Five Myths about Transportation Management that’s Hurting your Business
By Gautam Kumar, Co-Founder & COO, FarEye
Gone are those days when managing transportation was perceived as an afterthought. And thanks to uncompromising customer expectations this arm of a supply chain and logistics is now as important as planning procurement, managing inventory, and optimizing warehousing.
But seamless management of transportation is easier said than done. To begin with let’s clear the cloud that has been obscuring some important facts about transportation for quite some time now. Common myths like transportation will continue to be a cost center, it does not directly impact customer retention, the sector will remain unorganized, transportation management system (TMS) solutions are more than enough to optimize operations and that it’s difficult to track delivery fleet in remote locations should be put to rest once and for all.
1.Transportation and logistics will always remain a cost center
Yes, only if you want it to be. By increasing visibility of delivery fleet, optimizing routes and capacity management, eliminating chances of theft, increasing driver productivity, guarantee ROI and ensuring accurate ETAs, modern cloud-based logistics platforms can significantly reduce the cost incurred on executing transportation activities and drastically boost profitability.
2. Transportation has little to do with customer retention
Not true. Unless your customer is absolutely devoid of any sense of urgency, it’s not a smart idea to strike off the equation that says ‘good transportation equals greater customer retention and loyalty.’
Imagine this. Your business supplies heavy equipment to telecom companies responsible for setting up towers in remote locations. You have sent out a giant truck to deliver antennas and fiber cables to a remote location some 600 miles from your manufacturing unit. According to plan, it should reach the destination within two days. The telecom company has already assigned a team of engineers that will reach the remote destination on the day the antennas and cables arrive. But surprise, surprise! Your delivery truck reaches the locations a day late.
A day late right? That’s just 24 hours. What could possibly matter? Except for the fact that the entire engineering team’s man-hours for a day were squandered. The next set of engineers who were supposed to take over the task from the initial team is now on its way only to wait for another day. So, as the hours keep adding up, the estimated time to make the tower up and running goes way beyond the budgeted time. And for your telecom customer, this ripple effect can result in losses adding up to millions of dollars.
So, if the average waiting time of a site engineer is 2-3 business days (say 24hrs), then the money value of the engineer’s time wasted will be €600 per site (24 hours*€25).
Question is, how long will the customer invest in your services if this keeps happening? Not a tough question to answer. Hence, investing in technologies that enhance logistics operations and ensures greater control over long haul deliveries is absolutely imperative.
3. The transportation industry will remain unorganized, nothing can be done
In fact, a lot can be done about it. It’s true that the transportation industry, especially in developing countries, is fragmented. The involvement of multiple stakeholders, belonging to very different economic and social backgrounds, does make the transportation industry a black box. But this problem can definitely be solved by leveraging advanced technologies.
Advanced supply chain and logistics platforms can create a transparent environment where consignors, 3PLs, truckers, and consignees can seamlessly collaborate and share live updates to ensure all stakeholders are abreast with what’s happening on the ground.
So, think of a situation where you, as a raw material supplier, no longer need to burn man-hours on receiving hundreds of calls every hour from customers asking where their shipments are and when it’s going to arrive. Pure bliss right?
4. Traditional Transport Management Systems is enough to optimize logistics processes
Your existing TMS has been very useful till now and we are extremely grateful for that. But what got you here will not get you there. Traditional TMS solutions have limitations when it comes to making your logistics proactive.
A mundane problem that your business might be facing is intimating your customers with appropriate ETAs or arrival time of your shipments. We will not be surprised to know if you frequently deal with situations where your customers are disappointed owing to your inability to deliver on time.
It’s something like ordering food for breakfast but receiving it at lunch. Obviously, you will eat it as you have paid for it, but still, you will feel cheated. Having said that, you would not have felt cheated if you were informed that delivery of your order will be delayed owing to heavy traffic congestion. Even better if you could have live tracked the person bringing your order.
Modern transportation platforms use control towers that let customers track their shipments on a single pane of glass in real-time and empower businesses to generate accurate ETAs.
5. It’s difficult to trace the whereabouts of my trucks when they travel through remote areas
Yes, it was, about ten years ago. The very prospect of losing sight of a truck that’s transporting thousands of dollars worth of goods is scary. But not anymore.
Advanced IoT-powered logistics solutions can empower businesses to track delivery fleet even in areas where there is poor connectivity by leveraging the advancements in GPS technology. But, there is more to this than just gaining visibility of the delivery fleet in remote locations.
Imagine your truck suddenly coming to a halt while crossing a location that has previously witnessed incidents of theft. But obviously, lack of handy information during planning the route had you oblivious about this fact. Now, when you can see the truck being idle for more than it should, all you can do is resort to prayers.
Modern logistics platforms not only help businesses gain greater visibility of the delivery fleet but also eliminates chances of theft and pilferage by analyzing historical data of routes. In technical terms, such platforms can ensure businesses predictive visibility.
While there are many such myths that surround the transportation industry, these are the ones that can really stall your business from making progress. We hope now you will have a different perspective while planning your transportation activities.