A RESEARCH ON THE EXAMINATION OF NEW APPROACHES IN TRANSPORTATION SECTOR

Abstract

Today transportation costs are rising due to increasing product options, rising fuel prices, small amount but frequent shipments, rising transport to whole country with e-commerce activities. For this reason, the sector is always open to new developments. As is the case in the world, as a result of the change and development of e-commerce especially in the field of e-commerce with the removal of the limits of the electronic communication in Turkey, cargo sector will also undertake the role of the consultant firm and offer its customers many different field values. As a result of changing climatic conditions, they will create environmentally friendly vehicles and business methods that will create more responsive operational processes around the environment. In this context logistics sector stakeholders have to create new strategies for sector sustainability. This study will examine the distribution strategies developed in the world and our country and analyze the new trends in the logistics sector.

Full text

© International Logistics and Supply Chain Congress 2017
October 19-20, 2017, Istanbul, Turkey 1
A RESEARCH ON THE EXAMINATION OF NEW APPROACHES IN
TRANSPORTATION SECTOR
İlknur YARDIMCI
1
, Mehmet TANYAŞ2
Abstract ⎯ Today transportation costs are rising due to increasing product options, rising fuel prices,
small amount but frequent shipments, rising transport to whole country with e-commerce activities.
For this reason, the sector is always open to new developments. As is the case in the world, as a result
of the change and development of e-commerce especially in the field of e-commerce with the removal
of the limits of the electronic communication in Turkey, cargo sector will also undertake the role of the
consultant firm and offer its customers many different field values. As a result of changing climatic
conditions, they will create environmentally friendly vehicles and business methods that will create
more responsive operational processes around the environment. In this context logistics sector
stakeholders have to create new strategies for sector sustainability. This study will examine the
distribution strategies developed in the world and our country and analyze the new trends in the
logistics sector.
Keywords ⎯ Innovation, Transportation Management, Trends
1. Introduction
The demand for improving the quality and efficiency of transportation service has been
growing, and new technologies have been entering the market at a rapid pace (Feng, 2014).
Commercial transport companies have been hesitant about adopting more advanced technologies for a
number of internal reasons including the lack of a digital culture, privacy concerns, and cost and
widespread confusion about which hardware and software breakthroughs will have the biggest effect
on profitability and overall organizational performance is a big handicap as well (PwC,2015). This
situation can be overcome by adopting aspects of advanced vehicle-related IT systems, automated fleet
management, cloud-based data analytics, robotics, location detection, and autonomous vehicle
technologies, which will gained the flexibility and capabilities to shift gears and focus on the most
profitable services based on customers’ needs.
Although information systems have been disrupting carrier operations and logistics for years
compelling companies to develop sophisticated data networks that respond ever more quickly to
customer shipment demands, track shipments more transparently, and offer faster and more definitive
delivery schedules only now are these technologies being implemented by a raft of new competitors
with new business models.
2. Innovations in Transportation Sector
The modern consumer is the case with many industries, transportation and logistics will continue to be
shaped by rising consumer expectations in today. Those have an inherent desire to receive goods and
services instantly putting increased pressure on transportation and logistics companies to deliver goods
exceptionally fast, and at the lowest price. Consumers now demand unprecedented visibility into order
status, tracking and delivery, forcing the industry to invest in new technologies and partnerships.
Increase of consumer demands are fueled by the explosive growth of e-commerce. According to a
1
İlknur YARDIMCI, Maltepe University, Faculty of Business and Management Sciences, Department of International Trade
and Logistics Management, İstanbul, Turkey, ilknuryardimci@maltepe.edu.tr
2 Mehmet TANYAŞ, Maltepe University, Faculty of Business and Management Sciences, Department of International Trade
and Logistics Management, İstanbul, Turkey, mehmettanyas@maltepe.edu.tr

© International Logistics and Supply Chain Congress 2017
October 19-20, 2017, Istanbul, Turkey 2
survey by UPS, 51 percent of purchases were made online in year 2016. Moreover, the phone and
mobile technology are becoming the primary shopping device of consumers, according to PwC,
meaning that they can literally shop anytime and anywhere. To compete, retailers must employ an
omni-channel logistics strategy to deliver a seamless shopping experience. This inevitably introduces
new supply chain, fulfillment and shipping challenges.
Figure1. Trends in Transportation Sector
From changes in the modern consumer’s needs and the growth of ecommerce to digitalization of the
supply chain, automation technology, and the overall economic shift to the cloud, 2015-2020 as being
pivotal years for transportation and logistics companies. New generation mobile systems, use of
drones in the logistics sector, intelligent urban logistics, new technologies in supply chain
management, supply chain 4.0 (IOT, virtual reality-increased reality, big data), demand planning,
optimization are the most mentioned topics in 2017. For collecting them under general categories the
more intriguing and potentially high-impact technologies available now or on the horizon to consider
sorted as:
2.1. Self-driving / Autonomous Trucks / Connected Vehicles: Even though today the technology
exists for autonomous trucks, it must still overcome several obstacles, including perfecting driverless
software. In this way it can operate in crowded urban environments, rather than only on wide-open
highways where traffic flows freely and vehicle regulators are still working out rules for autonomous
driving permits and safety requirements (Barker et al, 2013). In the interim, though, commercial
transport companies should begin the process of revamping their trucking fleets with self-navigating
equipment that can learn to drive from human truckers. Through the use of myriad sensors, an
artificially intelligent vehicle can evaluate road conditions and observe how the human operator
responds to various exceptions along the route. In the process, the soon to be autonomous truck would
collect anecdotal data about instinctual human driver proclivities, such as not turning left into a busy
side street even though the GPS suggests it is the fastest route. Moreover, communicating with one
another over the cloud, these vehicles can share what they have learned and amass more sophisticated
knowledge about driving than could ever be programmed in a lab. Ultimately, with this level of
software and hardware development, these trucks should become better drivers than any individual
human operator.
Considering the developments in this sector, AT&T added more car data subscribers than smartphone
subscribers or tablet subscribers .These data plans deliver software updates to the vehicle, traffic data
to the navigation system, and Internet connectivity to the passengers. Connections with other vehicles
and with infrastructure reduce congestion and vehicle fatalities. They also enable automakers to
develop new tools for predictive and preventative maintenance. Connectivity transform the auto
insurance market by enabling insurance firms to differentiate between safe and unsafe drivers, and
also help with shorter and safer commutes, plan fleet purchases and efficiently route, manage, and
maintain vehicles.

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October 19-20, 2017, Istanbul, Turkey 3
2.2. Real-time logistics: Soon it will be possible to integrate the trucks in the entire supply chain into
the logistics data. The advanced telematics has made it possible for the transportation companies to
use the cloud-based analytics to locate the truck, the health and fatigue of the driver, the heat of the
load and the barometric pressure. It will track and monitor the factors. At the same time, telematics
will facilitate automatic freight matching. The truck trailer can determine the available space, weight,
route and ETA based on the sensors and can transfer this information to software that produces the
most efficient and cost-effective scenario for moving loads. Carriers can become more efficient using
analytics to more efficiently distribute their fleet, optimize routes, and predict traffic.
2.3. Robotics: UPS, DHL and FedEx as the company is experimenting with robot loading and
unloading of irregular parcels. The increased mobility provided by the gyroscope and mapping
technologies further increases the robotic awareness of the specific sender size and recognition and
can carry them to the appropriate places for collection and packaging. With this technology, labor
costs can be greatly reduced while shipping and delivery times are accelerated (T. Niemueller et al
2017).
2.4. Predictive networks: Similar predictive networks can be used by carriers to improve their
internal operations. Carriers can become more efficient by using past event-based analytics to deploy
their fleet more effectively, increase capacity and load balancing throughout the logistics chain,
optimize routes, and predict traffic and accidents. Giving better insights into a customer's shipping
habits and marrying this knowledge with a new generation of telematics can ensure that a carrier will
deliver the best possible delivery on time, even at peak periods and when driving conditions are
challenging.
2.5. Supply Chain Innovation: Omni channel logistics owes more to an inclination that will spread
itself as a "digital supply chain". IOT's power and data-driven insights offer tremendous potential to
improve customer service and maximize productivity, leveraging various points throughout the supply
chain. Big data and predictive analytics reinforce logistics that can explain external factors that can
help mitigate risk significantly throughout the supply chain, such as natural disasters and war hazards.
2.6. Automated Delivery of Goods: Movement towards automation, efficiency is greatly increased.
Amazon has begun to experiment with drones, a new form of express delivery, and the advances in
sensor technology have transformed autonomous tools into reality for 2017 and beyond. These
automated solutions have the potential to significantly increase safety, mitigate risk and improve
productivity (Kunze, 2016).
2.7. Logistics as a Service: The cloud logistics movement in the broad sector enables business models
of "logistics as a service". Finding innovations has allowed real-time information access to supply
chain processes to be controlled, making them more agile in response to volatility or disruptive events.
In the meantime, this same technology facilitates flexible integrations with other key business
processes to optimize all operations (URL1).
2.8. Collaborative Consumption: Services like Uber and ZipCar allow one to get what they want
(on-demand mobility) without having to buy what they do not need. This reduces car sales while
redefining luxury in cars. The advantages of this system are that it does not need to be involved in
traffic, to worry about ticket acceleration, to find parking, to charge or fuel the vehicle, or to pay
insurance.
2.9. Electric Drivetrain: An electric drivetrain is more powerful, compact and efficient than the
fossil-fuel alternative and produces zero local air emissions. While providing unparalleled
combination of electric drive performance and efficiency, it produces maximum torque at any speed
while achieving unmatched good wheel efficiency by internal combustion engines, and captures
energy with regenerative braking. Investments in battery technology and disruptive innovations of

© International Logistics and Supply Chain Congress 2017
October 19-20, 2017, Istanbul, Turkey 4
emerging battery companies significantly reduce energy storage costs. Low-carbon electricity will
continue to become more economical; Fossil fuels will become more expensive in the long run. As a
result, more segments of the transportation sector will give up the electric drive market share.
Segments of heavy-duty vehicles, such as transit buses and local delivery trucks, will be a pioneer in
the electrification of transportation because electric drives are very attractive for heavy short-range
vehicles.
2.10. Efficient Multimodal Network: Automobiles will be integrated into an efficient intermodal
network. The BMW iSeries is the first attempt by an OEM to include public transport in the driving
experience. Several companies, such as INRIX and Waze, have developed to improve the efficiency of
our driver. Now, start-ups are working to increase transparency in public transport and add frustration
to the community, sell tickets to smartphones, and reduce friction through price calculation for
multiple travel options. Combining users' calendar, location, and travel preferences, mobile
applications can now automatically plan the most effective trip possible using real-time data.
2.11. New Materials: (And mandatory 3D printing reference) In the short span, the light weight
increase will intensify over the next decade. Fuel efficiency standards mean that producers are
motivated to lose weight: now weight is a more important decision factor than cost of purchase.
Electrification directs lightness to the extent that it increases the range and reduces the desired battery
size. Lightening demand comes at a time when the cost of carbon fiber parts is falling dramatically. In
the mid to long-term, new automotive manufacturing technologies, including 3d printing, will change
the way cars are designed and installed to enable higher performance, lighter and newer design.
3. Literature Review
When the literature is examined, it’s seen that the most of the studies are done about the Collaborative
Consumption field, number of studies followed by Supply Chain Innovation, New Materials, Electric
Drivetrain, Real-time logistics and Predictive networks. Robotics, Automated Delivery of Goods,
Logistics as a Service, and Efficient Multimodal Network fields are specific areas, for that reason
Because Robotics, Automated Delivery of Goods, Logistics as a Service, and Efficient Multimodal
Network fields are specific areas for that reason minimum number of charts pie is in these areas. It is
also noteworthy that publications are mainly based on USA.
Figure 2. Number of Studies in Literature
3%
6%
0% 6%
27%
0%
1%
38%
8%
0% 11%
Number of Studies in Literature
Self-driving /
Autonomous Trucks /
Connected Vehicles
Real-time logistics
Robotics
Predictive networks

© International Logistics and Supply Chain Congress 2017
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4. Applications of New Approaches
The innovations that listed in Section 2 find applications areas such as listed in Table1.
Table1. Applications of New Approaches
Innovation
Country
Amazon announces Prime Air, which will deliver packages for 30 minutes without
placing orders by Drone. The first Prime Minister's turn-off was completed by a UK
customer at the beginning of December 2016.
England
Uber’s autonomous trucking arm, Otto, made its maiden voyage in October,
delivering 50,000 cans of beer via self-driving vehicle plying the Colorado highways
from Fort Collins to Colorado Springs.
U.S.A
Arizona-based start-up Local Motors buried IBM's Watson Internet for Things
Automotive in a bus-free shuttle bus produced by 3D printing. Designed as a bus, Olli
put his first passengers in the streets of shopping areas just outside Washington, DC.
Local Motors plans to produce commercial land vehicles based on this design.
U.S.A
Skuchain, a Silicon Valley company, created a transport chain application using
block chains. The concept behind Bitcoin, the block chain, has been introduced as a
potentially safe platform for direct business-to-business activities in financial
services, as it creates a verifiable and auditable information package sequence for
each transaction. This technology applied to commercial transport can create more
seamless and transparent communication and interaction between carriers and
transporters, possibly adding costs to customers by removing distributors and other
intermediaries.
U.S.A
Skuchain’s service and similar ones may reduce customer concerns about using
smaller, less experienced carriers for part of their shipments because the safeguards
built into block chain ostensibly create parity between new entrants and larger,
established companies in safeguarding and tracking shipments step by step and from
door to door. Also possible, though, is that established carriers will embrace block
chain to reduce transaction complexity and enhance their brand with customers.
U.S.A
Convoy is a one-year company that matches software deliveries to a region with
tractor trailers from small local suppliers to maximize planning efficiency and
minimize shipping downtime. News came when Unilever signed a deal with a large
part of the logistics of the consumer products conglomerate in North America.
U.S.A
This so-called sharing economy model, similar to what’s happening in the taxi realm,
is becoming a popular commercial transport option globally. UberCARGO in Hong
Kong, Dolly in the U.S., and Nimber in Norway are other players hoping to make a
splash in this arena. The sharing economy opens up possibilities in other areas of
logistics as well. Seattle-based Flexe, for example, offers on-demand warehousing by
matching available space in a location with requests for expedited warehouse
facilities. Flexe bills itself as the “Airbnb for warehouse space.”
U.S.A
NORWAY
HONG
KONG
An even bigger disruptive force is on the horizon: the rise of free-floating, contractual
services, the shipping versions of an e-marketplace. The “operators” will be cloud-
based platforms that coordinate entire routes for shipments by choosing among
carriers, hubs, depots, and warehouses to find the most efficient use of capacity. In
this environment, the owner of a single truck can compete head-to-head with
companies owning hundreds of vehicles.
-
Domino's inaugural pizza drone delivery test performed successfully.
-
Domino’s DXP pizza-delivery vehicle that was crafted out of a small Chevy to
include actual helpful aids such as an integrated warming oven and a permanent
lighted logo sign on top of the car.
-
Zume Pizza, a startup in Mountain View, California, is known for using a fleet of
U.S.A

© International Logistics and Supply Chain Congress 2017
October 19-20, 2017, Istanbul, Turkey 6
robots in the kitchen to speed up the pizza making process. But now, the company is
outfitting its pizza delivery truck with 56 ovens programmed to make pies en route to
customers. When the truck is four minutes away from its destination, an oven
containing the order will turn on to fully bake the pie. It takes 3 minutes and 30
seconds to cook, and 30 seconds to cool down.
The specialized LiDAR laser sensors that Google uses on its autonomous vehicles
cost more than $70,000. This year, the manufacturer released a miniaturized version
that costs one-tenth the price.
-
5. Innovative Enterprises in Transportation Industry in Turkey
According to analyze of TurkStat data, product and / or process innovative
enterprises in transport, storage and communication, there is decrease in 2002-2004 and 2010-2012
periods. And transport technological innovations constitute a large part of the innovations provided in
the service area on average %85.
Source: TurkStat (2017)
However, when the table is examined, it is observed that the innovations made in total and are not very
high percentages. The reason for this is that only successful projects are transferred to data.
6. Conclusion
It is seen in the result of the research that in transportation industry investments have been seen to
increase as a result of innovations. Venture investors put $5.7 billion into transportation businesses last
year, more than twice the level of investment in the previous two years combined. Uber was the big
winner, raising $3B. But other startups also raised significant funds, like GrabTaxi ($334 million),
Lyft ($250 million), BlaBlaCar ($100 million), and INRIX ($65 million).
Yet only 28 percent of the industry can claim a high level of digitization today, according to a recent
survey by PwC in Figure 3, Figure 4, Figure 5, reflecting a troubling level of reluctance among
carriers to fully embrace new technologies and business models. One common refrain from these
players is that they don’t need to invest in new systems because their traditional rivals don’t. Another
rationalization is that customers are not demanding sophisticated technology from their carriers.
According to Forbes analysis draws two different conclusions:
Table 2.Innovative enterprises in industry by economic activity and size (%)
Economic activities (NACE Rev.1.1)
Product and/or process innovative
enterprises / Enterprises with technological innovation
2002-
2004
2004-
2006
2006-
2008
2008-
2010
2010-
2012
2012-
2014
Total
35,2
27,0
38,0
Services
25,9
24,6
23,2
33,8
23,9
33,5
Transport, storage and communication (NACE 60-64)
22,3
14,9
18,3
26,8
21,0
28,7
60
Land transport; transport via pipelines
23,1
-
-
61
Water transport
9,3
-
-
62
Air transport
79,4
-
-
63
Supporting and auxiliary transport activities;
activities of travel agencies
22,0
-
-
64
Post and telecommunications
32,2
-
-

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1. Competitors. As the industry morphs, traditional rivals will no longer be the sole or even the
most threatening competition. Indeed, it will become more difficult to promptly recognize
those vying for market share because they will emerge from outside the industry and target
only portions of the commercial transportation value chain (Forbes, 2015).
2. Customers. The technological gap between some carriers and their customers is large and
growing. Companies that rely on carriers’ ability to ship their products around the world on
tight schedules, or to deliver materials from their suppliers just as promptly, are increasingly
cognizant of their carriers’ technological capabilities and these companies’ expectations for
logistics transparency and advanced software tools used to monitor shipment activity are
increasing rapidly (Forbes, 2015).
Figure 3.PwC Survey Question
50%
38%
38%
33%
28%
0% 20% 40% 60%
Lack of digital cultere and training
Unresolved questiond around data security and data
privacy in connection with the use of externel data
High financial Investment requirements
Lack of a clear digital operations vision and support/
leadership from top management
Insufficient talent
Percentage of commercial transportation companies
reporting specific challenges
Challenges in designing digital operations
What are the biggest challenges or inhibitors for building digital operations capabilities in your company?

© International Logistics and Supply Chain Congress 2017
October 19-20, 2017, Istanbul, Turkey 8
Figure 4.PwC Survey Question
Figure 5.PwC Survey Question
28%
36%
44%
21%
25%
37%
0% 10% 20% 30% 40% 50%
Overall digitization
Vertical value chain Integration
Horizontal value chain Integration
Digital business models, product and service portfollo
Product development and engineering
Customer access,sales channels,and marketing
Percentage of commercial transportation companies reporting
advanced levels of digitization and integration
Commercial transportation companies are lagging in
digitization efforts
How would you classify the current level of digitization in your company?
53%
36%
35%
31%
0% 10% 20% 30% 40% 50% 60%
Digitization of the existing product portfollo
Introducing a new digital product portfollo
Other digital services to external customers
Big data analytics services to external
customers
Percentage of commercial transportation companies
reporting specific areas
High hopes for future digitization campaigns
Which of the following new digital products or services do you plan to introduce and expect
will generate more tahn %10 of your future revenue over the next five years?

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October 19-20, 2017, Istanbul, Turkey 9
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