Information Technology in Transportation


The use of traditional techniques in the management of transport systems has continued to derail the core of transport systems across the world. Many companies dealing with transportation have found the use of technology to be the best way of addressing losses, insecurity, and delivery delays. The growing transport systems under the development of internationalization and globalization have necessitated the adoption of technology-driven delivery systems. While many developments have taken place within the transport industry, the development of fast, efficient, and safe systems have remained the core of the homeland and third party logistics.

Today, the application of system-oriented transport systems plays a significant role in the development of the transport sector. Some studies show that the adoption of technology in monitoring, scheduling, and securing delivery systems have saved companies about 55% of their returns. This paper seeks to explore the role of some of the selected technologies in the development of the transport industry, especially the performance of a company’s transport. This paper is aimed at assessing the role of technology in the transport sector while identifying critical factors affecting the adoption.


The Role of Technology in Transport System

In this error of information and technology, supply chains are working extremely hard to integrate IT platforms in the management of transport. Transportation technology has enabled most companies to stage a competitive rival against their immediate competitors. The integration of technology in all transportation systems can revolutionize supply chains. Although the adoption of technology in transport has yielded enormous benefits, balancing can lead to tremendous problems. Some studies have shown that intermodal transportation modes can reap immediate and long-term benefits to third party logistics. The execution of best and appropriate technology has enabled the resolve to save costs and safety. Other studies have suggested that the integration of Radio Frequency Identification (RFID) has the capacity to deliver safe and real-time delivery systems.

Shipping technology is used in the maritime sector has seen the development of the sector in numerous ways. For instance, the adoption of equipment technology using FastShip can reduce shipping time by over 50%. On the other hand, a growing body of knowledge suggests that RoadRailer, when blended with rail technology, permits a low-cost delivery system (Tracey 34). It should be noted that using technology in both inbound and outbound transport can be the potential for safeguarding goods while on transport. The resulting sector advantages and the future of transport depend on the proper execution of technology (Tracey 34). As companies seek to implement enterprise-wide software, the transportation industry will be directed by the extent to which transportation chains will adopt information technology and communications capability.

Several technologies are emerging from restructuring transport sectors across the world. These technologies are being utilized to track the progress of delivery channels through road transport. While technology has been used for purposes different from negotiating the balance between efficiency and cost, technology has been cited as a method of providing signal control (Berglund, Van, Laarhoven, Sharman and Wandel 59). Identifying and choosing appropriate technology in the development of effective delivery and to provide trajectory information for transport channels. Many companies dealing with delivery systems as their core are implementing geographical positioning systems (GPS) and routing systems that guide vehicles while on transit. Remote control systems have been used to provide a location and directional information that is up to date. Management of transport data has proven to be a serious challenge to most companies.

These systems can be instrumental in updating the security of vehicles while in transit. Many countries are moving in to implement technologies that can be used to control traffic congestion. Collecting data can be a challenge to firms dealing with transport as their core business (Evangelista, Pietro & Edward, Sweeney 26). Managing a fleet of vehicles that deliver goods globally has proven to be a high-cost activity. Cost-saving tendencies have placed a significant focus on the use of high-tech technology. The use of ICT in transport systems remain unevenly distributed between small-medium logistics companies and large providers of transport services. Studies suggest that while large firms have the resource capacity, their adoption of these technologies remain far-less compared to small firms (Tracey 34).

However, some studies reveal that large companies representing about 5% of all firms have reported an expenditure of 95% in Information technology (Tracey 34). On the other hand, small, although small firms represent 80% of all firms, they account for less than 2% of total IT expenditure in the logistics industry. Numerous studies suggest that large scale firms continue to invest heavily in information technologies. Across the world, large companies are deploying ICT systems to support their operations for sustainable progress. Although small firms attempting to deploy IT systems are small, their utilization has a high success rate compared to large firms (Tracey 34). This scenario presents a complex issue in the development of a competitive business environment. However, the low utilization of internet technology in transport systems has failed to appreciate the role of IT in delivering results.

Although the application of logistics technologies has yielded significant benefits, many of the challenges associated with it pose two alternatives. They should accept to adopt an expensive and problematic path that add value to their operations or pursue low-cost transportation channels. Critical challenges have faced the development of IT infrastructure in managing transport systems (Tracey 34). The use of technologies is used heavily in third-party logistics that provide a wide range of transport services on a global scale. In the development of strong communication, firms should emphasize the implementation of technology as a central object in developing logistics services. All these happen in a customized form in which firms integrate various forms of technology (Notteboom 34).

Information technology capacities can be a critical element in providing a differentiated logistics service in a growing turbulent industry. Some studies have indicated that the role of third-party logistics aim at customizing operations in a transport chain. The use of technologies in transport systems can leverage logistics firms, helping logistics to effectively offer their services. For third logistics, the use of technologies can yield a rapid customization of delivery system to maintain competitive lead-times (Jayaraman and Luo 56).

As examined by many researchers, vertical integration within supply chains and logistics are expected to provide higher degree of integration of their business processes. However, the effective delivery of 3PL services can benefit from software applications and internet technologies. Therefore, 3PLs are investing most of their resources in the ICT to manage their business operations. Although the application of technologies in the development of logistics services in the recent times has gained a great attention, the adoption of these new technologies remain low in most countries.

The dissemination of ICT provides a tactical and strategic advantage for the betterment of the service. The entrepreneurial culture of a company determines the development and adoption of technologies by companies (Jayaraman and Luo 56). The discussions of the role of technology raise a number of issues. For instance, the utilization of technologies and the use of vertical have led to disintegration. This trend has resulted in 3PLs playing a significant role in the development of sustainable transport system (Jayaraman and Luo 56). High level integration of 3PLs in a supply chain and transport systems relies on the effective utilization of relevant technologies and tools. Despite the potential of using technologies in improving the capacity of transport systems, there is a slow adoption of ICT, especially the use of internet and e-business tools. This scenario leads to the fact that actual practice of technology should be emphasized to offer insights for developing transportation industry.

Intermodal transportation has evolved over the past twenty years. The term intermodal transportation has been used in various applications, including passenger and freight transportation. However, Tracy noted that the concept of transportation has been neglected as a component of competitive advantage (234). The term intermodal transportation refers to the use of more than one mode of transport in moving goods from their origin to their destinations. The use of intermodal transportation entails moving goods via physical infrastructure, and information drivers using a single freight transaction (Dowlatshahi 4199). Although the concept of intermodal transport has gained enormous application in the modern transport industry, considerable evidence suggests that logistically linking goods with more than one mode of transport is centuries-old (Dowlatshahi, 4199).

The comprehensive capacity to understand the requirements of the logistics systems in delivering goods in a timely manner distinguishes intermodal transportation from the rest of the single-led transport modes. Recent research in the transportation sector suggests that the introduction of intermodal transport systems has led to a revolution in the sector since it is secure and efficient. An intermodal transportation system utilizes a multiple modes of transports provides a flexible response that respondent to the ever-changing supply chain requirements in global distribution and markets (Notteboom, 2002).

The systems approach that is used in the design of intermodal transport systems require higher level of skills and extended knowledge in the management of supply chains. Research indicates that the integration of different modes of transport can permit the process of optimizing the trade-offs between cost, logistics and the quality of the service delivery (Dowlatshahi 4199). A well-balanced application of the supply chain capabilities and growing advances in transport technology can initiate a market-led global logistics that is accompanied with changing demands.

An integration of various modes of transport is a significant component in the efficient execution of logistics systems both locally and internationally (Notteboom, 4202). The growing need for smooth flow of information between players in the global supply chains, the effective implementation of relational database systems and information sharing among participants has created a new approach to transport system. Tracy examined the influence of inbound and outbound transportation performance in meeting timely customer demands in terms of meeting delivery schedules. Many researchers have argued that supply chains and market forces rather than traditional logistics systems will serve as the driver of global intermodal process.

The 21st century accompanied by changing customer requirements and complex supply chain systems has called on a renewed focus on intermodal transport systems. The available transport modes such as rail, road, air, inland, water, and pipeline have since operated independently for many years in spite of the technological revolution (Dowlatshahi 4200). The global logistics challenges facing the industry have necessitated the creation of an integrated transport system that incorporates all forms of transport (Notteboom 202). The development of containerization that emerged during the mid-1900s and the ongoing need for deregulation coupled with logistics and global supply chains has set a formidable ground for continual application and growth of intermodal transportation (Notteboom 202).

Surveys conducted in companies that have initiated intermodal transport systems reveal that intermodal transport has achieved in solving cost and inefficiency problems experienced in traditional transport modes. Research suggests that competitive global markets and the future of quality delivery of transportation services that meet customer expectations in terms of speed and reduced costs (Jayaraman and Luo 56-73). Although the application of intermodal transport systems is a welcome idea, the complexities introduced under a global business context pose a completely different set of challenges compared to the domestic application.

In addition, studies have indicated that the current competitive scenario experienced due to globalization and internationalization has permitted profitability for all players in the transportation sector (Haldis & Joanna 15).

According to Ford’s management team, the centralized logistics operations have proven that the company would raise routing visibility. In addition, Ford’s centralized system has increased the speed throughout the network while minimizing supply chain costs (Haldis and Joanna 15). They argue that by establishing a single point that delineates all the logistical operations have far-reaching impact on the company’s performance.

Third Party Logistics networks offered by contains continues to drive the Ford’s logistical operations. These include a logistics network powered by Network Design optimization that created an efficient inbound strategy via dispatch centers, integrated information technology systems aimed at achieving real-time visibility and effective delivery schedules (Haldis & Joanna 15). Many scholars have supported companies’ cost problems through the development of financial management systems linked with central logistics networks (Tracey 34).

Analysis of Ford’s logistics systems reveals that the company continues to be affected by the increased leakages in savings introduced by the complex supply chains.

The companies will need to create systems that seal these financial loops to gain a competitive advantage over its key competitors such as Toyota and General Motors (Haldis & Joanna, 2009). It is widely recognized that the use of ICT in supply logistics remains an effective component in a systematic development of technology-led enterprise. The shift from traditional supply chain technologies characterized by fragmentation toward integrated approaches has created a sustainable a transport sector. This emphasis on establishing a formidable delivery channels has necessitated the adoption of ICT at the heart of organization. Constant monitoring of the systems where carriers can provide remedial actions for negative factors serves to leverage Ford against its traditional cost and expenditure problems. Issuance of automatic carrier rating on low-performing carriers has established a competitive and quality service from supply chains partnering with Ford Motors, which distinguishes Ford from the rest of its competitors.

Currently, Ford Motor is establishing a standards-based WhereNet, Active Radio Frequency indemnification (RFID), and real-time locating systems (RTLS) to improve its inventory management systems (Haldis & Joanna, 15). The assessment of the Ontario-based Assembly Complex will work to deliver on the principle of Just-in-time. This initiative will lead to the establishment of the world’s largest real-time locating systems ever managed by an automotive manufacturer. Operational forecasts suggest that the logistical plant will bring flexible manufacturing process that will respond timely to market changes without lengthy product life cycles and challenges of changeover witnessed in traditional logistics systems (Haldis & Joanna 15).

While it may be argued that Ford has made strategic advancements in its logistics operations, there is still room for improvement to enable the company benefit from full advantage of modern logistics. There is a need to create a logistics network that streamlines suppliers, consumers, and quality simultaneously without compromising on elements of time and quality service. Therefore, using the advantages of 3PL services, Ford can improve its carrier operations to ensure complete accountability of its supply chains (Haldis & Joanna, 16).


Globalization and internationalization of business introduces the growth of worldwide competition (hypercompetition) between global supply chains and logistics companies. This situation creates new requirements on global players to design and execute coordinated and integrated modes. Studies show that when global aspects set in, the execution of intermodal transports systems becomes more challenging compared to domestic application (Jayaraman and Luo 64). The emerging global trends have caused a shift from pure competition among supply chains toward strategic partnerships that benefit from the advantages of all players (Jayaraman and Luo 55).

Internationalization and globalization of transport resources and global markets place pressure on intermodal transport than before. Global trends that tend to shift the market and customer demands and pose greatest expectations on intermodal and transport systems supporting global logistics and supply chains (Jayaraman and Luo 67). The application of intermodal transport integrated and seamless systems have created capabilities that focus on flexibility of movement of goods, variance, and speed of delivery.

As companies move with speed to implement tagged tracking systems, third-party transport systems are increasingly executing the technologies that comply with the changing technology requirements. Therefore, as firms increasingly defy traditional technologies in favor of new applications, 3PL’s are moving quickly to adopt technologies as a mandate (Evangelista et al 24) The growing need to integrate third-party supply chains has made firms to develop and execute system-wide technologies (Evangelista et al 25). Increased use of technologies will provide supply chain managers with intermodal trade-offs. Information communications capacity will give substantial challenges to enable effective flow of information and goods between supply chain destinations. These applications will be useful to the development of private and public IT infrastructure. Recent research in the transportation sector suggests that the introduction of intermodal transport systems has led to a revolution in the sector since it is secure and efficient. An intermodal transportation system utilizes a multiple modes of transports provides a flexible response that respondent to the ever-changing supply chain requirements in global distribution and markets. The growing transport systems under the development of internationalization and globalization have necessitated the adoption of technology-driven delivery systems. While many developments have taken place within the transport industry, the development of fast, efficient, and safe systems has remained the core of the homeland and third party logistics.

Works Cited

Berglund, Magnus, Peter Van Laarhoven, Graham Sharman and Sten Wandel. “Third party logistics: is there a future?” International Journal of Logistic Management, 10.1 (1999): 59-70.

Dowlatshahi, Shad. “The role of transportation in the design and implementation of reverse logistics systems.” International Journal of Production Research, 48.14 (2010): 4199–4215.

Evangelista, Pietro and Edward Sweeney. “The Role of Information and Communication Technology in Small Italian Logistics Enterprises.” National Institute for Transport and Logistics. 2010. Print.

Haldis, Peter and Joanna Frank. “Ford Develops Communications System Between PHEVs and Electric Grid.” Global Refining & Fuels Today, 1.41 (2009): 15-16.

Jayaraman, Vaidy, and Luo Yadong. “Creating competitive advantages through new value creation: A reverse logistics perspective.” Academy of Management Perspective, 21.2 (2007): 56–73.

Notteboom, Theo. Current Issues in Port Logistics and Intermodality. Apeldoorn: Garant, 2002. Print.

Tracey, Michael. “Transportation effectiveness and manufacturing firm performance.” International Journal of Logistics Management, 15.2 (2004): 31–49.