Supply chain resilience is more important than ever before. Issues such as reducing transportation and logistics costs, the rise in fuel prices, and driver shortages during a global pandemic have unquestionably driven us into a new era of logistical complexity due to following advancements in technology and customer demands.
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What issues are crucial for transportation and logistics to consider?
The pandemic has reshaped the future of logistics and compelled many enterprises to reduce shipping expenses. In doing so, firms have been forced to rely on fewer carriers or negotiate lower rates.
However, this was not a realistic solution: combining shipments impacts a company’s customer satisfaction scores because goods may arrive late or never arrive.
For instance, when clients purchase same-day delivery services through GoSend Delivery, it puts pressure on all businesses to do the same (which might not be realistic). Again, this is at the expense of consumer satisfaction.
Since the initial wave of Covid-19, it is essential to establish a contingency plan and learn from prior errors. Recognizing the history and comprehending the risks are essential starting points for forging a path forward.
Regardless of the new obstacles encountered, it is essential to use them as a learning opportunity to remain adaptable and develop agile logistics systems in the future.
So, let’s delve deeper into the top five difficulties in transportation and logistics, along with our recommendations for future improvements.
Critical challenges in transportation and logistics
To solve the logistics problems of today, the industry should focus on making transportation more environmentally friendly, making customers happier, and boosting the economy.
#1 The Difficulty in Cut Transport Costs
Liputan6 reported that most Indonesian businesses spend roughly 30% of their sales on logistics. 70% of this 30% is spent on road transport, which relies on a traditional trucking network formed partially of in-house fleets but primarily of hundreds of thousands of small trucking vendors and individual owner-operators across the country.
Since it is the highest expense for most firms (including remote ones), this problem is not going away anytime soon.
Fortunately, you can mitigate this issue by optimizing shipping routes through data analysis. By quickly managing inbound orders, meeting dock hours, and predicting traffic conditions, logistics organizations may reduce costs and ensure customer satisfaction for their brands.
#2 Rising Fuel Prices & Impact on the Economy
When fuel prices go up, consumers’ overall mood goes down, flight prices skyrocket, and of course, this has a massive effect on the logistics industry. Because of this, there will be significant delays in the supply chain as decisions are made about which trucks to fill. In fact, there’s no doubt that this will considerably affect logistics as fuel prices go up.
Even though it may seem like the logistics industry is up against it, technology is here to help us again. A logistics budget can go a lot further if shipments are combined and data is used to decide the best way to optimize routes. Remember that if you lower the mileage, you’ll end up using less gas. And that’s good for the environment as well.
#3 The Growing Need for Sustainable Logistics Operations
Another necessary (and mostly good) thing that came out of the pandemic was a push for more conscious consumption and a change in laws and rules. Consumers and businesses now want to know what kinds of brands they’re buying and how they’re helping the environment.
With this in mind, there is a need for logistics operations that are good for the environment.
To add to that, some more benefits of logistics operations that are good for the environment are:
- Companies that pollute less are more likely to get business.
- Government policies within that area work well.
- Green cars save money on gas and make a lot more money.
Now, let’s sum up what we’ve learned.
Transportation and logistics solutions for risk mitigation
Logistics players can address these obstacles by incorporating software solutions into their business processes. Let us examine how.
- Reduced mileage and transport expenses: software enables logistics firms to reduce transport expenses dramatically. Substant savings can be realized thanks to better routing, which reduces the number of driven kilometers and fuel consumption. In addition, intelligent route planning software allows transportation planners to account for and avoid toll roads. The American logistics firm PTV Group has previously adopted this concept.
- Modern software solutions reduce hazards throughout the supply chain: Logistics software enables transport businesses to track their trucks in real-time, calculate expected arrival times (ETA), and exchange position and arrival data with all parties involved in the supply chain. In doing so, the software improves supply chain transparency, planning security, and efficiency.
With the right strategy, you can prepare for the future challenges of logistics management
From reducing transportation costs to rising fuel prices, driver shortages caused by pandemics, complex regulations, and the need for more sustainable operations, the logistics business has its work cut out. However, just as being involved in a car accident without auto insurance may create literal pain, so can being unprepared in the logistics industry. And to prepare, the logistics industry must prioritize becoming as adaptable as possible through leveraging technology. Technology enables the logistics industry to minimize mileage, transportation costs, and emissions, maximize fleet and driver capacity and promote supply chain transparency and efficiency.