5 Ways to Slash Costs and Save Time in Your Logistics Business
Are you struggling to find a way to accelerate your logistics company? Still looking for a solution to reduce costs and save time in your everyday supply chain management? You’re not alone! Discover five areas where you can get rid of old habits, win back your precious time, and find the Holy Grail of cost reduction.
We’re living in times when almost every industry is facing digitalization and improving its performance by implementing the technology. It’s no different with the logistics and supply chain universe.
Considering the explosion of e-commerce, and the global revenue coming from transportation and logistics (T&L) estimated at a level of $5.1 trillion, and plenty of new business processes, the industry is approaching a revolutionary, technological change.
However, there is an entire army of small and middle-sized logistics companies that still have a long way to catch up.
They drown in a spreadsheet and paperwork swamp, still losing a significant amount of time and money on manual, repetitive work.
So, if you are a business manager in a logistics company, who wants to get back on the right track, then take a closer look at five areas you can improve your results.
Let’s dive in:
1. Free cargo space and vehicle management – plan it smart
The first idea is about making your truck drivers’ work as efficient as possible. As a manager in charge of coordinating the whole lot, you need to optimize their routes when it comes to the weather, road traffic, and possible accidents.
The time of delivery is at stake here. A heavy rain, a storm, a snow flurry? You know it too well – bad weather conditions can at least slow down a driver. In the worst-case scenario, it can make the delivery impossible at all. The same goes for traffic jams or car accidents.
But that’s not all:
Constant monitoring of freight exchanges
It takes a lot of manual work (and time) to monitor what’s happening on freight exchanges continuously. With a few T&L severe players in the business and their intense transportation activity, it’s hard to be always up to date.
The problem is that employees responsible for checking freight on the exchanges’ platforms, and the free cargo space on the company’s vehicles, are not able to physically monitor the situationand to react in real-time when something comes up.
Yes, allowing technology to take care of the duties that you and your employees can’t deliver anyway, is the only way to manage both: coordinating the routes of your trucks, and to efficiently react to any changes in freight exchanges.
It’s all in the magic word: automation. With Hublock logistics software, you can automate your logistics processes.
When it comes to vehicle and inventory management, the system will count how much free cargo space you will have on each vehicle, and what kind of freight your drivers can collect along the way.
Moreover, this logistics management software can be integrated with freight exchanges, so it will automatically monitor any new freight opportunities. It makes total sense because, thanks to setting up some parameters in advance, the system will allow you to monitor the situation (and react accordingly) even if your driver had already hit the road.
Imagine this scenario. Your vehicle is going from point A to destination C, through a middle-point – B. But in the “B” place, some part of the cargo is being unloaded. Hence, the free cargo space on your vehicle, on its way from B to C.
Why to waste it?
Think about it – you know the route of your vehicle before you send it. All you would need to do, is setting up parameters in the Hublock logistics platform, for system to search for free cargo on the route from B to C.
You could even establish a circle around the route, with a reasonable radius of a few kilometers – not to burn too much of gasoline and driver’s time. This way, even if there are some packages to collect from points B1 and B2, and your driver would have to deviate from the route, it would still be more practical than to continue the drive with a half-empty truck.
However, if you stayed with the old habits, without a logistics software, you would:
- Let drivers go around with an empty mileage,
- Miss the opportunities of uploaded information about cargo to collect in real time,
- Send another vehicle (or vehicles) to pick up freight that should be collected by the first driver.
- Waste your time, money, and resources.
2. Types of vehicles vs the size and the amount of cargo – Choose your cars right
The real-life supply chain problem comes back again and again. It comes down to the fact that the wrong cars are being sent to collect the wrong parcels.
To be more specific, if you sent a small vehicle and it turned out that the parcel is a … piano (OK, maybe “just” a piece of furniture), you would have to dispatch another (a bigger) car to take and deliver it.
The first car would have to return with zero parcels, but you would still have to pay for the gasoline and your driver’s time.
Or the other way around. A large truck would go to pick up some rather small pieces of cargo, leaving the majority of cargo space ridiculously empty.
How to optimize it for saving transportation costs?
Like before, if you want to protect your business from unnecessary time and money wasting, Hublock logistics software should be your weapon of choice.
This platform will enable you to create an automatic toolthat will analyze the amount and size of orders placed within a particular region. The system will automatically dispatch a proper-sized vehicle to pick up a relevant cargo.
This way, you will eliminate any possible conflicts between a customer and a driver:
Turn your imagination again. You do it the old way. Your dispatcher sends a too-small car because he doesn’t know what exactly is waiting to be taken away and delivered. When your driver shows up at the collection point, it turns out that he can’t load all the items on his vehicle.
A customer is angry, a driver is frustrated, and it’s hard to blame them. You have to send another truck to take care of the rest of the cargo, but again it violates your budget.
3. Removing the repetitive and manual work
Let’s face it – the majority of tasks handled by your employees is repetitive, time-consuming, and done by using:
Allowing your company’s team to work manually is very far from being cost-effective. Operational staff loses too much time on checking the status of shipments, or on typing in data that someone else has already provided. No transparent access to information results with no efficient communicationbetween the users.
Thankfully, the automation of the processes will help with getting all the logistics players on the same page.
Overloaded with tasks
Sadly, workers hired in T&L companies are buried with work. As those companies are short of operational staff and drivers, the remaining employees are being flooded with some extra tasks.
It comes as no surprise that too many things to do equal poor job performance:
Employees forget and make mistakes
And with hundreds of other responsibilities, you can’t blame them. They will keep forgettingabout tasks that are vital in terms of supply chain management. They will also keep on making mistakes, because they’re just humans, and with too many bits and pieces on their mind, it’s not going to change.
But those mistakes will affect the relationships between your employees, and between your company and your customers. Misunderstandings and conflicts are only a matter of time.
24/7 monitoring is expensive and vulnerable
It’s a widespread practice to do transportation at night. The vision of less traffic encourages logistics companies to send their vehicles when the rest of the world falls asleep.
Fair enough, BUT this night delivering has a significant disadvantage – the process goes beyond your control. A 24/7 monitoring ran by your operational staff could do the trick, but it’s expensive (and difficult to organize) to keep your employees up all night.
Let us do some logistics storytelling here:
At night, the van packed with parcels leaves the courier service warehouse in the North of the country. It’s a linehaul, so the driver is heading straight to the central sorting facility located in the capital city.
Early in the morning, the van should be unloaded, and the parcels will be sorted and loaded on other vehicles to be sent to their destinations. Over 40 recipients will be waiting to get their parcels during a day. Christmas Eve is around the corner, so the majority of the cargo is about Christmas presents.
A lot of expectations and responsibilities.
What happens then? In the middle of the night, the engine in the van goes down. The company has no logistics software or a communication system, and the operations employee comes to work in the morning. When he finally reaches the office, the situation is going hectic. This guy isn’t able to inform all the recipients of parcels that are still on the vehicle. And that van is… in the middle of nowhere, waiting for roadside assistance.
It’s going to be a long day filled with angry phone calls from central sorting headquarters and furious from customers who will be going out of their minds (#Christmas).
The nightmare is totally avoidable. If that company had a logistics management software, with a chance to configure automated actions, the system would allow the employee to react on time.
With Hublock logistics software, this staff member could, first of all, define the time their linehaul transport should reach the central sorting facility. If the van were late, then another automation would send e-mails, text, or voice messages to all the parties: senders, recipients, and the staff from the headquarters.
4. Real-time data access and data analytics
Transportation is not just about delivering parcels from A to B. T&L services generate a lot of information. To manage your logistics company like a pro, you need to get your hands on the data.
Collecting information on every stage of the transportation process is crucial, no matter how many players it involves along the way. Getting access to this kind of data is extremely important for every customer of a T&L company. Without analyzing the data, they wouldn’t be able to manage and optimize their processes.
So, your logistics company not only is under obligation to deliver goods on time; it also has to provide your customers with all the information about everything that is happening during transportation.
But most importantly, analyzing and managing your data will help you with more efficient use of your resources – cars, personnel, and inventory management. And when you use those resources the smart way – you willreduce the costs and time of your deliveries.
Easy access to data = fast time of reaction
When you get your data right in front of your eyes, you’re winning a chance to react in time.
Let’s face it – the bad news is better than no news at all. As we mentioned before, the logistics business deals with external risks like lousy weather, roadblocks, heavy traffic, or car breakdowns.
Whether you like it or not – all those unexpected events harm the time of delivery.
The good news is – those events can be taken care of. Properly handled crisis management is the key for every party – sender, logistics company, and a receiver, who is waiting for his parcel. If everyone gets the information as soon as something terrible happens, then it’s time to react in real-time.
The worst-case scenario? No information at all. Imagine a factory that regularly orders some components to keep the production going. If they don’t receive them on time, they will be facing costly delays. But if they get the message about the delay, they can minimize the losses by organizing some backup.
Digitalize the process. If you had a logistics software powered up with a tool for 24/7 monitoring, you would bring fantastic value to your business relationships.
This solution is something far more than an internal management system. It’s a data-sharing platformyour customers will have access to, as well. It means that they can monitor the situation themselves, which means their comfort and trust in your brand.
Within the Hublock platform, you and your customer will have an option to create customized automation processes, tailored for the needs of your customer It will allow him to make the right decisions at the right time.
5. Real-time data-sharing regardless of the IT system you use
The fundamental problem in the logistics industry is invalid communication and data-sharingbetween all the players operating in the supply chain.
Logistics strike as a vast network of various companies. And the supply chain? Well, the name tells it all – it’s an actual chain, where each link in the chain belongs to a separate company.
In practice, every T&L company has a range of subcontractors, whom they hire to complete the orders placed by customers.
The problem boils down to the fact that every company, every contractor, already works on a separate internal IT system. And there isno match between those systems! Simply put – the systems can’t “talk” with each other; they are not compatible.
In real life, dispatchers from each company have to send each other spreadsheet fileswith data each dispatcher has to enter into the system he works on manually. It takes a hell of a time, and it guarantees that not all of the data will be provided. So, we’re talking about an expensive massive piece of cheese full of holes. And – sorry to say that – it stinks.
Hublock will work as a gate, a socket to plug in any custom-made IT system logistics companies are working on. This data-sharing platform will enable different systems to communicate with each other.
In practice, if a company A will add or modify any data in the system A, Hublock will export and convert it into the data format used by a company B, and then – implement it into the system B.
This way, each party in the logistics ecosystem will have immediate, automatic access to current information.
- No more overloading your employees with manual and inefficient work;
- 24/7 access to up-to-date intel about the status of shipments and deliveries;
- Managing your vehicles in terms of orders placed in the system;
- Effective coordination of your employees’ work time;
- Inventory accuracy;
- Reducing logistics costs thanks to improved route-planning.
Are you ready to accelerate your logistics business?
OK, by now, you have discovered five areas you need to manage, to save time and cut off unnecessary costs in your logistics plan.
The bottom line is, every industry is digitalizing, and so is transportation & logistics. Automation of the processes and one logistics management software is the answer here.
Do you have some more ideas? Would you like the Hublock platform to include some more features? Let us know in the comments section or drop us a line here!