Few industries have as much impact as logistics. In a way, it keeps the world economy going. Manufacturers, retailers, farmers, and service providers depend on it. But even though it plays a significant part, there are still plenty of logistics challenges facing the industry. Today, we’re talking about five of the biggest ones.
- Cutting Transportation Costs
We can safely say that this is the single biggest problem in the industry at the moment. In some cases, the transportation costs reach 50% of the product’s value. Still, the demand for shipping companies is rising almost as fast as the fuel price. There’s plenty of work, but it seems that there’s not enough money to go around for everyone.
Many retailers and distributors are choosing to let just one or two shipping companies take care of their complete transport. Their reasoning is simple — if you’re shipping more with one carrier, you can get better rates. And while all that is true, you have to trust one company with your entire stock. Imagine what you’d have to go through if there’s a week’s delay.
- Meeting Consumer Expectations for Visibility
Due to companies like Amazon and Walmart, customers nowadays want to know where their shipment is at any given moment, as well as when they can expect it to arrive. Things aren’t much different if we’re talking about transport visibility in B2B. As a matter of fact, the problem is even more complex.
To meet all of their demands, you need to improve the visibility across your entire supply chain. You should be able to track each of your shipments and maintain constant communication with the drivers. However, you also need a real-time alerts and notifications system. It allows fleet managers and drivers to make prompt decisions if any issues occur.
- The Shortage of the Drivers
The next logistics challenge facing the industry that we want to talk about is driver shortages. These are demanding jobs, and it seems that at the moment, there just aren’t enough drivers to fulfill the needs of the industry. There are also these government regulations that force companies to be more strict about hiring their drivers.
Hence, the recruiting process is long and expensive, and it’ll stay like that for a while. There’s not much you can do but follow the rules. On the other hand, you can optimize the routes your drivers are following and stretch the capacity that way. It’ll give you at least some leverage.
- Getting Sustainable
Carbon emission reduction is more important today than it ever was. The public wants to see environmentally-friendly practices in the private sector, so governments have to push it.
Although this isn’t bad on its own, it’s putting a lot of stress on logistics companies. And if you’re at the front of one, you must act quickly, but luckily there are plenty of things you can do to make your logistics more sustainable:
- Adopt route and load optimization
- Upgrade your engines
- Track and report emissions
- Use alternative fuels
Going down these paths won’t be cheap, but it’ll pay off in multiple ways.
- Adopting New Technologies
As we already mentioned, logistics companies already need to start adopting new and innovative technology solutions. They help you increase productivity and reduce costs in the long run. And we’re already at the stage when things like warehouse management systems are becoming non-negotiable.
However, with so many options available, it’s hard to pick the right one. Don’t rush it, and consider all your unique business operations before you make a decision.
Finally, you can’t be sure what to expect regarding logistic challenges in the industry. And with that in mind, making your processes as flexible as they can be is the best way to go.
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