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3 Major Challenges Facing the Logistics Industry and Measures to Tackle Them

Today, global economics and logistics play a very crucial role in catalyzing trade and by, extension, ensuring the success of the logistics industry. The logistics industry’s landscape is huge and is made of many companies with a variety of services. The shifting preferences of the consumers, the growing demands of clients, and complex business models are a few factors that pose a serious challenge to companies in the logistics industry. Similarly, it can be said that personalizing a conventionally standard service is a humongous task and a significant challenge for companies operating in the logistics industry. In this article, we have listed out some of the major challenges in the logistics industry. Also, we have suggested a few measures to help logistics managers to derive optimum results.Contact US

Logistics Industry Challenges

Trimming costs of transportation

With the increasing prices of fuel and peaking inflation indexes, the cost of transportation is increasing daily. Trimming a few corners here and there does not always help in meeting the cost-cutting goals of transportation. So, there is a need to adopt a strategic approach to reduce or eliminate bottlenecks. This can prove to be pivotal in revitalizing network designs and can help cut down transportation costs. The use of a visibility software can help in simplifying these challenges in the logistics industry.

Managing the enormous amount of information

There are a lot of figures and data flowing in on a daily basis in the logistics industry. Such data helps in ensuring the safety of the staff and fleet, cross-checking route maps, fleet loading, sanctioning fuel bills, and so on. This can be a time-consuming and tedious process, if done manually, and can take your focus off from attention to details. This challenge can be overcome by investing in an automated solution or application for fuel bills, data entries, loading and unloading ledgers. Consequently, it can help in streamlining operations in the logistics industry by offering the luxury of time to logistics managers to look at the finer nuances of operations.Get More Info

Offering customized and segmented services

In the age of globalization, logistics management has become a multi-layered job where managers are expected to track multiple supply chains simultaneously. Apart from punctuality in the delivery of goods, offering customized services to customers and suppliers in terms of pricing and packaging is also very important. Here flexibility becomes the keyword to success. Using a software system to automate the process of projecting different services to different customers can save time as well as efforts. Additionally, it can bring added accuracy to data compliance and compilation processes.

Infiniti’s Solution

Due to factors like growing competitive pressure and rising fuel cost challenges, companies in the logistics industry are forced to consistently walk the tightrope of balancing price competitiveness and delivering a consistent brand experience. This has made it necessary for aspiring logistics companies to leverage market intelligence for developing effective strategies for growth. Infiniti Research, with its expertise in offering actionable market intelligence solutions, helps businesses to understand the local competition and gain actionable insights into formulating effective growth strategies.  Our flexible deliverable formats include online platforms with relevant infographics that help understand and assess the logistics market, globally.


Are you planning to drive reliability and improve delivery standards in the logistics industry? Request a proposal now.

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Companies Laying the Groundwork for Drone Delivery

Last-mile delivery has always been a burning problem for players in the logistics industry. Added to that, rising consumer expectation hasn’t helped the cause. Consumers demand one-day or same-day shipping which can be logistically impossible or economically unviable. Even major logistics companies only offer few items to be shipped within a day. Furthermore, delivering goods via road poses many uncertainties including the unavailability of drivers and uncertain traffic and road conditions. So how can logistics companies effectively tackle such problems? One area such logistics companies are exploring is the viability of drone delivery. Drone delivery can efficiently solve the everlasting last-mile delivery problem. Additionally, the ability to operate autonomously saves companies personnel costs along with fuel costs. Although such companies are currently bound because of regulatory hurdles,IR_Brochure governments are looking at provisional measures to make drone delivery a reality.

Amazon Prime Air

Amazon CEO Jeff Bezos revealed plans for Amazon Prime Air in the year 2013 and completed drone delivery after three years in 2016 by delivering a parcel to Cambridge, England. To implement full-scale delivery, the company plans to use miniature UAVs which will be able to carry loads of less than five pounds and deliver within 30 minutes to locations that are within the 16km radius of an Amazon fulfillment center. The company is planning to roll-out the service on a small-scale depending on country’s regulatory rules. Currently, the most significant challenge facing Amazon Prime Air is its ability to successfully navigate more tricky urban environment to successfully deliver the package. Once they figure out a solution using AI and get regulatory approvals, drone delivery would become a reality.

Domino’s Pizza

Domino’s Pizza is testing the possibility of delivering a pizza by drone. They successfully performed a drone pizza delivery in New Zealand by partnering with drone delivery service startup Flirtey. Such delivery option will allow the food giant to reach more rural customers and improve delivery times in congested environments. Domino’s Group CEO advocated for drone delivery system stating that it doesn’t make economic sense to deliver a two-kilogram order on a two-ton machine. With the advancements in artificial intelligence systems, drone delivery can be the perfect option for delivering food to the consumers quickly and efficiently. Their current drones can deliver pizzas within 10 minutes to any location within a 1.5km radius of a Domino’s Pizza chain.

Ukrainian Postal Service

In 2016, Ukrainian Postal Service teamed up with Flytrex Aviation to begin testing drone delivery service in Ukranian cities. The drone, named Mule, is capable of carrying loads of up to 3kg to a distance of 23km. The drone can travel at a maximum speed of 70km/h, reducing the delivery time to a mere 30 minutes. The logistics company has deployed a unique release mechanism in the drone to avoid parcels being stolen or tampered. The drone uses a battery instead of fuel and saves a lot of cost in terms of maintenance and fleet management.

Mercedes

Mercedes-Benz recently unveiled the Vision Van, which employs two drones capable of delivering packages of up to five pounds within a radius of six miles. The company partnered with drone startup company Matternet to develop the Vision Van. The Vision Van would enable the company to increase its productivity up to 50% in last-mile delivery service. The mini aircraft has already successfully delivered more than 100 packages within Zurich, Switzerland. The company has invested about $597 million in an effort to speed delivery times for online orders.

Workhorse

Workhorse is an American electric mobility solution provider that developed Horsefly, an autonomous drone delivery system. The device is able to carry a 10-pound package for about 30 minutes flying at a speed of up to 50mph. It can deliver packages at a meager cost of $0.01 per mile in electricity costs. The company claims the drone to work even in rain and snow, but wouldn’t handle high winds particularly well. The company is looking for an ingenious solution to overcome US regulatory rules that demand drones to stay within line-of-sight by mating the technology with its electric delivery trucks.

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Infiniti’s Industry Risk Assessment Helps a Leading Transport Company Enhance their Service Offerings

Industry: Transportation ,  Specialized area of engagement: Industry risk assessment

Globally, the transportation industry is marked by the presence of numerous competitors offering freight transportation services through road, rail, and marine modes. Among the different modes of transportation, road transport is the most common. In terms of revenue, North America accounts for a majority share of the total GDP revenue in the market. Although the transportation industry is witnessing promising growth, certain factors may hinder the growth of the sector.

  • Terrorism: With the increasing instances of terrorist attacks across the globe, commuting has become a major concern for the passengers. Also, with the rising frequency of attacks in public places, the US authorities have issued warnings of possible threat attacks on ground transportation modes such as railways and railroad trains. This will likely affect the growth of the sector in the long run.
  • The slowdown of global trade practices: With the recent economic volatility and the Brexit issue, trade practices between the European countries have been greatly affected. Since the transportation companies greatly rely on trade practices for the effective movement of goods from one place to another, this fluctuation in the economy is likely to affect the growth of the industry.
  • Stringent government regulations: Regulations in the transportation space vary significantly, and governments across the globe have been seeking effective ways to formulate an effective transportation policy. Due to the implementation of stringent government policies and regulations, the transport companies are facing relentless pressures to meet the transportation demands across the globe.

To understand the relative risks and efficiently streamline their processes, leading transport companies are leveraging industry risk assessment solutions. Industry risk assessment involves gaining a comprehensive and accurate understanding of the potential risks faced by the transport companies and effectively segmenting their risks based on priorities. An efficient risk assessment solution can further help transport companies to assess the competitors and their offerings and help determine potential sectors for expansion.

The Business Challenge

A leading transport company with numerous service offerings wanted to identify and profile the key competitors and profile the potential bottlenecks to offer seamless transportation services. The client wanted to develop a new strategy to manage the potential risks affecting the transportation industry and develop appropriate policies and organizational structure to achieve their strategic aims. The primary concern of the client was to analyze the risk factors in terms of financial risks, including interest rates, foreign exchange rates, and stock prices, and losses resulting from fluctuations in the interest rates. Moreover, the client was concerned about the cost of investments and wanted to streamline their processes to boost efficiency.

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The Journey

To identify, measure, and monitor risks affecting transport companies, Infiniti’s risk assessment experts carried out extensive research comprising interviews and discussions with leading stakeholders in the transport companies space. Furthermore, to assess the complexity of the risks, the client also compiled information from various secondary resources such as paid industry databases, company presentations, and industry forums in the transport companies space.

The Solution and the Business Impact

The industry risk assessment solution offered by Infiniti helped the client identify and analyze the potential factors impeding the market’s growth. The engagement also focused on profiling the key transport companies, their product offerings, and effective ways to reduce bottlenecks and sustain their service offerings. With years of expertise in offering a plethora of services for numerous Fortune 500 companies, the solution offered by Infiniti also focused on creating a robust risk management plan to curtail the associated risks involved in entering niche market segments.

Additional Benefits Offered by Infiniti Include:

  • Identified the potential opportunities and determined potential factors for expansion
  • Analyzed the size of the business and segmented the risk differences based on their severity

A must-read case study for strategy specialists and decision makers looking to develop an understanding of the factors affecting transport companies

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