Dealing with the logistics side of the business has always been a challenge. Right from shipping to delivery, maintenance of stock & inventory, to everything in between requires precision, planning, operations, and manpower. In addition to these, businesses have faced a lot of new logistics challenges in the past two years because of the covid-19 pandemic. Following covid-19 protocols, a surge in demand and disruption in the global supply chain led to port congestion proving that in 2022, there are some huge challenges to overcome in both the domestic and international logistics industry. Also, there is a big shift towards the digital freight logistics industry recently and is only growing.
Some of the old challenges have grown into bigger ones and some new have emerged due to global political and geographical reasons. Let’s take a look at all of them and see the possible solutions to surpass them.
Sky-Rocketing Demands
In 2020, the pandemic forced lockdowns across the world depriving people of experiences. This resulted in a surge of materialistic demands, making it one of the major logistics challenges. With the rise of e-commerce and no-contact deliveries, a sudden increase in shipment demands added pressure to the logistics companies. In 2021, the availability of vaccines opened up the world again but for international logistics to make up for the losses and come back to pre-covid profits was still a far-fetched dream. The disruptions in the supply chain, labor shortages and rising costs have all increased because of high demands.
Overcoming Rising Demands in the Logistics Industry
From a business perspective, this is an opportunity to make for the losses during the pandemic. It is time to incorporate solutions that will help reduce other costs while efficiently managing the rise in demands. Looking out for technological solutions ideated by digital freight logistics to cut costs and speed up processes can streamline the supply chain, resulting in better management of the rising demands. Digital freight forwarding companies are already emerging as a solution to several logistics challenges.
Shortage of Labor
The pandemic has made everyone more cautious about their health and safety. This has led to highly understaffed companies with heavily overworked employees. Delays in loading and unloading, and untimely deliveries have become one of the common challenges for logistics. The lack of trained labor is causing a serious disturbance that needs to be overcome with effective long-term solutions.
Possible Solution–From Lack to Fulfillment of Labor Shortages
Recruiting new labor, training them and retaining the current workers can fulfill the current requirements. Offering competitive salaries, following covid protocol to provide a safe working environment and balancing out work pressure are a few areas where freight forwarders can improve greatly. It has been easier for Digital Freight Forwarders to combat this logistical challenge because of intuitive software solutions that have replaced manual processes. This has also helped in reducing overall expenses.
Rising Costs of Transportation
Everything manufactured needs to be shipped to its end users whether by land, air or water. From daily use items to industry-specific supplies, everything needs fuel to be transported to its destination. Fuel being a non-renewable resource is high-priced. The ongoing Ukraine-Russia war has caused a surge in crude oil prices further increasing the cost of fuel required by the logistics industry. The next big expense of transportation is that of skilled drivers. Getting truck drivers with higher paychecks might make up for labor shortage, but needs a strategy to avoid a rise in transportation costs. Packaging costs are the third logistics challenge contributing to the rising transportation costs because the products must remain undamaged and good freight forwarders make sure not to compromise on that.
Possible solution–To Reduce Transportation Costs
While political factors can neither be predicted nor controlled in any way, we must look for solutions that can be accommodated in such critical situations. Making sure the transport vessels and trucks are loaded to their full capacity will reduce the fuel cost per trip as well as deal with the labor shortage and overworking issue. Another way to manage transportation costs is to plan the travel routes effectively to reduce the overall fuel usage. Looking for environmentally friendly, reusable packaging alternatives and making sure unnecessary packaging is avoided can further help in managing the costs incurred in transporting goods. Again, experienced digital freight forwarders with years of hands-on experience can help cut down on these costs.
Meeting Consumer Expectations
With faster deliveries by e-commerce giants, consumer expectations have increased manifold in terms of delivery time. Planning and managing systems at all stages of shipping is an absolute must to meet these expectations. Shippers and carriers need better integration that sometimes lags due to traditional freight brokers, which is yet another logistics challenge that needs to be addressed. Traditional approaches when handling complex data usually result in delayed processes and there is always a scope of manual errors. Any such discrepancies result in delayed deliveries and degrade the overall consumer experience for both B2B and B2C consumers.
Possible Solution-Improving Consumer Experience
Making processes that streamline the entire supply chain can be the first step to improving the consumer experience. Using technology to collect, store and analyze shipping data will reduce the time and scope of errors in the process. Digital freight brokerage systems can further reduce the cost and time involved in the process of finding carriers and shipping products. This can also prove to be cost-efficient. Timely checks on loopholes in the supply chain should be a regular practice to keep everything aligned with the promised delivery dates. An integrated system involving all parties can be put in place to keep track at every step allowing real-time tracking.
Everchanging Government Guidelines
The pandemic has influenced trade policies across the globe. Mask mandates, vaccine mandates and social distancing norms came along with it. Global climatic conditions have been deteriorating and hence governments are issuing stringent compliance measures, adding to logistics challenges. It is high time the logistic industry finds ways to sustain such guidelines.
Possible Solution–Coping with Government Compliances
Apart from staying updated with the latest rules and guidelines, it is important to make changes in the current system in terms of sustainability. One way to do it can be by digitizing processes to move to a paperless ecosystem. Digital freight platforms can come into place to help make this move. Better planning to reduce fuel consumption, packaging wastage and route planning can further help in becoming a more environmentally friendly logistics company.
Understanding these probable logistics challenges and solutions related to logistics companies around the world, it is evident that the future of logistics will be driven by
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