Bridging the Innovation Gap

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Bridging the innovation gap

13 Nov 2018 Geneva

IRU’s industry survey, launched at the World Congress last week, reveals that in the face of geopolitical and economic uncertainty, technology-driven innovation will be key to meeting the challenges of tomorrow. So where do we start? Here, Boris Blanche explains how we can reap the benefits of technology. But warns that the industry must first fix the fundamentals to prepare for the innovations that are coming.

With each advancement in transport technology, the global standard of living has increased dramatically. 

Some readers might remember the 1960’s, when advancements in aviation heralded the era of mass travel, allowing us to explore and invest around the globe. We can look further back in history too, perhaps to 1712 and the invention of the steam engine, powering the factories, trains, and ships that drove the Industrial Revolution. 

One of the most impactful advancements was the origin of our own industry – the invention of the automobile in the late 19th century. It transformed daily life, our culture, and our landscape while making trade easier, safer, faster, more reliable and convenient.

IRU’s World Congress took place last week in Oman, gathering businesses, governments and thought leaders to drive change at a time when road transport is becoming increasingly digitised, connected and automated. 

Could we be standing on the precipice of a transport technology revolution?

Could we again be on the cusp of an era when the innovators of our industry will see their work transform the world around them, enabling global trade, travel and prosperity? 

The potential is certainly there. Automation, electric vehicles and the digitisation of our industry will all drive efficiencies to help meet the ever-increasing consumer demand for goods. While the disruptors joining the industry bring with them a multitude of exciting opportunities and possibilities.

But unfortunately, today the ground is not quite fertile enough for the traditional operators to produce exciting, headline-grabbing innovation at scale. There are still pockets of the industry that are yet to embrace new technologies and processes, and the barriers that stop them from doing so must be addressed. 

Furthermore, the trucking industry faces a perception gap, that it is old fashioned and lacks diversity, which turns away the kind of workforce that innovation requires.

By bringing together governments and businesses - as we achieved at the World Congress with the launch of the Muscat Compact, these obstacles can be overcome. The end result will be the efficient, professional, sustainable industry we all want to see. An industry ready to meet tomorrow’s challenges.

Reaping the benefits of technology

Road transport operators are aware that they need to adapt. Research IRU carried out with its Europe-based members in April revealed that the majority (65%) were looking to invest in technology over the next six months to optimise their day to day operations. 

Equally, two in five respondents (40%) cited autonomous vehicles, and one in four (26%) digital service platforms and new transport providers, as the most important changes impacting their businesses over the next 5-10 years. 

But there exists a stark gap between the players at the sharp end of the technological transformation, Waymo, Uber, Tesla and the like, and the more traditional players in the industry who are playing catch up. 

Our research revealed that the top challenge our members believe will be overcome by digital tech is not driverless cars or delivery drones, but paper management (50%). 

Followed by transport security (41%) and load matching (30%). The insight also showed that traditional concerns about the cost of fuel (50%) and environmental and regulatory constraints (60%) remain at the fore.

Fixing the fundamentals 

For innovation to become widespread in the industry, the opportunities must be seized across the spectrum, regardless of size or location. This means fixing the fundamentals and walking before we can run.

As an industry, we need to focus on delivering the basic building blocks of digitisation for all.

Fortunately, there are a number of quick wins that can help operators do more with what they have.

For example, implementing electronic documentation, such as e-CMR and digital TIR, can drastically cut border waiting times, saving costs by up to 38% and time by up to 80%. This greatly improves efficiency and ultimately makes trade significantly easier for businesses.

Governments have a clear role to play in facilitating this change. Operators can make the move to technologies like e-CMR only where the additional protocol of the UN Convention on consignment notes is officially ratified. Where it is not already in place, legislation must seek to drive the digital switch.

The industry has the desire to change. But it’s critical that governments and businesses work together to form legislation and share best practises. Otherwise it’s unlikely we will see this desire converted into meaningful transformation.

A modern workforce for a modern world

Once operators have a strategy to innovate, understand best practise and have the necessary legislation implemented, they need to ensure they have the requisite workforce in place.

The perception gap that the trucking industry suffers from, is another, significant, barrier to innovation. Driven in part by news around poor safety, security and working conditions, the industry lacks diversity with very few young and female employees. In the US for instance, only 6% of truck drivers are women, while the average age of a commercial truck driver is 55 years old.

News of the move to automation also generates fears that driver jobs will be short lived.

We can’t say what exactly will be required of the workforce of tomorrow, but we can almost guarantee that a more sophisticated skill-set will be necessary.

Rather than displacing drivers, the gradual move to automation will mean an evolution in the role of the driver. This will bring new and valuable skills to the industry as well as improving working conditions.

Operators need to take responsibility for not only upskilling their own workforce, but also for attracting and retaining new demographics – including younger, and more female recruits - who have the necessary skill-sets for operating the transport industry of tomorrow.

Due to the current lack of diversity and industry image problem, many of those that have the skill-sets required, have a misconstrued view that the transport sector ‘wouldn’t be for them’. In actual fact they’re likely to be the exact people the industry needs, and we must be proactive in making this case.

Overcoming this will be a crucial step in enabling the industry to reap the rewards of widespread innovation.

The global impact of our work

In many countries, over 90% of cargo is delivered by trucks, and in our multimodal world, road transport is the first and last leg of almost every journey.

This is why our work is the heartbeat of international trade.  

IRU’s World Congress in Oman took place during a truly exciting time for the industry. The possibilities to innovate and evolve are almost endless. And because of the wide-reaching impact of road transport, the effects of innovation will be felt across communities, international economies and around the globe, just as they have throughout history.  

The intent to innovate is firmly in place and felt throughout the industry, but we need to take fundamental steps to ensure we’re letting it happen.

We must bring together operators, service providers and manufacturers with governments to put in place the correct legislation, share best practice and proactively appeal to new demographics to join the workforce. Having the groundwork in place to allow our innovative instincts to take root, will in turn enable our industry and global community to flourish.

A version of this article first appeared in www.intrademagazine.com 

Boris Blanche

Boris Blanche
Managing Director, IRU

Boris Blanche's role is to coordinate and strengthen IRU’s advocacy work, in addition to leading operations, finance and the value-added services that IRU provides to the industry, most notably the TIR system. He joined IRU in 2012 as Head of Internal Control, later becoming Chief Operating Officer in 2014, and successively heading all operational activities including TIR and transit systems, innovation, insurance and the IRU Academy.

His strong managerial talents and strategic vision have helped transform IRU to be able to better serve its members, partners and the road transport industry, as well as putting innovation and market intelligence at the heart of the organisation. As Managing Director, he continues his key role of assisting the Secretary General in leading this transformation, with a particular focus on further reinforcing IRU’s advocacy work, more effectively making known the pivotal role of the road transport industry in driving trade, economic growth, safety and sustainability.