Companies with physical locations lost $867,634 in revenue on average in the last year as a result of rising costs, economic instability, labor issues, supply chain disruptions, and operational inefficiencies, according to new research from Motive. In fact, the trucking and logistics industries experienced over $1 million in losses.
"Throughout the past year, leaders in the physical economy grappled with rising uncertainties, escalating costs, increasing fraud, and a scarcity of skilled labor," says Shoaib Makani, co-founder and CEO of Motive. "The need for transformation is evident, with limited visibility and data silos hampering profitability and heightening safety risks. Leaders recognize technology, particularly AI, as a game-changer for automating proactive decisions, improving visibility, and enhancing safety, effectively addressing industry challenges and presenting opportunities across this critical sector of our economy."
Key takeaways:
- The Top 5 challenges that threatened physical operations in 2023 include rising costs (59%), economic instability (51%), labor shortages and talent retention (45%), supply chain disruptions (42%), and operational inefficiencies (36%).
- Half of leaders think that 12 months from now the economy will be better than it is today, while 18% expect it to be about the same, and 32% expect it to be worse.
- Nearly half (46%) of leaders are using more than 10 individual tools to manage their operations, with 30% saying it’s too many to count.
- As a result, 58% say they spend most of their time dealing with reactive issues vs. proactively managing their workers, fleet, spend, or assets and equipment. 44% of leaders admit to losing track of vehicles at least monthly.
- 44% of physical operations leaders say fraud has a big financial impact on their business but aren’t sure how to find it. Among the c-suite, this jumps to 57%.
- On average, leaders estimate 19% of their current fleet spending may be fraudulent with construction leaders estimating fraud to be as high as 22% of spend.
- The Top 5 opportunities for physical operations over the next 12 months include updated technology and software (33%), economic stability (31%), supply chain improvements (31%), increase in demand (30%), and operational efficiencies (29%).
- 80% of leaders agree that having a single, end-to-end solution to manage physical operations would make their job easier.
- The Top 5 areas where leaders see artificial intelligence (AI) bringing the most value include tracking assets and vehicles (43%), more accurate decision-making (40%), expense planning (39%), reducing administrative work (39%), and detecting fraud (38%).
- 69% of physical operations leaders think AI will have a positive impact on their jobs and nearly one-third expect AI to address labor shortages.
- 73% of leaders agree that roads are safer with AI-enabled cameras and 64% say AI is crucial for preventing accidents and coaching drivers.
