It’s now almost impossible to picture a world without shipping and logistics challenges. But moving goods around the globe has often been fraught with problems. So what’s different in 2021?
The biggest difference is that post-pandemic shipping of supplies faces an economically challenging climate. Of course, with logistics embracing a vast network of contacts, firms, and technology, the industry is always complicated. But many logistics businesses are coming face to face with new issues in 2021.
So, in this article, we first of all address the issue in general, for any business. And then, secondly, think about a company that specializes in logistics.
Three Big Shipping and Logistics Challenges in 2021
Challenges the industry faces include:
Challenge 1: Demand and Supply Costs
Fluctuations in global demand and supply have affected the amount of transport available. Demand post Covid is once more huge. But it now outstrips the availability of ships and containers. This, in turn, has pushed costs up. They’ve skyrocketed this year.
Companies face the challenge of ensuring effective use of space available, and considering alternative arrangements with co-partners, to guard against the delays and cancellations that have become more common.
Challenge 2: Timely Delivery
After demand and supply problems, delivery times are one of the biggest challenges that logistics companies face. Timely delivery is entirely dependent on shipments. Therefore, delays that occur within the extensive network of shipments will affect deliveries.
When thinking of deliveries, it helps to remember that at the end of the supply chain is a customer. And customers make buying decisions based on how they perceive reliability and trustworthiness of the company they’re considering purchasing from.
Companies are therefore under pressure from both manufacturers and stores to provide transparency and visibility in their shipping service. Advanced technological solutions are a possible answer. But that comes with cost implications.
Challenge 3: Risk of Loss, Damage, and Theft
In addition to supply and demand problems, and ensuring timely delivery, shipping and logistics companies face growing security issues in 2021. Loss, theft, and tampering have become problems along the shipping chain.
This is made worse by the sheer number of parties involved in the shipment before it reaches its destination. It’s become a serious risk factor. So, shipping and logistics companies are having to address risk more in 2021 than ever before. An added risk is the usual damage that happens to the cargo, arising from mishandling.
These incidents bring costs that are less than ideal in a challenging economic climate.
Addressing your Shipping and Logistics Challenges in 2021
Use a Transport Management System
The three challenges above can all be met by using a Transport Management System (TMS) that is appropriate to the size and needs of your business.
At the very least, an automated TMS eliminates manual error. A fully fledged one integrates carrier networks with real-time visibility solutions, and digital brokers, according to Gartner.
In addition, the software can help you locate containers and carriers, use them effectively – perhaps by co-partnering – and keep costs down in the current market.
You will keep costs down, too, by using the TMS to help you discover where there are safety issues. It will immediately alert you to unauthorized opening of packages or parcels. In other words, whenever anyone tampers with your freight before it reaches its destination.
The same tracking system will also identify bottlenecks, pinch points, and ineffective areas in your supply chains and delivery networks. Once you’re aware of the exact problem, you can begin to make positive changes.
Overall, when you have this granular data on all the above issues, you’ll be able to nip them in the bud. This prevents larger problems down the line. Data is key here. It helps you react in a more agile way to challenges.
If You Run a Shipping and Logistics Business, We Suggest 3 Other Solutions This Year
1 Improve Your Routing and Choose Suppliers with Care
Get to know your suppliers and carriers. But it’s also a good idea to diversify your shipping suppliers and routes. In an era of growing political unrest, it’s a risk too far to rely on one source, one carrier, and one route.
Even for domestic shipping and logistics, there’s a lower risk when you diversify all aspects of your logistics this year. By minimizing risk, you also reduce costs and increase your ROI.
2 Ensure You’re Paid Out for Insurance Claims
Insurance claims happen. So, when things go wrong, get direct access to data and evidence. With these to hand, you’ll win your claim in any damage disputes. Your software partner will enable you to do this efficiently and effectively.
3 Make Your Competition Irrelevant
Ensure your customer knows the location, condition, and security of their cargo and parcels every step of the way. This adds value to the service you’re offering. By giving a superior level of transparency, you’ll maintain your competitive edge.
What Are Best Practices for Overcoming Shipping and Logistics Challenges?
- Find a complete platform offering a wide range of logistics solutions.
- Ensure this is tailored to your specific logistics needs for the overall improvement of efficiencies.
- Ensure you have full access to comprehensive solutions.
- Get control and reduce the cost of your shipments.
- Tailor solutions for your unique shipment-type needs.
- These should include even the most complex requirements.
- Get support from a team of professional logistics experts.
- Find a solution to overcome logistics barriers.
- Your logistics company needs to have partnerships so that you’ll enjoy a broad portfolio of services.
- You need to be guaranteed the best transportation options at the best rates.
- Ensure your logistics company is a customer-centric operation, offering the full transparency of a tracking service. Happy customers come back for repeated good service.
- Be well prepared for instability of world economics that could cause fluctuations.
Other Factors Affecting Your Shipping and Logistics Business Include:
Compliance and regulations: You must get these updated regularly for specific territories. But compliance is a challenge for logistics companies. Sometimes it’s best left to third parties to manage the necessary paperwork.
Strikes: Employees who down tools cause unplanned delays. These, in turn, affect your deliveries and your customers.
Management: Control of logistics from one end to the other is complex. It involves multiple communications, tracking, decision-making, and perfect synchronizing at all stages. If any of these breaks down, there is significant impact on transport of goods. Management needs to be alert.
In Conclusion… Are Your Customers Happy With Your Service?
Consider all the challenges and the solutions we suggest above to ensure the highest level of service and customer satisfaction.
Doing this will offer the kind of excellent service both your customers and their customers deserve in 2021.
Let us help you with customer satisfaction and support. We take pride in all aspects of our business and have 25+ years’ experience in offering first-class supply chain and logistics transparency.