Dodging Challenges in Transportation and Logistics

Dec 5, 2019

The transportation sector is struggling to enhance its economic profit. As such it is critical for companies in the transportation and logistics sector to make tougher and astute strategic decisions than ever before. Despite the constant upheavals in the market, several trends in transportation and logistics will create unprecedented opportunities for players in the sector to venture into new markets and re-engineer their existing business models. Based on our transportation industry analysis, to design and implement strategies to overcome key roadblocks in transportation and logistics, senior executives of companies should ensure their strategies incorporate some of the below-mentioned imperatives.

transportation and logistics

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Focus on digital transformation

Most stakeholders in any industry including customers and competitors are increasingly inclined towards digitally enabled change. Transforming key challenges into opportunities will require companies in the transportation and logistics sector to define a digital strategy that is tailored to the value drivers of their organization. They can start by building on the company’s current product portfolio, customer relationships, and other assets. This will encompass defining and executing objectives that digitize core processes, reinforce the business model, and venture into new frontiers.

Agility in resource allocation

Flexibility in resource allocation makes It possible for transportation and logistics companies to gain higher TRS. As the sector is largely asset-intensive, it becomes necessary to make huge strategic bets. It is no longer effective to make strategic decisions based on the previous year’s data. Strategic decision-makers can unlock the benefits of agility in the transportation and logistics sector by overcoming common barriers that hinder flexible resource reallocation such as a lack of intent, an inadequate process, or the absence of the right skills and mindsets.

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Consider M&A opportunities

The transportation and logistics industry currently has excess cash and debt-raising capacity. This means that several transportation and logistics companies stand to benefit from M&A opportunities. Rather than focusing on gaining the “big deal” players in the sector will be required to develop a programmatic capability to spot and execute attractive targets for acquisition. In addition, companies must continue to use alliances to access new markets and capabilities in a cost-effective manner.

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