TaaS: Key Factor in Latam Transportation Sector's Transformation

Latin America and the Caribbean represent a great opportunity for telecommunications and transportation because many countries are still lagging in road infrastructure and technology. Therefore, attractive models are needed to generate investment and interest from the private sector to achieve an optimal level of efficiency in freight transport.

In Mexico, according to data from the National Chamber of Freight Transport (CANACAR), only 67.4 percent of cargo transporters have a computer, tablet, or cellphone to carry out their activities.

This is surprising if we consider that the northern border of Mexico is one of the most active transportation crosses in the world: 81.2 percent of exports to the US and 43.8 percent of total imports from that country passed through that border in 2020. [1]

Due to the post-pandemic supply chain disruption, 54,000 jobs for freight transport operators are available in Mexico. This shortage is caused by the fact that few people are willing to spend long working hours with high levels of uncertainty, insecurity, constant changes in legislation, and payment failures.

It seems like a complicated scenario; however, technology can help improve these conditions significantly. A modern B2B connectivity business model has been developed through the development of new cloud-based platforms, known as telecom as a service (TaaS). Now, any transport organization can function as a mobile operator without the infrastructure costs and complexities related to traditional telecommunications carriers.

It's about keeping frontline workers connected while making deliveries in the field, obtaining real-time geolocation data, and significantly lowering connectivity costs per transaction.

OXIO’s solution, for example, uses the wireless infrastructure of carriers in a customized network with few assets, allowing a simple way for companies to be closer to their drivers and giving them a way to stay connected with their families during those long driving hours.

Today, it is possible to offer better data and airtime price options than traditional telephone companies, with the advantage of directly obtaining business intelligence for better decision-making.

Its application is flexible, with the possibility of designing "tailor-made plans" for each organization in record time. For example, a ground transportation company will find it helpful to increase the safety of its operators, perform timely monitoring of units, optimize route planning, and digitize payments and collections through its own private connectivity network.

This technology has advantages as an aid to improve the safety of personnel: beyond the punctual tracking through GPS, it is possible to maintain communication with all the operators at the same time; for example, to send alerts regarding delays or accidents on the route, adverse weather conditions, or natural disasters. Additionally, the solution can help to develop incentive programs to increase company loyalty while gaining business intelligence to improve logistics planning for future deliveries and staffing in peak seasons.

On the other hand, the data obtained through the OXIO platform helps monitor operators' interaction habits with cellphones, connection times, applications used, and sites consulted. This information can complement other elements when evaluating job performance.

The delivery sector can also make use of TaaS. For example, some drivers from companies already using OXIO's solution state that connectivity is superior to traditional carriers, especially when they must enter covered parking lots or areas with limited signal access.

Cost is also a critical factor in choosing TaaS. For delivery companies, it is much more efficient to deploy their own telecommunications network, in addition to the delivery people benefiting from not having to use their personal data package to connect to the application if the delivery company proposes it.

Digitization trends are emerging in the transportation industry in Latin America, so we expect to see an increase in demand for TaaS in the short term. Industrialization and urbanization are factors that contribute to this phenomenon. In addition, integration with business intelligence and the support of this technology in the cloud are the factors that will accelerate the adoption of this revolutionary connectivity model.

1INEGI. Collection of Sectoral and Regional Studies. Getting to know the Freight Transport Industry 2021