What Are the Risks of Poor Visibility in Freight?
- Higher freight spend. As shippers lose insights and the ability to track shipments through the supply chain, the risk of paying more for shipping increases. Moreover, higher freight spend will naturally lead to higher product price points, which will push customers toward a competitor or decide not to buy at all.
- Inefficient processes. Inefficiencies within the supply chain also stem from poor visibility. A lack of visibility leads to anecdotal or assumptive decision-making and decisions based on little, if any, real data. As a result, shippers and logistics service providers often don’t know where to even begin in identifying the inefficiencies.
- Failure to recognize delays for freight in transit. Another problem with poor freight visibility includes the inability to acknowledge delays in the movement of freight. Remember, customers expect to receive a product at a specific date that is communicated during purchase and according to the terms of their purchase. If a delay occurs, the consumer will expect a full refund for shipping costs up to and including a full refund for the purchase price.
- Higher inventory carrying costs. Problems within the global supply chain also contribute to higher inventory carrying costs. Since shippers do not know where their freight is located at any given time, they are more likely to over order products, resulting in a longer turnover rate and lessening overall profitability.
- Decreased customer service. As problems with freight visibility continue, customer service will decline. Any time a customer’s expectations aren’t met, their confidence in the supplier will also decline — leading them to consider competitors.
Customers Expect Unmatched Visibility
Best Practices to Guarantee Visibility in the Supply Chain
- Connect your supply chain with IoT-enabled sensors and devices.
- Use apps to track drivers and carriers.
- Tender shipments with a modern TMS that allows for integration with real-time visibility providers, such as how the MercuryGate TMS integrates with FourKites to provide more visibility into freight moves.
- Take advantage of automated report generators to understand performance.