According to a 2023 report by Precedence Research, the global logistics market is worth $8.96 trillion, and is expected to grow to $21.91 trillion by 2033. While these numbers look impressive, and technology has a big role to play in this growth, a lot of enterprises are grappling with relentless logistics challenges.
Be it unpredictable delays, skyrocketing costs, or fast-evolving infrastructure, hurdles in the logistics industry are simply too many. Although there are many ways to overcome them, technology stands out. Yes, you read it right – technology can help logistics enterprises turn chaos into control, and inefficiency into precision.
In this blog, API Connects – trusted technology solutions provider for logistics-driven businesses – will discuss the 7 biggest challenges affecting the logistics industry and technologies that are helping businesses solve them.
Ready to learn about them? Let’s go!
Biggest Logistics Challenges And Technologies to Fix Them
Below, we have listed some known challenges faced by logistics businesses and digital tools that are assisting with growth leaps:
Higher fuel prices burn hole in profit
You skip filling your car’s tank, and the next day, prices have gone through the roof. Frustrating, right? Now, scale that frustration to a fleet of 100 trucks. The vital component for logistics operations named fuel generates unpredictable price changes that transform financial planning into unpredictable guesswork.
An unexpected rise in prices dismantles profit margins, so companies need to hold the expenses or pass the increase to customers who might switch to competitor services.
Technology solution:
The intelligence of AI extends beyond route prediction. Because it actually develops its knowledge base. Automated system algorithms can use real-time fuel prices data alongside traffic conditions and meteorological patterns to determine the most cost-effective transportation route for your drivers.
Your trucks will operate more efficiently when they avoid redundant stops and use regulated speeds as this enables fuel conservation. Some AI systems can even modify routes during delivery operations if environmental conditions change mid-way through. The result? More miles per gallon and fewer financial headaches.
Late deliveries turn customers grumpy
Waiting for an out-for-delivery package that’s out for delivery but somehow it takes a detour and mysteriously disappears into the other side of the planet? Boy we’ve all been there! Delays create both inconvenience and monetary problems.
Trucks stalled at inspections, airplanes miss links, warehouses backlog – all these events trigger dissatisfied clients and customers who then file charge-backs together and cancel contracts. Modern customers demand next-day delivery as standard. Being late means a death sentence for a logistics business’s reputation.
Technology solution:
To counter this logistics challenge, businesses can use real-time GPS tracking. It will serve clients like a fortune-telling device which lets them watch their shipments progress. thereby avoiding unnecessary worries through panic calls. Psst… Want us to reveal the real spell for your business? Predictive analytics.
Through its data processing capabilities, AI can predict delays ahead of time based on historical performance metrics, ambient weather conditions, and port operations. For example, if a storm is brewing, the system will fully control truck routes without human intervention.
No more excuses. Just proactive solutions! Learn more about our AI and automation solutions.
Warehouse problems lead to lost items
Imagine playing hide-and-seek but with a twist… You have to find 10,000 boxes, that too without any set rules. Every day, employees at logistics enterprises spend numerous hours looking for stock located among incorrect shelving and unidentified pallets. Sometimes, they end up in the BLACK HOLE of excess stock.
Workers conduct time-consuming manual checks which result in both incorrect shipments and out-of-stock situations. Thus, leading to chaotic late-time scrambling. But how to tackle this logistics challenge? Well, let’s discuss that.
Technology solution:
Your warehouse can host perfect mirror images of physical items through digital twins for each box, storage unit, and SKU. Cloud-based inventory systems operate like intelligent brains that will monitor all items for your business in the logistics industry through their complete delivery process – from arrival date to shipment date.
Yes, no more spreadsheets lost in email threads. Or clipboard checklists that mysteriously vanish after lunchtime. System updates can emerge smoothly from RFID tags combined with IoT solutions sensors while AI can detect deviations in processes that people have yet to identify.
Did a shipment get misplaced? The system maintains perfect understanding regarding its hiding location. Need to prioritize orders? Bought sales information goes into algorithms which adjust the inventory automatically. Your warehouse can use data management with the same efficient flow of products while eliminating guesswork through precise operations.
Recommended: 9 common DevOps and IT infrastructure problems and how to deal with them!
Paperwork purgatory slows everything down
One of the biggest challenges faced by the logistics industry. Paperwork is no less than a ping-pong game. Each shipment requires multiple layers of documentation including invoices and customs forms, and bills of lading and authorization requirements that need to pass through different departments and boundaries and organizations.
One missing signature or a typographical error and the whole process becomes derailed. Result, shipping containers remain at ports while drivers experience idle time. And do you know what’s the worst part? Many enterprises still use paper files and printing devices in their work routine. This just creates more excessive paperwork chaos.
Technology solution:
Blockchain is the ANSWER to this logistics challenge! It will function as a secure digital notary system that performs instant encryption and timestamping of shared documents for all parties. Given that records are going to be digital, this eliminates the need for mismanaged paper documents together with their associated problems like missing files, manipulated documents, and email receipt denials.
Payments through smart contracts will get approved automatically upon delivery. Meaning, days will turn into minutes for processing times.
Learn more about technology solutions for logistics industry
Last-mile delivery nightmare
How will you feel when your package is right around the corner but never arrives? Totally disappointed and highly annoyed, we bet. Drivers also face last-mile delivery hell. Trucking companies incur 53% of delivery expenses to battle traffic congestion, delivery connection failures, and customers who are absent from their addresses.
Dealing with urban traffic congestion proves the worst-case scenario because trucks spend their time performing futile block loops during their parking search operations. Customers, on the other hand, demand deliveries in a day, which requires a complex organizational effort to fulfil the request.
They remain ignorant about the logistical gymnastics required to make these movements happen.
Technology solution:
A lot of logistics companies have started using delivery drones to avoid traffic congestion since the COVID-19 pandemic. You can think of using them as well. Transport packages directly from warehouses to home backyards with extreme speed.
Customers can benefit from smart lockers that function as automated 24/7 points for getting their packages. They do not need to impersonate a red rover to fetch their deliveries. Some enterprises are even investing in autonomous sidewalk robots to deliver packages to moving individuals.
Although we know it’s going to cost your business a little $$$, you can still turn the most expensive delivery leg into the most dexterous.
Theft and cargo security headaches
Modern logistics operates with a daily practice of storing $2 million worth of electronic goods in dark outdoor storage facilities at night. Now, just imagine getting them stolen. Huge loss. Hardware jammers alongside fraudulent documentation have given power to thieves to redirect truckloads entirely because of their high-tech cargo theft activities.
For them, electronic goods and pharmaceuticals are particularly juicy targets. The worst part? Thefts often occur because insiders assist unauthorized parties in analyzing shipment data as if it were bank plans.
Technology solutions:
To tackle this logistics industry challenge, businesses can make use of small IoT sensors. Not only can these devices stream real-time location but they will also deliver location positions alongside temperature readouts and container opening alerts.
You should also use fingerprint scanning technology for truck locks as a system to authenticate freight release from trucks. No more stolen credentials opening doors. Certain businesses also employ blockchain-secured smart contracts which prevent any stolen items from reaching legal market valuations.
These digital security guards provide excellent protection. “Are they going to be completely foolproof?” – you ask? Not entirely. But they are still going to make thieves work much harder for their score.
Recommended: A complete Invoice processing automation guide!
Outdated technology stack
Our list of challenges faced by the logistics industry will be considered incomplete without discussing this point. Even today, many companies continue to operate through outdated technologies including fax machines and paper manifests. They even use Excel sheets that are exchanged manually like ancient texts.
These patchwork systems, on the surface, might look okay to some. In reality, they lead to numerous operational errors by generating duplicate records along with item loss and communication failures between devices that must interact without problems. When your tech is even older than your newest employees, you’re not just creating inefficiency problems but also risking complete obsolescence.
Technology solutions:
API Connects highly recommends using cloud migration and on-premise logistics platforms. They function as a single central commanding network. Syncing every step from order to delivery in real time. Just imagine using a platform that enables warehouse staff, vehicle operators, and even end customers to witness identical real-time information without needing telephone mad-dashes or technical system downtime explanations.
If used with emerging technology like IoT and AI, cloud solutions can provide your company with future-proof capabilities. These systems can adapt to your expanding business. Preventing you from returning to this point 10 years later.
Hire API Connects: Best Technology Solution Provider in NZ
There you go!
We told you about the biggest logistics challenges and tech solutions tackling them. But hey, let’s be real: dealing with these on your own can be overwhelming. Especially when you’re already dealing with daily operations and long-term strategy. API Connects can help.
We don’t just provide technology solutions to enterprises and SMEs. We become their partner in transformation. Automating paperwork with blockchain? Optimizing routines with AI? Securing cargo with IoT? Whatever your logistics situation, we’ve got your back!
So, are you ready to turn your logistics headaches into competitive advantages? Contact us today to initiate discussion. Remember, your supply chain shouldn’t hold you back. Instead, it should pull you forward!
