Top 7 Logistics Challenges Facing the Industry
Few industries have as much impact as logistics. In a way, it keeps the world economy going. Manufacturers, retailers, farmers, and even service providers all 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 the seven of the biggest ones.
Now, there are numerous reasons why things got so tough in the last couple of years. Consumers’ expectations are shifting, and technology advances and new regulations are constantly coming out. On top of that, the COVID-19 pandemic didn’t make it easier.
Of course, all these issues bring an opportunity for growth and improvement. If you can find a way to overcome the challenges, you can be sure that you’ll capitalize on that. Here’s what you should pay attention to in the following year.
1. 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 come to reach 50% of the value of the product. 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.
2. 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. And 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.
3. The Shortage of the Drivers
The next of the logistics challenges 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 into being 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.
4. 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 any of these paths won’t be cheap, but it’ll pay off in multiple ways.
5. Improving Cooperation With Your Partners and Suppliers
If you want your transport and logistics company to be successful, you must talk to your partners and suppliers and get to agreements that benefit all of you. They must be satisfied with your service, and you must be happy with theirs. It sounds like common sense, but at the end of 2021, we feel like we need to stress it.
You should all understand the state of the market and the moment and get on the same page. If you support and help each other now, many new improvement opportunities will open up in the future.
6. 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.
7. Grappling With the New Way of Doing Business
It’s clear to all of us that the COVID-19 pandemic brought plenty of challenges to the game. However, some of them are here to stay, and some we didn’t even see yet. Changes are happening all across the industry, and it’s difficult to predict what will be the next big thing.
So, we’ll say that the final of the logistic challenges facing the industry is that you can’t be sure what to expect. And with that in mind, making your processes as flexible as they can be is the best way to go.
Harper Mullins is a logistics specialist and a passionate freelance writer. At the moment, he’s working with Fit 2 Move on improving their storage and transport capabilities. He uses his free time to read every book he can get his hands on.