Study Finds Physical Operations Businesses Facing Losses, See AI as the Way to Recover
Rising costs, economic instability, and labor shortages have left leaders grappling with revenue losses and an uncertain economic outlook
Leaders are looking to AI to improve vehicle tracking, decision-making, expense planning, administrative work, fraud detection, and worker safety
SAN FRANCISCO–(BUSINESS WIRE)–Motive, the only fully unified Integrated Operations Platform for the physical economy, today announced a new study that shows companies in industries like trucking and logistics, and oil and gas experienced an average of over $1 million in losses due to economic instability, labor issues, and operational inefficiencies. The Motive Physical Economy Outlook 2024 shows that leaders in these industries are looking to AI to turn the tide against these factors
Managing physical operations is increasingly challenging due to rising costs, labor shortages, safety concerns, fraud, and outdated technology. To gain deeper insights into the challenges faced by leaders in physical operations over the past year and the opportunities that lie ahead, Motive surveyed 1,000 leaders across the physical economy such as trucking and logistics, construction, oil and gas, manufacturing, retail, and more.
“Over the past year, leaders in the physical economy grappled with rising uncertainties, escalating costs, increasing fraud, and a scarcity of skilled labor,” said 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 findings of Motive’s Physical Economy Outlook 2024 include:
Rising costs, economic instability, and labor shortages have left leaders grappling with revenue losses and an uncertain economic outlook.
- The top five 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.
Leaders lack a single, 360-degree view of their operations due to data silos and lack of integration.
- Nearly half (46%) of leaders are using more than ten 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 versus proactively managing their workers, fleet, spend, or assets and equipment. 44% of leaders admit to losing track of vehicles at least monthly.
Fraud is an invisible financial drain and leaders struggle to pinpoint its origin or extent.
- 44% of physical operations leaders say fraud has a big financial impact on their business but they 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.
Leaders see technology as one of the only aspects of their operations that they can consistently control.
- The top five 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.
From addressing labor shortages to boosting visibility and road safety, AI is becoming critically important for managing physical operations.
- The top five areas where leaders see 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 a 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.
Download Motive’s Physical Economy Outlook 2024 for deeper insights into the state of the physical economy.
Methodology
Motive conducted this research using an online survey prepared by Method Research and distributed by Cint among n=1,000 managers and higher in the United States at companies that operate commercial fleets of at least 100+ vehicles (including mixed fleet of vans, F-150s, step vans; long and short-haul trucks such as tractor-trailers, straight trucks, dump trucks, and box trucks; yellow irons such as excavators, bulldozers, backhoes, loaders, and dump trucks; and tank trucks). These business leaders have oversight into fleet management, safety/compliance/risk management, spend management (including fleet costs, fleet payments, fleet card expenses, fuel card expenses) or field service. Data was collected from August 18 to August 31, 2023.
About Motive
Motive empowers the people who run physical operations with tools to make their work safer, more productive, and more profitable. For the first time ever, safety, operations and finance teams can manage their drivers, vehicles, equipment, and fleet related spend in a single system. Motive serves more than 120,000 customers – from Fortune 500 enterprises to small businesses – across a wide range of industries, including transportation and logistics, construction, energy, field service, manufacturing, agriculture, food and beverage, retail, and the public sector. Visit gomotive.com to learn more.
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