What does eta mean?

An image showing two men waiting around a clock with various forms of transportation around them.

A quick guide to a crucial term

ETA is a term shared by a great variety of industries—some niche, and others part of our daily routine. If you’ve ever worked in the logistics sector, waited for some form of public transport, or even ordered something online, odds are you’ve come across the term. It is one of the most popular acronyms that not only emerges in casual text exchanges, but also in everyday life.

But what does it mean, why is it important, and how do companies use it nowadays?

What is ETA short for?

ETA is short for “estimated time of arrival” and refers to the expected moment a given vehicle or set of goods will get to a precise location. At its core, it is a prediction based on existing data that considers past trends and foreshadows potential disruptions.

“ETA is short for ‘estimated time of arrival'”

Which industries use ETAs?

In everyday life, the most common use is in public transportation, where ETA is used to indicate the time before a new vehicle arrives (be it the metro, a bus, or other forms of transit). Usually, this would take into account some known constants, such as the speed of public transport and the distance between stations, while also accounting for unexpected events like unforeseen traffic or disruptive weather conditions. 

But the use of ETAs goes far beyond public transport. Perhaps the most important use of the term is in the logistics industry, where millions (even billions) of goods are transported every year impacting every company imaginable. In the United States alone, for instance, it is estimated that over 12.5 billion tons of goods—equivalent to 14.5 trillion USD—were transported in 2020 alone be it through trucks, rail, ships, or planes. That implies that most industries in the country—as well as the rest of the world—were reliant, at least to some degree, on the transportation of a product and, by extension, on ETAs.

U.S. Shipments by Mode of Transportation

A pie chart showing the share of US shipments by the form of transportation used.
(Data from U.S. Census Bureau)

Thus, ETAs are crucial to many industries around the world, be it those focused on transportation directly, or those that rely on the goods being transported. They are an integrated part of supply chains, giving companies expected times upon which they prepare their desired production. If ETAs are mistaken by considerable margins, they will likely cause meaningful disruptions further down the line. So, providing the most accurate ETAs possible becomes crucial to the functioning of modern economies and societies as a whole.

A colorful image showing various elements related to calculating an expected time of arrival (ETA) including planes, cats, clocks, and phones

Why is my ETA wrong?

There are a great variety of reasons that can explain why a company or service could make a mistake in their initial ETAs. The world is full of complexities all of which could affect the arrival of a given product. An initial but not exhaustive list of explanations for incorrect ETAs could include:

  • Unforeseen weather events
  • Political instability
  • Shifts in global tariffs
  • Mistakes in registration for customs
  • Financial problems with any of the involved parties
  • Human errors

Given the complexity of processes surrounding global supply chains, it is no surprise that, quite often, the errors above tend to occur. Disruptions are not an exception, but rather the norm for those working in the world of logistics. If we look at the recent history of humanity, we will find terrorist attacks, international wars, and global pandemics all disrupting the flow of goods internationally. As such, McKinsey & co has gone as far as estimating that in the coming years, most major sectors could lose up to 42% of a year’s earnings from unforeseen disruptions (although the numbers vary significantly from 66.8% in the aerospace industry, to 24% in pharmaceuticals). Understanding when products will get to a given destination and how many disruptions will occur in the process could save millions of dollars in revenue.

Net present value (NPV) of expected losses over 10 years

A bar graph showing the % of annual EBITDA lost in key industries to supply chain disruptions according to McKinsey & Co.
(Data from McKinsey & Co)

“ETA is not just an acronym, or a letter in the Greek alphabet. It is a crucial part of global supply chains”

An image of a truck sorrunded by various clocks and vehicles.

How Auba is revolutionizing ETAs

If we want to build more resilient supply chains, we must also understand disruptions and predict, with great precision, when a product will arrive at its destination. At Auba, we are on a mission to predict supply chain delays and disruptions before they have a financial impact and allowing companies to plan in advance, respond to external shocks, and create a shared trust with producers or transportation providers. We, as a company, strive to create the most accurate ETAs available in the industry.

To do this, we work together with clients to understand the structure of their supply chains and, with minimum effort, extract information from a variety of documents as well as other data sources. Afterwards, we apply machine learning techniques  to the information to calculate accurate ETAs regardless of distance or the mode of transportation employed. 

Disruptions are inevitable, our job is to predict them and, in turn, deliver the most accurate ETA possible.

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