Innovation

With a variety of travel options to compare from multiple providers, booking through the travel websites has always been a wonderful user experience. Key to this user experience is attributed to the GDS networks – the platform where airlines, hotels, cruises and automobile rental companies seamlessly interact over the internet to provide details (availability & fare) and accept bookings from travel management companies, online travel agents and large corporations.

While there is so much advancement made in the 'booking and distribution' aspects of GDS (richer content, bundled & unbundled products, services and personalized offers), the additional expense to suppliers and the limited interaction in the network has forced the leading suppliers to either directly sell or make partnerships outside the network. Direct selling is through supplier websites, and partnerships are limited to consortiums, value-chains and joint ventures made to address specific industry or regional challenges. And the benefits are limited to the partner companies obviously within the small boundaries of the partner ecosystem. So despite the buyers and providers being connected in such a powerful and global platform, it has fallen short in actually driving global logistics efficiencies. This by no means is a shortcoming of GDS, simply because GDS is not meant to really optimize logistics globally, it is only a platform to choose the different logistics options.

GDS has not lost its significance, but the industry is on its way for more additional exciting platforms.

The need for innovations in the Travel Transportation and Logistics (TTL) sector

TTL sector would need innovations beyond existing networks and platforms. Lack of a global platform to achieve logistics efficiencies is evident not just with commercial passenger air travel.

• Many large global corporations are looking for opportunities to optimize the logistics involved for their workforce and cargo movement
• Major airline carriers have been pushing for early visibility of demand from their key customers especially on the cargo side to better plan logistics. This is true for other carriers like trucking and facility providers also
• Localized sharing of fleet by providers are very popular in many regions across the world. Two less than full Truckloads of two providers are combined and so are the seats of two airlines. This is based on established partnership agreements. But a forum to publish vacancy orcombine logistics with a group of "trusted digital partners" is yet a dream come true
• Sharing of logistics information seamlessly is vital for critical people evacuations during distress and calamities. For instance in a remote place like Alaska, where multiple big and small oil and gas companies operate, sharing of logistics resources and collaboration between companies is inevitable, not just to optimize logistics cost but also to run the operations safely. In an unfortunate event like an oil spill or a natural calamity if every company decides to fly choppers to evacuate only their people from an island, that would only be adding more oil to the fire. And in massive evacuations, a collaborative effort would be required from all big and small players to evacuate all people from the disaster area using the combined fleet from all companies
• Advancements in IT, Digital technologies and Internet of Things are capabilities yet to be used in its full potential in the TTL domain. But the end consumers so eager to embrace technologies it is only a matter of making it available

In short, opportunity to do better logistics is open and obviously the next biggest innovation in the TTL sector would be when the airlines, hotels, cruises and other service providers in the global network start sharing their logistics relevant data with other players including competitors to find opportunities to optimize, thus reduce the logistics cost and ultimately pass the cost advantage to the consumers.

Can technology companies lead this innovation?

While 'sharing' is the underlying concept, it is the below capabilities of the platform that drives the logistics optimization

Publishing the demand without having to actually book

While traditional booking is based on choosing an option from existing supplier option, this platform gives an opportunity for individuals and corporations to publish their demand to the platform rather than having to book it against a supply in the first time. Large corporations could also choose their preferred suppliers to whom they would like to publish their demand – both people and cargo.

Dynamic travel options based on demand

Suppliers publish long term futuristic travel options based on demand predicted from historical transactions and existing patterns. With the new platform you have more visibility of the demand and can provide 'new travel options' to market based on the market dynamics visible to them. This gives end-consumers options which never existed at the time when they published their demand.

Bookings are open to 'optimize'

Consumers have the options to keep their bookings open with the considerations they are ready to further optimize their travel and reduce the cost. Thanks to the high end optimizations engines and decision making algorithms, consumers and suppliers will be driven with ongoing optimization options until the consumer or the platform makes a decision to freeze the booking

Demand consolidation and supply optimization

The last part but the most significant stage of this process would be when the suppliers team-up to manage their demand and streamline the logistics options - the fleet or the schedules required to meet the demand.

What are the key challenges?

While 'sharing', and 'global collaboration' are two wonderful concepts in paper a platform based on logistics sharing would take its time to win trust from the industry.

• The biggest challenge for the technology companies would be to lay the global foundations after addressing the regional dynamics. For this reason the platform should be established first regionally and then connect the different regional platforms on a global level
• Logistics decisions are not always driven by cost. There are many other dynamics and important elements to consider. Safety, legal and environment compliances and other industry regulations are never compromised against cost. Therefore the platform should very well consider the other factors governing logistics
• Big corporations are not great fans of sharing information in public domain. Hence one of the critical architectural consideration would be data-sharing framework by which platform users can decide what to share and to whom to be shared.

Conclusion

While sharing looks the most straight forward way to reduce costs, this is not an option for most companies and providers, until there is a platform to collaborate seamlessly and transparently within a very large ecosystem consisting of buyers, sellers, partners and competitors. And no logistics platform is a reality until it combines global logistics management solutions with Industry and region specific logistics constraints on a robust underlying technology framework.

Obviously such a robust, global platform like this would have its own challenges to get set foot in the industry but with the kind of digital transformation and technology enhancements happening around, it will be in no time we start realizing it has come