Logistics service providers (LSPs) like any other kind of business must contend with external factors, such as rising fuel costs, supply & demand disruptions, economic uncertainty and even natural disasters. While these are of course long term inevitabilities, the unpredictability of when and where they will actually occur makes them nonetheless disruptive to efficiency and profitability. These things of course also affect the customers of LSPs. In turn, they look for solutions to their logistics needs that are not only affordable, but help them remain competitive against their own direct competitors.
It is therefore crucial for LSPs to ensure every point of their business processes are tuned to extract the maximum amount of value from the actions they perform. This requires LSPs, as the adage goes, to work smarter not harder.
So what does ‘smart’ mean? Put simply - it is to focus your efforts where you can make the most difference. Even small changes can bring big savings and prepare your business to ride out the external shocks you cannot evade. Savings made in one part of the process don’t just contribute to better profitability overall, they help absorb the financial strain caused by unavoidable shocks to other parts of the system.
Sustainability initiatives whether government or industry-lead are good way to put efficiency at the core of the way your business thinks. Competitors who attempt to match this with short-term, narrow-scope “efficiency-drives” will not make the same productivity gains or be able to consistently offer the same value to potential
Participating in government or industry efforts to improve efficiency can be a good way to put your business on a sustainable track and keep it there. The US Environmental Protection Agency’s SmartWay program for example, intended as an emissions control program comprises a set of initiatives to incentivize emissions reductions and provide technical and financial assistance to transport operators.
Crucial to any such effort is ensuring your technological infrastructure is up to supporting it. The visibility, data flow and process optimization that can be achieved with an integrated industry-specific technology platform gives you the accurate and instantaneous information that creates competitive efficiency. This not only helps with participation in energy saving schemes, it also facilitates closer working relationships with partners and customers. This enables you to plan better together, cut out arduous resource intensive administrative tasks and identify where you can implement time and cost saving efficiencies.
Information technology is essential for logistics intelligence. Communication and data messaging give businesses a common platform to capture, share and report on shipment information and history. The latest logistics software uses “cloud computing” solutions through web-native architecture, optimizing the entire logistics process.
Partners and suppliers can exchange information to lower costs and share shipment status with carriers and trading partners to ensure that everyone has one version of the truth in real time.
Comprehensive electronic shipment scheduling and tracking affords maximum flexibility so that energy consumptions are minimized, saving fuel, resources and time.
For many years, challenges such as uneven technological development across different areas of the globe and security concerns have held back the logistics industry from fully embracing electronic processing of documents. This, however, is changing in response to the demands of a more difficult operating environment. Despite plummeting freight volumes in some markets over the past several years, the pressure to reduce operating costs and do more in less time has persisted. Coinciding with the arrival of digital connectivity in even the most underdeveloped economies, the writing is on wall for paper-based systems.
The International Air Transport Association (IATA) e-freight initiative is expected to save the airfreight industry as much as US$ 5 billion annually in document processing cost and efficiency gains. Figures such as this, even if they were shown to be on the optimistic side, demonstrate the amount of money that can be lost to inefficiency. In an industry which relies on the flow of a huge volume of documentation, serious benefits can be achieved by eliminating all inefficiencies from the handling of that flow. For LSPs this is precisely the area where working the hardest will make the most difference.
Marc Borczon is Business Development Executive Americas for CargoWise®
Media Contact: Lisa Tree, firstname.lastname@example.org