Over the past few years, the logistics and distribution industry has been facing a plethora of issues, and 2016 statistics are not good either. In this article, I will discuss the top challenges facing business people in this industry, and some possible mitigation strategies.
Here is the countdown of the top 7 common problems in the logistics and distribution industry.
1. Rising Costs
Do not trivialize any of these issues, but it’s true that the logistics and distribution industry is adversely affected by the rising fuel cost, infrastructures, carrier pricing, capacity shortage, inappropriate infrastructure, and more.
2. Treatment of Drivers
When salary enters into driver’s treatment, it becomes clear that their lifestyle needs are keeping the drivers away from pursuing their career as truck drivers – even with pay rises, more and more truck drivers are quitting their jobs. It is upon receivers and shippers to ease the pain. They should make the facilities more welcoming to their truck drivers. For example, some DCs lack adequate infrastructure for pets and women – taking care of these small things adds the work conditions welcoming to drivers. You should know that minor expenditures yield a major result.
3. Air travel
The air travel in the first class is ugly, and it will live that way until the airlines fly domestically. Fees and fares have increased while comfort, seat availability and service deteriorate.
4. Use of boxcars
As truckers’ challenges increase and rail service improves companies will start looking fifty years back and begin shipping goods in boxcars. This won’t be seen as a good step towards the right direction, faster, better equipment and more efficient service can make the rail an alternative to trucks – so, managers of logistics and distribution firms should be serious considering railways and boxcars, weigh the relative benefits and decide which way to go.
5. Pricing options
Pricing options have become one of the most common problems in the logistics and distribution industry. As transportation fee continue to rise, many companies will stop being Six Sigma suppliers. They will start offering slower and cheap shipping options to their customers who do not require premium service. Remember not everyone wants second-day or overnight delivery.
6. Alternative fuels
Many motor carriers have had good results with the natural gas, and I don’t think there is a reason to assume that the experiments will end very soon.
7. Freight bill payment
Over the last fifty years, freight audit and payment companies have given valuable support to the logistics and distribution industry. However, the now mushrooming growth of transportation management software with freight bill audit and payment capabilities is taking a huge bit off that business. Logistics companies in the freight bill payment niche definitely need to widen their horizons and search for creative ways to differentiate their services and remain relevant.
Also, a lot of trucking companies are having a hard time collecting payments from their customers – one reason they don’t enough money to fund services for other customers. With this issue, Trucking Factoring would be of great help.
