Top 8 Logistics Challenges Facing the Industry
These days you have more challenges than just trying to keep trucks full; you have your hands full of business process needs that can often feel like too much to handle.
According to a third-party logistics study by Capgemini, "cutting transportation costs" makes the top of the list as far as concerns for the logistics industry. Some other obvious pain points make the list as well, but perhaps the most important—and at times, challenging—concern is the need for greater innovations and technology advances while remaining budget conscious.
Here is a snapshot into eight of the top challenges facing
- Fuel Costs. One of the highest costs contributing to the "cutting transportation costs" concern is fuel prices. Higher fuel prices are likely to increase transportation costs for U.S. shippers this year by pushing up fuel surcharges. Rising U.S. diesel fuel prices are escalating surcharges added to freight rates, which is reversing a two-year trend that cut into the revenue and earnings of truckers as fuel prices plummeted.
- Business Process Improvement. Notwithstanding the need for new technology, which we discuss in number eight on this list, it has become an increasing challenge for the logistics industry to stay on top of new advances in business processes. Taking advantage of these new opportunities sounds enticing, but adoption and onboarding can be overwhelming.
- Improved Customer Service. Customers want full transparency into where their delivery is at all times. These days, the location of a package is as interconnected as your social network. In fact, as customer expectations have increased, their willingness to pay for fast shipping has decreased, with just about 64 percent of consumers unwilling to pay anything extra for less than two-day shipping.
- Economy. With high fuel prices comes a greater credit crisis and rising inflationary demands that take a greater toll on the U.S. economy. This industry is then pressured by increasing compliance regulations, declining demand, and additional capacity with additional increases in key cost centers.
- Driver Shortage & Retention. Hiring and retention remain an issue despite the lower demand mentioned above.
- Government Regulations. Carriers face significant compliance regulations imposed by federal, state, and local authorities.
- Environmental Issues. The anti-idling and other emission reduction regulations brought about by state and local governments has created concern that the compliance costs could exceed benefits.
- Technology Strategy & Implementation. While the industry understands and supports many of the benefits of these technologies, some questions remain as to how they will pay for it and who will help implement the improvements.
We understand how difficult it can be to manage these concerns. Outsourcing all or a portion of your freight and business processes can often provide the required expertise, people, capacity, and IT systems needed to help reduce expenses, improve visibility into the supply chain, effectively manage the supply chain, and achieve greater regulatory compliance. DDC FPO offers the right solutions to help lighten your load. From Billing and Rate Auditing to IT Outsourcing and POD Processing, DDC FPO is here for you.
Consider alleviating your concerns by leveraging DDC FPO for all of your back office outsourcing needs. Contact a DDC Team Member TODAY at www.ddcfpo.com.