Fostering resilience and agility in the transportation and logistics industry

Resilience and agility in transportation and logistics

Few industries have weathered as many challenges in recent years as transportation and logistics — from supply chain disruptions to rising fuel costs. As we continue to face mounting uncertainty, industry leaders will need to quickly align their organizations with the evolving macroeconomic landscape to avoid getting left behind. 

According to Hyland’s 2023 report, “Unlocking Business Resilience and Agility,” there’s still work to be done. Thirty-one percent of transportation and logistics companies see themselves as weak or very weak — on par with the average percentage across industries. Meanwhile, 49% of transportation and logistics companies consider themselves strong or very strong — only two percentage points below the cross-industry average of 51%.

If your business falls in the half of transportation and logistics companies that don’t view themselves as resilient, what steps can you take to strengthen your positioning and better prepare for potential headwinds? We examined businesses throughout the industry and identified 10 key attributes that correlate with high resilience and agility:  

1. We have dedicated people, processes and tools gathering business intelligence to identify threats and opportunities in the market.
2. We have enough resources to try new things or technologies to improve the way we work. 
3. We have voice-of-employee processes and tools so we can understand and adapt to our employees' changing needs.
4. Our people are open to change, which makes us able to move faster than competitors.
5. Our people understand and follow the vision provided by leadership.
6. We gather ongoing data analytics on our products and services, so we understand how they are performing and how customers are using them.
7. Our information technology is adaptable to meet changing needs, like new integrations.
8. Our product teams are actively updating our products and services to adapt to the market or changing customer needs.
9. We are very good at learning new capabilities or innovating our business when we face a threat or crisis.
10. We have the right measures in place to mitigate cybersecurity risks.

These attributes are ranked according to their impact on resilience and agility, with the first item being most impactful and the last item being least impactful. After analyzing each attribute individually, we found that two attributes are particularly well-leveraged in companies across the industry: people open to change (4) and leadership’s vision followed (5). These attributes are undoubtedly important. Without cultivating an openness to change among employees and a commitment to leadership’s vision, companies can struggle to innovate efficiently.

However, our analysis also showed that the two most impactful attributes are underleveraged: business intelligence (1) and room for experimentation (2). Both have a high impact on resilience, but only half of businesses devote adequate attention to these realms, creating a clear mandate for executives seeking to improve.

Barriers to resilience and agility

Investing in business intelligence and creating room for experimentation are essential in the transportation and logistics industry. Without investing in tools, people and processes to identify threats and opportunities early, businesses can succumb to the whims of changing global circumstances. And if the past few years have shown us anything, an ability to anticipate changes and pivot quickly is essential to weathering change.

After the pandemic hit, countless transportation and logistics companies reconfigured their supply chains in response to manufacturing plant and border closures, adopted contactless delivery and doubled down on safety and social distancing measures. Interestingly, 45% of transportation and logistics businesses say they thrived during the pandemic — aligning closely with the 49% of businesses that view themselves as strong or very strong in terms of resilience. For businesses seeking a model on how to strengthen resilience through better business intelligence, looking toward companies that thrived during the pandemic can be a smart place to start.

Adapting to change, of course, also requires that your team has room for innovative thinking and license to experiment. Fortunately, honing in on this area could also improve one of the industry’s most pressing challenges right now: labor shortages. By empowering employees to bring new ideas to their managers and fostering a culture of experimentation and innovation, you can simultaneously increase employee satisfaction and retention.

It can also be helpful to consider these underleveraged attributes in transportation and logistics alongside common resiliency roadblocks for all types of companies. Our research has shown that companies across industries face four main barriers to success:

• People: Neglecting to see people as both challenge and solution
• Technology: Treating technology as a solution rather than an enabler
• Alignment: Failing to balance compliance with autonomy
• Goals: Bouncing back but not forward

By considering these setbacks alongside the industry-specific attributes, transportation and logistics companies can pinpoint their weaknesses and take a targeted approach to address them.

How to improve your company’s long-term outlook

Now that you know where transportation and logistics businesses succeed and fall short in building resilience and agility, it’s time to take a look at your own operations. Are your employees open to change but your business intelligence capabilities lacking? Do you find that your executive vision is being followed but you don’t have enough resources to innovate? Consider examining how well the 10 attributes describe your company and where you can improve.

^{1, Bob Sternfels, Global Managing Partner at McKinsey & Company, Inc., at the 2023 World Economic Forum Annual Meeting in Davos.}