Building a solid and successful shipping company relies heavily on behind-the-scenes freight and logistics planning. Keeping up with the latest trends and services related to supply chain management and shipping operations helps to set the tone for all plans and procedures. Keeping freight and logistics at the forefront of planning allows shippers, drivers, managers, and customers to all enjoy faster and more reliable shipping services, even amid market uncertainty. Solid insights and innovations into freight and logistics and niche freight management cannot be overstated.
In an early 2022 report from The Washington Examiner, the American Trucking Association noted that “the trucking industry hauled 72.5% of all freight transported in the United States in 2019, equating to 11.84 billion tons. The trucking industry was a $791.7 billion industry in that same year, representing 80.4% of the nation’s freight bill.” Without proper management and control over freight logistics, shippers will struggle to meet the ever-changing needs and demands of consumers and market demands. Freight and logistics services always have been and always will be closely linked with the transportation and movement of cargo along routes that make use of various modes of transport such as the ocean, air, rail, and road. Understanding the freight and logistics differences and how each plays into smooth and successful supply chain operations is critical to keeping growth and recovery ongoing in the industry.
Freight management for logistics and freight is the process of controlling cargo transportation. At a deeper level, it goes beyond the superficial management level and involves planning, executing, and managing cost-efficient procedures related to the delivery of goods. Freight and logistics management blends human resources, logistics experience, and information to guarantee smooth transitions and connections between shippers, carriers, and customers.
Regarding freight in logistics, management often oversees the obtainment, storage, and transportation of products, goods, raw materials, and resources. Logistics management is the more significant part of the overall service that includes the finer details of logistics and freight. But what is freight logistics? Answering that question leads to many other considerations that shipping management teams must address.
Making freight and logistics management more accessible requires a paradigm shift of sorts. To improve operational efficiency and manage costs, many companies have chosen to outsource their logistics and management services to third parties and service providers specializing in freight logistics. In addition to mounting pressures and pain points caused by COVID-19 shutdowns and market shifts, other factors have also shifted focus to the value of 3PL partners.These factors include:
Slow order delivery rates. Sometimes a company doesn’t have the means to manage the schedule properly and plan every delivery they need to make. They are better off letting a dedicated team handle the freight and logistics aspect of the business.
Problems with order accuracy. A lack of team members to train and commit to this aspect of freight and logistics management can put a company at a disadvantage from the start and make outsourcing the best possible option.
Poor inventory management. A lack of tools and technology can also mean shippers might be better off outsourcing some aspects of logistics and administration to third-party and out-of-office teams to free up staff for other freight logistic services.
Lack of adequate space for storage. Outsourcing is sometimes necessary from the perspective of space and the availability of tools and equipment needed to manage and keep up with the shipping inventory, fleets, and shipping specifics.
High and hidden shipping costs. Hiring a third party and outsourcing certain aspects of freight management is often more affordable than trying to nickel-and-dime existing freight and logistics budgets.
Manual processes and outdated technology. Sometimes, even in the short term, it can save shippers money to outsource to a provider with all the tools and technology needed to maintain high productivity levels.
Lack of expertise and poor collaboration. There may also be times when a shipper does not have the knowledge or ability to oversee logistics and freight management properly, so it is essential to outsource those services.
A prime example of how small details can lead to significant hassles and headaches for shippers is how quickly the route-planning logistics can get out of hand. From finding the best routes and ensuring they are open and accessible — a key component of freight management logistics — can quickly get to be more than the average shopper can handle in-house.
A recent survey from Trucking.org highlighted this issue. It found that “underfunded roads and bridges are choking the nation’s supply lines, making it costlier and more time-consuming to get goods to market. They’re costing motorists $1,600 annually in wasted gas, lost wages, and vehicle damage. The typical motorist wastes 42 hours of their lives every year sitting in traffic, and the trucking industry loses 1.2 billion hours of productivity to congestion.“
This is just one example of how outsourcing freight and logistics management can bring tremendous benefits. Expert brokers and carriers will carefully monitor, plan, and execute operations, making shippers’ lives easier.
While outsourcing shipping and logistical services can offer vital assistance for companies and team members, there is still a certain level of challenge associated with finding the right partnerships and network experts to collaborate with in real-time. The freight and logistics differences can be significant when managing high shipping volumes and an overall demanding flow within the supply chain network. According to TruckNews.com, “total truckload rates were up about 19% last year, but spot market rates surged 29% while contract rates lagged, up just 14%. Capacity is likely to remain tight as active truck utilization is still at about 98%.” With this level of focus and volume, the ability to properly manage freight and logistics through outsourcing can ensure shippers maintain the highest level of quality, excellence, and insight. The main challenges standard and commodity shipping companies must contend with during this search usually come down to overcoming the following:
Freight logistics are not static; what worked one month or even one week might not be the best option later. Disruptions occur without warning and need quick and reliable responses. Many shippers struggled to find third-party partners that offer customized solutions.
Another pain point for shippers looking for reliable partnerships and networks within the industry is a poor track record. It is essential to find a partner who specializes in freight and logistics and who can offer customized services that meet and exceed expectations.
Secure networks are essential for reliable services within the supply chain. The best industry partnerships are focused on optimization, automation, and improvement for short-term and long-term goals within freight management logistics.
All the data in the world and all the advice from industry leaders will mean little if shippers cannot apply it effectively. Successful freight and logistics management depends on the ability to use data and insights with the help of network partners.
Poor sustainability is the final issue shippers often encounter when choosing a logistics and freight 3PL or networking partner. Both from the environmental and financial aspects, sustainable plans are the ones best suited for continued growth and success.
A strong focus on supply chain freight and logistics is essential for continued recovery in the face of ongoing disruptions and market instability. According to current data trends, “it is projected that the revenue of general freight trucking, long-distance, truckload in the U.S. will amount to approximately 118,3 billion U.S. Dollars by 2024.” Shippers cannot afford to be caught without a plan.
The COVID-19 pandemic resulted in a significant increase in ocean freight and logistics costs which has started a domino effect of higher prices and fees across nearly all modes of transportation. According to the United States International Trade Commission, in the first half of 2020, shipping prices remained relatively unchanged due to a high number of cancellations as shippers prepared to scale back from anticipated shipping volumes to reduce pressures at the start of the shutdowns. By June 2020, however, shipping costs for logistics and freight began to increase due to recovering consumer demand for goods, container shortages, and other factors. And this is a trend that has continued steadily for the last two years as recovery continues and consumers and suppliers alike have adapted to the new normal. Shippers searching for a freight and logistics partner to help them build a supply chain competitive advantage should keep the following characteristics and points in mind:
Reputation – The chosen partnering company must have a strong reputation for quality time services and be a trusted leader in the freight logistics industry.
Quality – Shippers get what they pay for; it is crucial to invest wisely right from the start to ensure the finest service and support.
Experience – The more experience a third-party team has, the more likely they will handle issues and disruptions successfully and concisely.
Technology – Freight and logistics management comes down to making the most of available tools and technology provided by 3PL members.
Service – The range of services and customization available from third-party partners can impact the available options customers have to choose from.
Visibility – Proper management of freight in logistics depends on clear insight and reliable visibility throughout the entire supply chain network.
Intelligence – The final thing the best shipping and transportation partnerships have is the ability to collaborate intelligently and insightfully.
The shipping industry and supply chain network have changed forever, thanks to the events of the past two to three years. According to SupplyChainBrain, the demand for fast and reliable shipping along with logistics and freight insights has grown as recovery efforts continue across most industries and markets. They pointed out that with freight and logistics, “time-definite parcel delivery surged from $15 billion to $23 billion over 2019-2021, initially as a workaround to transportation gridlock, and over time to meet customer demand. That, in turn, has forced downstream changes to picking and put-away, cartonization, load and route optimization, scheduling and last-mile delivery, all of which figure into ETA.” The new semblance of normalcy has helped drive capacity demands and volume, leading to the need for more and more shippers to partner with industry experts and third parties to keep up with the logistics of freight management and improve the customer experience from start to finish.
Once a strong freight and logistics partnership has been established, it takes a certain degree of care and upkeep to ensure things remain operational. Domestic shipping services and International Transportation Management (ITM) operations continue to dominate the shipper’s attention today. This specialized logistics and shipping process consisting of air and ocean freight forwarding, customs brokerage, and complimentary value-added services has seen unprecedented revenue growth over the last couple of years.
Understanding the intricacies of logistics of freight management remains critical for modern market stability and growth. Logistics Management discussed freight and logistics trends in July 2022, noting that “overall, ITM realized an unheard-of 74.9% gross revenue gain in 2021, increasing to $122.4 billion, while underlying global ocean carrier container rates more than doubled from 2020, and air freight rates trended up peaking in December of 2021. While having a lower growth rate than overall gross revenue due to a tight carrier capacity market and high spot market rates, net revenue increased a healthy 44.6% to $35.6 billion.“ Establishing and then maintaining a solid partnership with freight and logistics companies requires the following steps:
Focus on win-win situations for shipping companies, carriers, and customers. Optimizing freight in logistics and other related services depends on ensuring all involved parties have their needs met and their goals considered.
Follow through on commitments and always attempt to go above and beyond. Within the shipping and transportation industry, reputation is everything, and carriers and shippers are made and broken by their track records.
Keep lines of communication open and ensure real-time data sharing is possible. Providing strong lines of feedback and information make freight logistics much simpler and easier to manage in any market and industry condition.
Collect, analyze, share, record, and apply data digitally and in real-time. The best partnerships share and support each other with streamlined communications and easily accessible resources.
Treat team members and vendors well to encourage long-term relationships. Mastering freight and logistic plans and operations get easier when everyone has a say and feels like they are valuable team members.
Focus on predictive planning opportunities to strengthen response times in times of need. Overcoming logistics and shipping challenges requires hindsight and foresight to plan accordingly and prepare when possible.
Maintain short and long-term goals for internal and external teams. While short-term issues and disruptions are critical, the long-term goal of partnerships and teamwork with freight in logistics also must be part of regular team collaborations.
Use technology, tools, automation, AI, and machine learning effectively. It is a digital day and age, so any shipping company, 3PL, or service provider that hopes to stay ahead of the competition must embrace technology and remain optimized.
Monitor interactions and experiences to keep services optimized for each shipment. A key benefit to effective freight and logistics partnerships is working on customizing services and meeting load-specific needs and concerns.
Conduct surveys and feedback reviews with team members, vendors, and 3PLs. Giving partners and team members the chance to offer feedback and insight can do wonders for boosting morale and improving performance.
Plan and coordinate for future growth and ongoing success in any market. Optimizing services related to the shipping logistics of freight management often comes down to ensuring everyone is focused on the same goal and mission.
Making the most of partnerships with freight and logistics companies comes down to balancing wants and needs and ensuring goals align, benefits get shared across the board, and everyone remains involved in critical processes as much as possible. The further growth and success of market recovery and industry growth depends on a strong and dedicated approach to freight and logistics now and in the years ahead.
Establishing and maintaining a reliable and successful shipping company largely depends on behind-the-scenes freight and logistics planning and strong industry relationships and partnerships. Keeping up with the latest trends, technology, and services through effective and mutually beneficial alliances gives shippers, carriers, brokers, and all industry leaders an advantage over competitors who try to go it alone. Building the proper logistics and freight management partnership is more straightforward when company leaders know what to look for and consider at every step.
Keeping freight in logistics front and center allows shippers, drivers, managers, and customers to all enjoy faster and more reliable shipping services. No matter the state of the market or what current and future trends might look like, the importance of solid freight and logistics cannot be overstated. Freight management for logistics and freight services providers is critical to ongoing recovery, growth and success- both in the short term and long term.
The slow yet steady recovery effort and the return to some semblance of normalcy have helped drive capacity demands and volume needs, as seen in the supply chain today. Shippers that can tap into the latest tools and technologies and coordinate with industry leaders find tremendous success with the intricate logistics of freight management. Zengistics is one of the few brokerages with backing of billion-dollar asset company plus a world-class collaborative tech suite. Freight and logistics management blends resources, experience, and information to guarantee smooth transitions and connections between industry leaders. Contact Zengistics for a custom quote today.