The biggest challenges in logistics

Successful logistics is fundamental for the national and international economy. Functioning supply chains have become more important, but also much more complex. Whereas producers and service providers used to get the materials they needed from close by, today they require materials that often have to travel a long way. Added to this are increasing demands from customers who want same-day deliveries, prevailing driver shortages and the ongoing shift to digitalization. Current and upcoming trends will change the logistics industry in the future.

In addition to current problems in logistics, the pandemic and energy crisis also have an extensive impact on the industry. Although logistics companies can hardly influence these challenges, they can prepare for them and ensure that they maintain and even increase their efficiency. For example, through appropriate technologies. We offer you an overview of the challenges, in which there are also opportunities for you.

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Table of Contents:

1. Internal challenges of the logistics industry

2. Current problems in logistics: External challenges

3. Exploiting opportunities with the right strategy

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Internal challenges of the logistics industry

The logistics industry has always faced challenges inherent to the industry. As logistics and especially warehouse management evolve towards digital markets, these challenges will continue to increase. We have compiled the most common logistics problems with possible solutions for you:

• Scarce storage space: Especially as logistics operations grow, storage space can become scarce. Additional storage space is often costly. However, it is advisable to use the existing storage space as efficiently as possible. Operations can especially take advantage of the height of the warehouse with high racks. Introducing compact storage systems or mobile racks also helps.

• Not optimally organizing the goods: If the goods are poorly organized, products have to be searched for longer and delivery dates may not be met. Even the storage should be thought through - a warehouse management system enables successful warehouse control.

• Obsolete goods: If there is obsolete stock in the Sites that is not properly recorded and planned with, this can lead to errors during storage. Here, too, a warehouse management system helps to keep an eye on the inventory.  

• Incorrect picking: Er rors in picking occur when, for example, several orders with different types of items are put together. A costly return is the result. Companies can use automation to prevent these picking errors.

• Incorrect handling of goods: Productivity suffers and goods become susceptible to damage when goods are handled incorrectly. Logistics companies should train employees in goods handling and provide appropriate handling equipment. Furthermore, loading units (pallets, containers) must be stable enough for the goods.

• Inefficient shipping: If the shipment of goods is not carefully planned, delays can occur. For a smooth process, goods should be consolidated in the best possible way, documents required for transport should be checked and loaded quickly and safely. Warehouse management systems provide assistance here as well.

• Incorrect KPI analyses: Using KPIs (Key Performance Indicators), the performance of all logistics processes can be clearly evaluated and improved. The data on warehousing, inboundHowever, the data on storage, inventory management, etc. must be read and interpreted correctly - ideally using suitable analysis modules.

• Lack of coordination with other departments: Poor communication between the Sites and the sales department, for example, can result in incorrect orders. Logistics software helps with coordination and agreement between the individual departments - ideally in real time. The more transparency, the better.

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Current problems in logistics: External challenges

External challenges such as the Corona pandemic or rising energy and fuel prices hit and are still hitting the logistics industry hard. The pandemic period in particular showed how important it is for logistics to be flexible. Today's logistics systems must be capable of rapid rethinking and new courses of action. The fact that a company's logistics can adapt quickly requires knowledge of the risks and challenges:

• Rising transport costs: Even before the corona pandemic, logistics companies had to contend with rising transport costs. This applies in particular to higher vehicle costs, but also to rising personnel costs. To achieve savings, you can use route planning systems that use data to optimize transport routes and reduce costs.

• Driver shortage: According to current data, about 60% of all logistics companies complain about vacancies. As a result, the transport of goods is limited, the demand for products and thus the price increase. The driver shortage therefore not only has a negative impact on companies, but on the entire economy. Tour planning systems can be the solution here as well. This allows you to use your existing Drivers as efficiently as possible. In addition, better organization and route distribution ensure less stress and overtime for employees.

• Higher energy and fuel prices: Increased spending on fuel and energy also affects product prices. This can upset customers and possibly lead to customer loss. Using a route planning system can ensure optimal use of fuel by identifying the best routes and favorable order distribution. This also reduces your_{CO2 emissions}.

• Sustainability in logistics: It is increasingly important to private and business customers that they also order where sustainable and climate-friendly thinking is applied. Legal requirements are being adapted accordingly. As a result, climate-friendly logistics companies are more likely to receive more orders in the future. Environmentally conscious route planning with route planning systems supports you in this. You should also take into account the vehicles and their fuel consumption.

• Government regulations: Rest periods, working time regulations and clear emission specifications are among the challenges that must be taken into account when planning tours. In exceptional situations such as a pandemic, restrictions are to be expected to which logistics companies must react quickly. Using suitable route planning systems, you can plan for these regulations.

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Exploiting opportunities with the right strategy

From internal challenges such as scarce warehouse space or inefficient shipping to external influences such as rising transport costs or driver shortages: the logistics industry is currently busy enough and will be in the coming years. Digital solutions can help your logistics operation operate as error-free and efficiently as possible. Real-time communication and the transparent handling of information play an important role here. The cloud-based solution TradeLink helps you to react quickly to adverse circumstances and reduces your costs in the long term.

With TradeLink, you always have an overview of all ongoing processes and can plan truck deployments for fast clearance. All deliveries can be coordinated with the software and tracked in real time. TradeLink summarizes all data centrally and clearly. Time-consuming e-mails, telephone calls and Excel spreadsheets, as well as expensive and error-prone paper processes, on the other hand, are a thing of the past. This means that you are well prepared for all the challenges of logistics and any changes in the logistics industry.