The critical look at the platform trend (Søren Danielsen)

The rise of the open tracking platforms

(PresseBox) ( Kempten, )
The first integration platforms emerged around 2010. At that time they were the result of single customers that needed a very simple overview of the subcontracted fleet they were using to do transport with. The daily challenge of calling a carrier to hear if he had delivered as planned, the lack of documentation, and the failure to inform customers of delays had grown too big. These initial platforms were the first to identify just how fragmented the transport industry is: 700.000 registered carriers, 4 Million trucks and 1.800 different telematics systems. Over time the networks grew and the value of having a big network became evident as GateHouse Logistics was taken over by the American company project44.

At present around 15 platforms are presently building networks, most of them owned by investment fonds, and while a few may actually have single customers from which they earn a profit, this most likely is not a short term concern for these platforms, as their value increases with their networks. It is therefor very realistic that some of these networks will be taken over by new investors, with other business objectives.

The Facebook challenge for the transport companies

As the platforms over time change ownership, this will prove to be a concern for those carriers who actually build the networks. The fact is that most, if not all transport companies, use subcontractors. Some are 100% dependent on their network in order to deliver their transport services. The big concern is, that in order to deliver transparency to their customers, they have to ask the carriers they work with, to connect to the platform their customer is using to get the data from. It can be compared to Facebook. If you have a group of friends you are going on holiday with, you may create a “Holiday group”. One of your friends is not registered with Facebook, and can therefore not participate in your group….unless of course he signs up and becomes yet another Facebook user. You can argue that the postings will remain in the group, but the fact is that the person has now signed up and increased the Facebook network.

Network control

Facebook is not necessarily something to avoid and neither are the Open Visibility Platforms as we know them. Offering access to an already built network offers the advantage of getting faster access to data from carriers, but for larger network operators like 3 or 4PL’s, it is worth to consider how your networks are exposed to potential risks.

We believe that carriers are connecting to the open visibility platforms, because they, until now, were the only solution to the challenges of creating transparency in a very fragmented industry, thus improving the service they are delivering to the large industries with complex supply chains.

It is however a fact that many transport companies are hesitating when asked to share data. Often carriers express concern over the uncertainties about where their data may end. The concern is not only if the tour data might be disclosed to the wrong party, but very often their concern is that by connecting to a platform they may lose control over their network.

A solution to these concerns will be for carriers using subcontractors, 3 & 4PL companies to build their own dedicated networks. This can be achieved by installing a connectivity tool on their own system and simply inviting their carriers to share data directly and not via an open platform. With NIC-place "Data Control Center", this can be done relatively simple, giving the network operator the benefit of getting access to all the telematics connections of an open platform, but remaining in control and ownership of their own data and the carrier network.

 For question please do not hesitate to contact us.
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