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HomeMiscellaneousWhat are the Major Problems in Logistics?

What are the Major Problems in Logistics?

Logistics and transport industry has been the backbone of any economy. It is the driving force behind all the departments, such as manufacturing, services and agriculture etc. However, like all other industries, it has been facing some significant challenges. These challenges are driven by changing customer expectations and demands, tech innovations and stringent regulations etc.

Though many experts suggest that the global outlook for the industry is quite optimistics, and it is estimated at about 4 trillion US dollars, it is expected to grow to around 6.3 trillion US dollars, the road ahead is still quite challenging, specifically for medium and small sized enterprises.

As per third party logistics, reducing transportation costs has been a top factor as far as the major problems in logistics are concerned. A few other obvious factors are included in the list as well. However, the most significant challenge at times is the requirement for better technology and innovations while not extending the budget. Anyway, here is the article by Prestige Logistics Group that includes a few major problems facing the logistics industry!

Fuel Costs

One of the greatest costs contributing to the reduced transportation cost is the enhanced fuel prices. Greater fuel prices are likely to enhance the transportation costs for the shippers the following year by pushing up fuel surcharges. Enhancing diesel prices can escalate surcharges added to freight rates, which is reversing a trend of two years that cut into the earnings and revenue of truckers since fuel costs plummeted.

Business Process

Regardless of the need for the new technology, which we define as one of the most important points, it has become an enhancing challenge for the logistics industry to stay on top of new advances in the process of business. Taking advantage of the new chances may seem quite enticing but onboarding and adoption can be overwhelming.

Customer Service

Customers require great transparency into their product delivery at all times. In the modern world, the location of a package can be interconnected as your social network. With the great increase in customer expectations, their willingness to pay for quick shipping has lessened with just 64% of the customers unwilling to pay anything additional for less than a couple of days’ shipping.

Economy

With greater fuel rates comes an enhanced credit crisis and increasing inflationary demands that take a higher toll on the economy. Logistics industry is then pressured by enhancing compliance regulations, reducing demand, additional capacity with some additional enhancement in key cost centers.

Driver Shortage & Retention

Retention and hiring remain a significant problem despite the lower demand, as mentioned above. With government regulations, carriers tend to face significant compliance regulations by the federal government as well as local authorities.

Environmental Issues

Regulations about Anti-idling and other emissions brought out by the governments have brought concerns that the compliance costs may exceed benefits.

Technology Strategy & Implementation

While the industry supports and understands many of the technology benefits, a few questions may remain as to how they would pay for it and who would help implement improvements.

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