Logistics Problems and How to Overcome Them?

  • June 12, 2018
  • Blog

At present times, technology has greatly affected logistics. Dropping shipping rates means about half of logistics service providers generate a profit in ocean shipping as newcomers threaten them. This has led to unheard logistics problems.

Technology is no longer an obstacle to the automation of logistics. As a matter of fact, there are several deeply ingrained cultural aspects which can prove to be related to logistics problems.

Consensus versus Leadership

For real innovation, it is important to take a risk. However, in order to take the risk, you will need strong leadership. Research has shown that a group of strong decision makers is capable of preventing people from evaluating viable alternatives.

Averting Risks

The aversion of risk also plays a significant role in avoiding technological implementations. Companies are now using folding containers. However, no large shipping companies have adapted collapsible containers, till now. Risk can be taken only if you have the opportunity and the ability to execute. Poor execution can cost the company a significant amount of money. However, when implemented in the right manner, it can lead to an enormous growth of the logistics business instead of a logistics problem.

Decentralized Organizations

With the help of decentralized decision-making, the flexibility of the organization can be improved. However, the companies have to preserve an element of the centralized strategic process of the decision process. Nonetheless, there are several freight companies in different countries and regions that use individual freight management system. This might be effective on a departmental level but it will end up costing more in the long run and cause logistics problem.

Sunken Cost

Several big companies have invested substantially at a point during the major shift of IT. However, keeping these systems up-to-date might cost a lot of money. If you try to fix the patches it will cost you a lot of money.

How to Overcome Cultural Hurdles?

Logistics companies in India are not going to suffer much due to outdated technologies. Gradually, changes are being brought about to combat the inefficiencies and probable logistics problems. Here are some ways:

Joining Hand with Logistics Startups-

Logistics companies are adept at moving shipments around the world. Moving data, on the other hand, is something quite different. Even though a majority of the logistics provider depends on technology for enhancing their operation, they do not really have the in-house bandwidth or expertise to implement and focus on new solutions. Even if a company has a proper in-house IT, they will not have the skills to generate modern software.

Going to the Cloud

In between 2015 to 2016, the use of cloud-based software by companies have surged to a great extent. B2C user-interfaces have increased while less amount of time is being spent on installations. Thus, now, it has become easy to switch in between the providers. This lowers the transition cost and makes the sunken cost less of an obstacle for new platforms.

Trying to avoid risky decisions can be just as risky. Thus, it is important to embrace risky decision to accelerate the logistics start-ups.

20Cube Logistics is a technology-enabled logistics company and have a presence in 10 countries. With experienced logistics professionals, we provide superior logistics services.

With technological advancements catching up with the logistics complexities, openness to new processes, decision-making, and strong leadership will help in determining which shipping company is going to survive in the 21st century.