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The rise of logistics tech—when the back end becomes the front end

Jan. 25, 2023
The technology to orchestrate and automate convenience has gone from being an afterthought to being a competitive advantage.

By Kashyap Deorah, founder and CEO of HyperTrack

What was once the back end of commerce has now become the front end.

In the digital-commerce economy, customers have started choosing convenience over product and price. Across industries, on-demand commerce has gotten customers used to tapping a button to move the world, and gig work has gotten the workforce accustomed to the freedom and flexibility of laboring on their own terms.

All of this means that the technology to orchestrate and automate this convenience has gone from being an afterthought to being a competitive advantage.

We at HyperTrack estimate a growing community of a million developers worldwide building logistics apps for drivers, operations managers and consumers. We conducted a survey with respondents from 300 enterprises, ranging from high-growth startups to Fortune 500 companies that are building logistics technology for flex work, field service, retail, manufacturing, healthcare, delivery and technology industries. (You can find results in our State of Logistics + Tech Report.)

It was no surprise that 59% of companies are working on a logistics tech project as we speak. To be clear, these are companies who are choosing to build and not buy their logistics tech; they want to own the user experience, workflows and integrations with other systems, as part of their core capabilities. The motivations to do so include on-time performance, workforce utilization, verification of work, and customer satisfaction.

It was surprising to note that 89% of delivery companies do not provide order-tracking links with live location information, and 72% are missing this capability entirely. A deeper conversation with some of the respondents unraveled the mystery. During the decade-long bull run with capital getting cheaper and companies being for hyper-growth, it was easier to throw money at problems—buy more servers, hire more people, and live with inefficiencies. Budgets and investments were focused on acquiring more customers through smarter advertising and marketing. Now that we are entering the era of efficient growth, basic technology to provide visibility and automate field workflows have taken priority. In fact, 55% of large companies, 63% of delivery companies, and 56% of retailers responded that bringing visibility to field operations was their top use case for this year’s logistics tech build-out.

In the fulfillment journey, think about all the things that require manual intervention—marking something done, reporting odometer miles, clocking in and out, citing reasons for failed attempts, etc. Using technology to automate this visibility brings more clarity and drives worker productivity by freeing people up to focus on more important tasks, such as fulfillment.

Logistics tech is expected to grow from $25 to $100 billion in market size over the next decade. Think about that for a second. More logistics tech will be built in the next few years than has been built in the last few decades. The State of Logistics+Tech Survey report is a great resource to learn more about the details of this technology, especially as it relates to the last mile, on-demand and gig work.