Supply chain management has always been an arduous, process-heavy undertaking. But ongoing digital transformation offers the opportunity to improve your supply chain processes beyond simply management – to an organizational differentiator that achieves sustainability, traceability, and service levels. Unfortunately, current challenges in transportation will continue to affect logistics managers for the foreseeable future. These challenges are inherent within the global economy and the growth of e-commerce.
To stay competitive, supply chain leaders need to understand the evolving trends in transportation and the problems that can result. A few tips for overcoming those challenges follow as well.
What’s Causing Problems With Modern Transportation Management?
As predicted by Supply Chain Digital, significant issues emerged across supply chains throughout 2020. The logistics industry needs an infusion of technology and advanced management capabilities to attain critical milestones in this environment. Consider these top reasons problems are beginning to come to fruition within the supply chain:
- Globalization. The ongoing globalization of the supply chain is changing how local companies interact. Contractual terms must be laid out in the context of cultural similarities and differences, and everyone is looking for the latest way to improve supply chain visibility across multiple modes and lanes.
- Changing customer expectations. Customer expectations are still evolving. As major e-commerce retailers offer faster, less impactful shipping, customer demands for faster shipping and a reduced carbon footprint will grow.
- Market dynamics, including carrier markets for ocean shipping. Changing market dynamics reflect another problem with modern transportation management. Carriers possess leverage in the ocean shipping market. Capacity constraints and bullwhip demand create volatility in the balance of power between over-the-road shippers, carriers and final-mile providers. These trends will continue to force the industry to adapt.
- Multimodal shipping. Multimodal shipping adds to the complexity of carbon footprint, global e-commerce and shipping as more industries mirror retail by going omnichannel.
- The system alphabet soup increases complexity. Shippers are approaching a state of supply chain system whiplash, incapable of leveraging a unified platform of services due to the wide variety of systems in place.
- Omnichannel experience expectations. Adding final insult to injury, demands for omnichannel experiences from customers through business-to-business partners creates unfamiliar expectations and service requirements.
What Are The Challenges in Transportation Management?
The top transportation management challenges in the industry will revolve around these core dysfunctions:
- Poor optimization of processes and resources.
- Limited planning of activities from the first mile through the final mile.
- Low visibility of inventory, logistics, annual spending, and more.
- Cumbersome freight claims’ processes.
- Higher rates of returns on e-commerce and peak shipping season purchases.
- Globalization of the supply chain and the risk of non-transportation disruptors, like coronavirus and labor shortages.
How a Transportation Management Platform Solves These Challenges
- Self-optimizing systems will reduce strain, leveraging AI along the way, which will continue to make its foray into all modes.
- Increased data use will enable proactive management in the warehouse and beyond.
- More sensors will feed data into the TMS.
- Faster, smarter systems automate freight claims management.
- Predictive ordering and e-commerce platforms will ensure customers are happy with their orders.
- Diversified networks will reduce the effect of localized health- and labor-related disruptions.
Deploy Your Transportation Management Platform to Tackle Risks and Opportunities for Both Non-TMS and TMS Users
Comprehensive transportation management must optimize all supply chain processes through ever-increasing visibility, capability, and speed of execution.
Shippers and logistics service providers that understand the top transportation management challenges in the industry can do something to reduce their impact and costs.