There are still a lot of phones and faxes in forwarding. If you’re a small forwarder your business is all about relationships. There’s a lot you can do to be more efficient,” he said.
The DHL Logistics Trend Radar 2018
In 2017, DHL offered an innovation challenge to students, startups, and institutions. It was an opportunity to do proof of concept and exhibit innovations.
Over 60 submissions came in from more than 30 countries around the world, with one winner: Parcelly.
Parcelly took first place with its mobile app-based platform, converting redundant space in local businesses and private homes into carrier and retailer agnostic parcel storage.
Parcelly is now doing a three-month pilot at 50 different locations, where DHL’s express couriers actually drop off parcels as an alternate delivery location.
“The sharing economy really drives digital transformation, although it itself is not a technology revolution. It’s really a change in human behavior, and how people are living their lives these days, and technology really carries that through it,” Gesing said.